Foreclosure in Florida>Question Details

Al Bieler, Home Buyer in Fort Lauderdale, FL

HOA foreclosure followed by Bank foreclosure?

Asked by Al Bieler, Fort Lauderdale, FL Wed Jan 25, 2012

I have a very interesting situation that I've been curious about, regarding Foreclosure by a HOA and then by the Mortage Bank.

(This is in Tampa, Florida.)

Timeline:
1. In 2003, Person A purchases property and gets mortgage from Bank A.
2. In 2010, HOA forecloses on Person A, and becomes owner of property (subject to mortgage from Bank A).
3. In 2011, Bank A forecloses on Person A (also lists HOA as defendant), and Person B bids and purchases the property.

1. Will Person B have a clear title to the property?
2. Is Person B responsible for any HOA assessments Person A was supposed to make?

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Answers

3
Here's an interesting website about HOA/Condo Laws and the perils of buying into an HOA or Condo Assn:

http://www.ccfj.net
0 votes Thank Flag Link Thu Jan 26, 2012
If buyer B bought it at the courthouse foreclosure auction and received a "Certificate of Title" then NO the title is not clear and HOA fees are probably owed the HOA by the new owner. Also other liens will survive a foreclosure auction, so for this reason it is crucial to have a title searched before bidding at a courthouse foreclosure auction.

But if B bought it from the Bank "after" there were insufficient bids at the courthouse foreclosure auction. Banks normally list these properties for sale with a Realtor and the house is offered up to all of the "retail" buyers. With this type of sale you normally will receive a title insurance policy and all of the HOA fees and other liens will be fully paid at closing (as evidenced by an Estoppel Letter received by the title company doing the closing). So yes the buyer should have clear title and an insurance policy on the title.

I'm not an expert but I do believe the HOA is entitled to 1 year of back due HOA fees or 1% of the mortgage, whichever is less. Many HOAs attorneys will attempt to get a new owner to pay more their legal obligation and will actually foreclose upon the new owner--even when it may not be the "correct" amount owed. I've seen it happen... especially by certain well known sleazy HOA law firms.

If you bought it at the courthouse, you may have to hire an attorney to fight the HOA and determine exactly what you legally owe.

Good luck!

All the best,
Alma
Alma Rose Kee PA
Future Home Realty
813.244.9898
http://www.SoldOnTampa.com
0 votes Thank Flag Link Thu Jan 26, 2012
Great scenario: Not being an attorney I can only comment my opinion. After foreclosure HOA ( in Fl amount for for one year max only) becomes unsecured debt like for example a credit card debt. HOA can try to collect from Person A or agree on a settlement or sell the debt to a collector for may be 20% on the $ or write it off.

Person B should have clear title or it would have had to be disclosed before closing.
0 votes Thank Flag Link Wed Jan 25, 2012
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