I'm treasurer of a 30 unit condo. I don't understand how it has gone this far, i.e., how was the roperty sold without BoT approval.
You state that "he is foreclosing on his condo." Did you mean to say that his LENDER is foreclosing on his condo? Assuming that is what you meant and that the lender did their paperwork correctly when they closed on his mortgage, their lien would take priority over that of the HOA's. Do you know what his unit is worth? Hopefully for your HOA, the value of the unit exceeds the payoff amount of the mortgage by a large enough amount that would enable the HOA to collect past due fees. If not, your lien can be used to file a claim against his other assets. It would be difficult and time consuming to collect, but you can make his life miserable, i.e., damaged credit score, inability to borrow from other lenders, etc.
This guy sounds like a corker. Go after him. He's a wiseguy.
We have a similar situtation right now.
Since Oct of last year the former treasurer claimed bankrupcy and the bank GMAC is forclosing on her home. We are not allowed to send any letters to her about the money she owes. We do however have a lien on her condo unit of which sits empty. She pwes over a years worth of fees and assessment.
I want to know the same thing.
We were told that the Bank gets their share first and then we get ours, but the bank only has to pay half of what is owed to us.
I have been searching for the same answer. I am the new treasurer and we have a new board under management service. Management is working to get this resolved. Now GMAC is having their own problems and we are still left up in the air. We heard she gave the home back to GMAC so they are taking their good old time.
If this guy bought another home and car, he more than likley put it in someone elses name....pretty steaky.
As for the sale of the unit, and getting past the BOD with getting a certificate of resale, I believe he dosent need any if the Bank has the home.
Please post, I am interested also in this for ourselves.
Contact an attorney who specializes in Condo Law in your State. That person will tell you the straight scoop. Do not rely on anyone but a professional for the correct information. As an association president and past treasurer I have gone through this same thing several times and each is a little different because the circumstances change and a different law or rule is brought into play. If you don't do it right the first time your assoc. will loose and you don't get a second chance in these matters.
Ask your management service representative to help. That is their job. They have an attorney specializing in condo law on retainers that is available to your HOA. Your are already paying for a lawyer if you have contracted with a property management company.
I disagree with Kay Borden. Our Association has gone through about 5 or 6 management companies and only one was honest and knew what it was doing. It's fine to delegate tasks to management companies as employees of the Association, but important to consider that few are competent, despite their so called certifications. When the stakes are high it is best to get a legal opinion from someone with condo law experience and it will not cost all that much - less than an hour of the attorney's time.
GR is correct. The association should have an attorney of its own. It would be very unusual for a mgmt co to have an attorney available; however all mgmt cos should be able to recommend the appropriate att for this issue. In most locations, a management contract does not provide for legal representation. This is also true for CPA services.
The complications indicated in this specific case require legal counsel. There are both bankruptcy and foreclosure laws involved. If the lien had then been moved to a judgement, that would allow for continued pursuit of the non-paying owner.
In Maryland there is expected to be an Att General opinion that ANY mgmt co preparing a lien for an association is practicing law without a license. This may apply in most states.
What no one has mentioned here is the importance of documenting exactly what the delinquent owner owes. Your CC&Rs probably permit the charging of late fees and interest for non-payment. You should be tracking this activity so you can easily and quickly submit a proof of claim to the courts, the lender, the title company if the property is about to change hands, etc.
Re: management companies; Amen, Lynn!
If the debt was dismissed in the bankruptcy, then there is no debt. Some associations have some minor income that they file taxes on and the loss can be deducted just as they are by any business who have debtors file bankruptcy against them. By law, the association would have gotten legal notice that the debt was included in his bankruptcy filing and you are given the opportunity to appear in bankruptcy court to dispute the debt being included.
If the debt was not included in the bankruptcy, it is still valid. Yes, the lender's foreclosure is always first in line and most HOA liens are extinguished in the foreclosure process. BUT, that does not mean that the debt goes away and it is still owed to you and collectible (as long as it was not discharged in the bankruptcy). I see many folks on this site immediately jump to the lawyer solution. And in many cases, a good property lawyer is definitely the way to go. But not in this case. Time after time, associations end up paying a lawyer more than $2,000 to collect a $1,000 debt! Or pay those legal fees and not collect a dime. This is not a situation where interpretation of the law is required. He was the owner of the property when the HOA debt was accrued and owes every dime of dues and associated late charges and/or collection fees that were accrued until the lender foreclosed. Almost all county assessor offices are on-line and a simple electronic property title search will show who owned the property when. Take that and a copy of the HOA statements and go file against him in small claims court. In California, It costs $50 to file and we also collect that in the judgement! This is what has been working beautifully in California:
"Your Honor, our association is desperately trying to keep from raising our dues on our entire membership because this would then put many more of our association members in financial trouble and cause even further foreclosures in our association. The rest of us have faithfully and responsibly paid our dues, but a few have chosen to run up this debt and walk away and leave us, the innocent bystanders, to pay their debt. We are not unreasonable and understand that folks have financial trouble and we are open to taking low monthly payments. This would allow him to pay down this debt while not hurting the other members of our association. We ask the court's assistance in reviewing his income and debt obligations to determine what would be an appropriate monthly payment amount. Can you help us?"
It's been working!! Ok, maybe you'll only collect $100 a month, but the debt gets paid without it costing anything other than one of your board members showing up at court. And the judges always stipulate that if they stop making payments, then the entire debt becomes due immediately with interest and you can then easily go back and file the document to attach his wages. The California small claims court system is extremely straightforward and easy to navigate.
