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Did you know that unpaid HOA dues can survive a foreclosure?
That's right, the foreclosure does not necessarily wipe out a lien for unpaid HOA dues. I didn't know that, and apparently, neither did Bank of America.
Here's the story. I represent a buyer for a house in Melody Ranch, Jackson Hole, WY. The seller is  Bank of America, who acquired the house via foreclosure a few months ago. The previous homeowner quit paying their homeowner's association (HOA) dues months before the foreclosure, and the HOA placed a lien on the property for the unpaid dues. After the lien was filed, the bank foreclosed.
My buyer put the property under contract, and the title company prepared the closing statement. The title commitment showed the HOA lien as an encumbrance, and the closing statement showed that the seller would have to pay the amount of the lien, just under $1000. Bank of America (Seller) protested the charge, saying that their foreclosure should have wiped out the HOA lien, since the Bank of America mortgage was a first lien, and predated the HOA lien. Seemed reasonable to me.
BUT, buried in the Covenants, Conditions, and Restrictions (CCRs) for Melody Ranch was a paragraph that asserts that any lien placed by the HOA will be ... more

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