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HOA Lien Foreclosure

Kim - good question. The purchaser at the Sheriff's Sale of the HOA lien will take the property subject to the liens that are superior (ahead of) the HOA lien. This means the purchaser will have to pay the superior mortgage (if there is one) or else the mortgage lender will foreclose on its lien and blow this guy out! It is essentially the same as a second mortgage lien holder foreclosing - they can get title to the property but it will be subject to the lien of the first mortgage.

I would not have expected HOA foreclosures to be this common. However, I review the foreclosure filings in Palm Beach County every day and am amazed how many associations are taking their liens through foreclosure.

Posted by Marlyn Wiener on 04/16/2008 11:24 PM

Comments (6)

hoa liens, condo assessment liens, short sale, foreclosure

6 Comments on HOA Lien Foreclosure

APR

2008

I just had a property listed in pre-foreclosure last month and we lost it to the HOA on Possession only I believe. They have the right to take possession of the property and evict the homeowner for not paying their homeowner association fees. I think they they hired a realtor to sell it and I'm guessing they will make some sort of referral fee on the commission. This is all just theory at this point - but the homeowner only owed about $500.00 so I can't imagine what the motivation would be in this case.

Hi Marlyn,

They're very rare here in CA. They happen, yet rarely.

APR

2008

Once the Writ of Possession has been issued, the Sheriff will execute it - giving the former owner 24 hours notice to vacate the property. If the individual does not vacate - the Sheriff will physically evict and move all contents left in the property by the prior owner out of the property - the personal property can simply be left at the curb.

There is probably no one explanation for why HOAs are taking these drastic actions. Certainly, if there is anough equity to ultimately get the delinquent assessment paid - that would be motivation. Also-- the HOA laws in Florida require the HOA to initiate action to foreclose under the lien within one year after filing of the lien - at some point the clock is running out and they have to go forward with the foreclosure or start the whole process over again.

Thanks Marlyn for the answer. I haven't heard of this happening in NY but I'm sure it's possible. Something to discuss with my fellow agents here.

NOV

if an hoa lien been placed on a condo, can owners still redeem? is it possible to negotiate?

I hear ya. HOA and COA liens are a huge problem, and sometimes they are not even liens, because they never file. If you don't pay them, you have to deal with a bunch of angry nut cases. :)

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