For complicated issues, seek the advice of a good attorney! But this is not complicated. Here's the records search showing they owned the property and here is the HOA docs showing the amount owed. This is what small claims courts are there for and it has been working well for collecting these HOA debts in our area (San Diego).
Know your bylaws, elect a solid board and be involved! And remember that your property manager works for you, not the other way around! Good luck! :)
We have a board meeting next week and this was exactly what I was going to present at the meeting about another unit owner besides the one I mentioned. Yes 2 deadbeats in our assoc..
We did lien both and also won the judgements. However unlike the Bankrupcy owner the other was paying and then also in Oct along with her what I call so called friend (they both stick together), she stopped paying us anything at all.
Now we cannot do to much on the bankrupt owner, but I was positive we can small claims the other one. I will present this to our lawyer and see what happens. Thanks again.
We have had issues here in Wayne Co. Michigan, with our site condo Assoc. We have around 20 out of 94 that do not pay their dues. We send out letters trying to get them to call us to set up a payment plan. Most do not do it. We have taken them to court and they have been ordered to pay their dues. Some do, most do not. Our next step is to repo something of value. Then we either sell it for the payment or they cough up the money ahead of time. BUT, others take everything out of their name. Nothing to take. NEXT, garnishment their wages...but we need SS number or driver license number. BUT, the court will NOT force them to give it to us!!! STUCK. As said above, we could hire someone to get the info but then we really aren't going to get that money back and may wind up in the hole. We don't know where to turn!
All day long I've been reading the well meaning replys to the original question about collecting after a property is sold.
People, this is a simple problem to solve if you remember that AS A BOARD MEMBER, YOU WERE CHARGED TO DO THE BUSINESS OF THE ASSOCIATIOn. First don't let your members get more than 30 days behind without a noitce of intent to lien. Second, follow through and lien the property. Third if you don't get paid in the time stated (45-60 DAYS) file a jusicial forclosure.
Most states allow for this process. You can throw the bum out on the street and rent the unit yourself or if it's rented take the rent in front of the mortgage holder and the bank will applaud you for taking control and protecting the bank's interest.
rEMEMBER THAT EVER CENT SPENT IN COLLECTING IS TO BE CHARGED TO THE OWNERS BILL, NOT THE ASSOCIATION.
WE HAVE HAD $500 LATE FEES GOT TO $2,000 WITH LIEN FEES, ATTORNEY FEES, COURT FEES AND EVERYTHING ELSE FEES.
This is why I said go get an attorney who specializes in Condo Law in your state and DO THE BUSINESS YOU WERE CHARGED TO DO. STOP PUSSY-FOOTING AROUND AND DO YOUR JOB OR RESIGN FROM THE BOARD IN FAVOR OF SOMEONE WITH BALLS TO DO THE JOB. GR
As other have said you need an attorney and look at your state condo and bankruptcy laws. Ask your attorney for a copy of the bankruptcy filing because you first need to know what chapter bankruptcy he filed to make sure they included the association in the bankruptcy. He is responsible for all fees and legal fees from the date of the filing until the property is sold. The mortgage company may still foreclose and unless you are in 1st lien position (most cases you are not)you will probably see nothing toward the fees because the county taxes will always be paid, then the mortgage and then the association if you are lucky. You can not contact the owner until the bankruptcy is either dismissed or discharged because in most cases there is a stay against any legal action and they are protected(what a joke!)because of the bankruptcy and you will need permission from the court to proceed once the bankruptcy is done. Good news, you know where they work- I would ask your attorney to seek a judgement and garnish wages. Make sure your lien is still in place and your accounting is correct first: Make 2 seperate payments ledgers-one pre petition (before the bankruptcy filing), and one post petition (after the filing date). If they filed bankruptcy in the middle of the month prorate the fees for the remaining days in the month. You can not collect on fees before the filing. Have them also check to see if they own other property, we do a debtors exam and haul them into court (they are required to attend and if they don't you can file contempt charges to get their attention) to see what their assets are. You may be able to file a lien on the other property they own- check your county property records and do some research. Hopefully if it sells back to the mortgage company or another buyer you will be rid of the dead beat! Tell you other BOD to either do their job or get someone else who chan, it's not fair to dump everything on you! Let us know how it turns out.
I live in a small,9-unit, self-managed association in MA.
One of our unit owners died in November of 2010.
We hired a lawyer who put a lien against Chase mortgage.
He told us that the 1st 6 months of past due condo fees could not be collected, but everything going forward could be.
I then spoke to a real estate agent who specializes in selling foreclosed properties.
He told me that a condo association would be the LAST ones to be paid when the condo finally sells.
We'll just have to wait & see.
It took 16 months from the time of her passing for her property to go into foreclosure.
Her family walked away & she left no will.
It's going to be a long wait. Maybe 2-3 years.
Thankfully, we have all major work done...new roofs, painting, etc. and have no pending large projects.
We can still operate fine without her condo fees.
We're still holding out hope that once the unit is sold, we'll still collect the delinquent fees!
What GR said.
You need an attorney who specializes in condominium law to guide you through this.
I am a property manager with a law degree (non-practicing attorney) - and we have a Federal judge on our Board - and we still had to hire an attorney to guide us through a number of COA-related legal issues.
Call an attorney. Soon.
First a foreclosed unit can take 18 months to 24. Then it depends on who buys the note, or if the bank takes it back.. What it sells for, what the bank cost, lawyer fees, if you name is next on the lean of foreclosure, you can clam your amount. Been through it twice and going through another one, have a bank setting on one for 2 years. In Iowa you can not make a bank pay the dues.. Fun Time.....