Condo Association Management Blog

It's hard to say what might be the best course of action. I work in WA State and our laws allow for lien filing and the association can foreclose the property themselves in 90 days of non payment. If I were coaching you I'd say - read your documents, ask your attorney and move forward quickly.

Basically, that is the best direction. I would urge you to move quickly. 
 
If this owner isn't paying their mortgage and is going to be foreclosed on, no matter how "unfair" it is they aren't paying assessments, that is the reality. 
 
The best plan may be to plan on not recovering those fees.

During the foreclosure lien/foreclosure process often the other unit owners already carrying the cost will have to pay high legal fees without possibly getting them back.  
 
Foreclosing on units is a very long process and costly. 
 
One the lien is filed the Association can move for foreclosure. Once summary judgement for foreclosure has been granted, a sale date is scheduled. So either the bank or another individual purchasing will end up with the property. In the current economy we are seeing a lot of units that go up for sale several times and no one bids. If the banks do own them they are refusing to pay. Oh, if the bank does take possession of the property due to foreclosure, the Association only gets the last 6 months of what is owed or 1% whichever is less. Normally that doesn't even cover the cost of collection and attorneys fees. 
 
If the unit is being foreclosed on by the bank, for a cash strapped association, it would probably make more sense just to wait for the unit to be foreclosed on and attempt to get fees going forward from the bank at that time and to write off anything before that time.

My comment involves Florida Laws and condominiums. However, often states have very similar laws to Florida, so you will definitely have to see what your applicable state laws dictate.

If hoa has a risk reserve account for you due to past experiences, can you request they use those funds for payment?

If hoa has a risk reserve account for you due to past experiences, can you request they use those funds for payment? State of North Carolina.

We are a 5 unit condo/townhouse association. One unit is in foreclosure and the lender was granted an "order of taking" in September 2010. No fees have been collected on this unit since January 2010 when the owner moved out. We feel the lender is dragging its feet and wonder what we can do about it. What can we do as an individual association? And, have any other associations considered investigating the possibility of a class action on behalf of associations everywhere that are being financially bankrupted by lenders who do not move on these distressed properties?