When home is foreclosed
in Florida, homeowners’ association (HOAs) liens can be passed on to the home’s new owner. If you buy a condominium or single family home at auction that is included in a mandatory HOA and has been foreclosed on, check to make sure the HOA dues are current. Depending on your state, associations have the right to file a lien on the property for unpaid assessments. Unpaid maintenance fees and HOA dues will continue to increase as the unit or home goes through the foreclosure process. Most associations will try to recover the money (up to 1 year’s worth) from the bank if the lender takes possession of the property, and it does not sell at auction.
HOA liens frequently survive foreclosure
and are passed on to the new owner to pay current when the property is bought at auction. The association will not allow the bank to transfer ownership or title to the new owner unless the account is paid. A negotiation in lowering the dues may be done by the bank beforehand in the event that the property fails to appeal to buyers or can be negotiated into the sales price depending on the bank and association.
In most cases, the HOA takes a loss in their fees and end up collecting an additional deposit from new buyers in order to safeguard the possibility of another foreclosure
and to make up for lost income.
Stephen K. Hachey, a Florida real estate attorney, can help you navigate this and many other legal matters. To receive a free consultation, contact our offices at 813-549-0096.
This post was written by Stephen Hachey. Follow Stephen on Google