When a short sale goes to foreclosure and there is an HOA involved...
I read this post from Liz and it is a very imformative blog about short sales, foreclosure and HOA. The saga continues...with banks, homeowners and associations
When a short sale goes to foreclosure and there is an HOA involved, I recommend to my clients that they go ahead and send a copy of the transfer of deed to the HOA to show that they are no longer the legal owners. Very often what I am finding is that the auction may occur on one day, but then the transfer of deed not happen for a few weeks.
Unfortunately, the HOA may assess past due assessments and fines on the former homeowner based on when this new deed is recorded. So I inform the HOA of when the auction occurred and then I provide my clients with a copy of new deed to forward to the HOA. Then, I request that my clients call the HOA and make sure that they are clear on any balances. If the HOA is insisting that they pay dues and or FINES for that extra time after the property was auctioned, then the homeowner might find that an appeal with the board is worth their time. If an HOA board is genuine and sees that the homeowners intent wasn't just to leave them high and dry with an overgrown weed property, the board in many cases will be understanding. Otherwise, late charges and interest will acrue and these fees unfortunately follow the homeowner and/or go to collections.
It is said enough to a) have the short sale rejected b) lose the home but then to have issues with an HOA where you no longer reside is just more headache than its worth!
Liz Harris, MBA, SFR, CSSN, CDPE
Associate Broker
Clients First Realty, LLC
480-313-3924: Mobile
480-722-7658: Fax
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