Condo Association Management Blog

Stop paying the lawyer! You are out the money.

Sue in small claims court or district court. Then when the condo board gets a judgement, there is the possibility of seizing paychecks, bank accounts or seizing assets (cars etc,). Hiring a collection agency.

First of all I'm not a lawyer, but I have been on our Board for a number of years. 
 
From what I can tell from your blog, the owner was in arrears for a year prior to going into foreclosure 2 1/2 years ago. Why didn't you do anything that first year to start a process of recouping delinquent condo fees? 
 
This is a pure case of "hind sight is 20/20" on the part of your management team.  
 
I am curious as to why you waited 3 years to process this mess and hire a lawyer.  
 
We've had a similar occurance where the builder supposedly told the owner she would never have to pay condo fees, and she didn't. We took her to court and recouped all back fees because we were there before the other creditors became involved. 
 
The main thing we did and you have NOT done is to pay a good and honest attorney a yearly retainer for just such scenarios which is my advice for now and going forward.  
 
Sounds to me like someone wasn't taking care of what they were hired or elected to do. Foreclosure, by the way, is a red flag to the future of a sound condo association and it's owners. If you have FHA approval on your condo this may affect your status.  
 

Sueing is only viable if there is a likelyhood of getting a judgement. Some people are judgement proof. These might be the pennieless, persons on social security or disability, in bankrupsy or those good at hiding their assets. Even if you got a judgement, you might be so far in line with the other creditors you will not collect any money. So you have to make a determination if a judgement is likely to produce.

On Linda Dann's disparaging remarks about someone not doing what they were elected to do: It is a four unit condo lady. Those small condos cannot hire anybody and you have to rely on the efforts of uneducated, and probably unwilling volunteers. The Condo scenario and laws are not effective. In many states there is no way to get board members to do anything except to sue them in court which is extremely cumbersome, slow and often ineffective.

Getting a good collectionlawyer involved quickly is standard procedure, but as someone else stated some owners are pretty much judgement/collection proof. If they haven;t qualified income or assets to legally garnish..ther's not much you anyone can do except place liens on the unit in hopes of collection down the road. Unfortunately lender foreclosure effectively extinquishes you ability to collect. I am the Board VP of a small 40 unit MD condo with $105K accumulated delinquencies. Our atty is pretty much stuck since 5+ owners haven't paid fees in years and they haven't any qualified income or assets to garnish. Property Values are down 40-50% from the crazy RE mkt of 5 years ago. Most every owner is upside down on the mortgage balance. We are foreclosing on 1 owner's liens who hasn't any mortgage..LUCKY !! All other owners owe more than we could auction their proeprty for via foreclosure. We have hired a new Foreclosure attorney who says we have other options to force their lenders to help. Will advise later this year if we succeed with new strategies. By the way our HOA cannot cut off the water, HW, parking, etc that out HOA fees pay for...MD law prohibits. Your state may allow it if your HOA bylaws allow it as a remedy.

Florida takes forever to do association foreclosures as they are entirely judicial. This is do to bought and paid for state legislators which are owned by the lenders, builder and other special interest groups with money. We have been known for years as "The Debtors Paradise of the US" and you can also believe freeloaders and squatters are our specialty.

We have been lucky, only one of 70 units has caused a big problem. Another was a problem for a while, owned us $35,000 in HOA fees, late penalties, and assessments. The bank that took it over finally paid it all, thanks to diligence by one particular board member. The HOA foreclosed and got a judgement in court for $27,000. We could have rented it to help recoup but it needed too much work so we turned it over to a collections agency. The owner is stuck. He's had a lot of offers but when they learn they owe $27,000 on top of the $82,500 asking price, they run the other way. We have good attorneys specializing in condo law.

Check website 
 
www.firstsourcefund.com

I have read all of these posts and I'm sure they are well meaning. The truth is, a small association with 12 units or less cannot afford to pay $ 300.00 per hour for an attorney. I live in Nevada and live in a 12 unit complex. All of the laws including ours are sorely lacking when it comes to judgements and people taking advantage of the legal system. The fact is, unless you have the money to hire an over priced attorney you are out of luck under current laws. Yes, you can sue in small claims court, but someone on the board is going to have to file the small claims paper work, which is no small task, and then go to court. If you prevail in court, you are then going to have to collect on the judgement which is a monumental task to say the least. I wish you luck, but under current laws, I think you would be better off letting the money go unless you are willing to pay an over priced lawyer who will milk you for every penny he can to resolve this matter. I have just one question for you. Why would you hire a lawyer by the hour to settle a dispute, when that lawyer gets paid to argue by the hour. Good luck, but I think you would be better served fireing your lawyer and letting your money go. Otherwise, pay the lawyer and say good bye to your money anyway.

I understand and sympathize with your situation. I live in an 8 unit building in Chicago, with 2 nonpaying units, and 1 foreclosure in progress. We have an HOA President who refuses to invoice the units (who havent paid for about a year) or take legal action. I was about to hire an attorney for myself because why the heck should I pay when nearly 50% of the building doesn't. I spoke with 2 attys who were honest enough to admit that as an owner, there wasn't anything I could do. As a building, we can't afford an attorney anyways because we're scraping our money to pay the bills! Your situation sounds like one where you should take the hit. But in the future, you will know to immediately invoice the unit and be prepared to lien after 2-3 months. Good luck with everything

www.firstsourcefund is the website of a Florida company that specializes in assisting Condo Associations eliminating their delinquencies. No more legal fees, cash up front to be sued for any purpose with no recourse to Association.