Foreclosure in 33411>Question Details

Scotty, Home Buyer in 33411

I am purchasing a foreclosed property. The seller (a bank) and the HOA cannot agree on what is owed to the HOA. What should I do or what can I do?

Asked by Scotty, 33411 Tue Dec 7, 2010

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If the bank ownes the property through foreclosure, then Florida Statues states that the bank is only obligated to pay 1 years worth of HOA for SFH or 6 months for a condo or 1% of the bank note. So the bank is correct is not paying over the statues (although they could, but why would they) Many HOAs are playing hardball and do not want to cooperate, in Bank owned properties the bank can chose at anhytime not to close. You could offer to make up some of the HOA shortall if you think the property is a good deal.

In a short sale the HOA and the negotiator has to come up with a number.
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2 votes Thank Flag Link Tue Dec 7, 2010
All good advise here. How long have the seller and HOA been negotiating? In my experience the HOA will usually accept 1 year's overdue HOA fees.

I would suggest you find out how much the difference ind...and ask your Realtor or your Attorney to offer a portion of what is considered 'due' in your behalf...if you feel the property worth it !

Good luck and focus on your goal!

Marsha Montoya Mayer- Realtor
Paradise Properties of Florida, Inc.
Cell: 561-329-0428
0 votes Thank Flag Link Tue Dec 14, 2010
Two things 1. The title company cannot force anyone to accept anything all they can do is request and have the seller pay for the estoppel letter which is collected at closing which states the amount that is owed or in this case they will accept. 2. If the bank cannot give clear title they are not obligated to close the deal, a regular seller who cannot deliver clear title is allowed an additional 30 days as per the FAR BAR contract to clear this if after 30 days they cannot cure then the buyer has to write a letter requesting a cancellation and a return of the escrow funds. Bottom line is the Bank (seller) and HOA has to agree on an amount that will release any HOA claim on the property. All parties can agree to contribute some money to make sure that this happens
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0 votes Thank Flag Link Wed Dec 8, 2010

Just thought of a valid threat your attorney or the attorney for the Title company, could communicate to the HOA attorney.

If the closing is delayed past December 31st because the HOA attorney fails to extinguish a lien that is fully satisfied per the Florida statutes then the Buyer shall expect to be reimbursed for the "extra" property taxes that will be owed if he cannot file for Homestead Exemption!

If you are planning to occupy as your primary residence you may lose about $700 by paying that much extra in property taxes next year! You must own and reside in the property by Jan 1st 2011 to get the Homestead discount.
0 votes Thank Flag Link Wed Dec 8, 2010
You can either pay the difference yourself, suggest that the bank covers it and ups the price by that amount or let them work it out between themselves. HOA are very known to be pretty nasty when it comes to past due fees, so it might be easier for you to cover the difference if it's not too much.

Andrew and Elena Ollick
Amerivest Realty
Latest Post: Housing Has Finally Hit the Bottom
0 votes Thank Flag Link Wed Dec 8, 2010

Quite simply, take a step back and let them "duke it out."

The bank as the owner is responsible for providing the new buyer with a clear title.....if the is debt associated with the property or the HOA has put a lien on the property the bank will not be able to close any transaction involving the property until it is resolved.

Your options are minimal and directly controled by the resolution of this issue. On the other hand, if deadlines have not been met by the seller, you can elect to move on and explore other options.

Good luck,

0 votes Thank Flag Link Wed Dec 8, 2010
Hi Scotty,

Unfortunately many of the HOA attorneys are a bit sleazy and may attempt to coerce a lender or the buyer to pay them more than is required by Florida Statutes because they know that they have to release the lien for the sale to close. As Antonio and others have suggested, make the HOA attorney an offer to pay them a few hundred dollars. Alternatively if they want you to pay thousands of dollars it may be worth hiring an attorney to at least send a threatening attorney to the HOA attorney that you will pursue them in court to remove their lien. Make sure your attorney also sends a copy of her letter to the Board of Directors because the "volunteer" board of directors for HOAs often rely on often unethical advise from self-serving HOA attorneys. There are certain well known offending HOA law firms and I would bet you're dealing with one of those firms. It may be less hassle to just pay a few hundred dollars.

Good luck!

0 votes Thank Flag Link Wed Dec 8, 2010
hi Scotty;
I got in late on this, but all the answers were great. The Title Company in Florida usually helps resove this. But they do not represent you. Maybe in this case you should consult a Real Estae Attorney to make sure you get a clear title and all fees are paid before you close.
0 votes Thank Flag Link Tue Dec 7, 2010

Teddy below has the best answer. I had a similar situation and the closing was on hold for close to a month, the lender was ready to walk away. The buyer offer to pay a portion of the amount in disagreement and the bank agreed to pay the rest, we closed in 2 days. And buyer ended with a great home at a great price.

So if the home is worth it, offer to pay a part of the amount in question. That should get things moving.

Tony Vega
Charles Rutenberg Realty.
0 votes Thank Flag Link Tue Dec 7, 2010
Fortunately the title companies normally take care of this. On one of my foreclosure properties the buyer actually came up with a few hundred dollars to make the deal work as they were getting such a phenomenal deal on a higher end property.

Jeremy Dysch
Realty Associates
(561) 351-6843
0 votes Thank Flag Link Tue Dec 7, 2010
Hi Scotty,

Myra is right. Any liens or unpaid debts agains the unit would be collected and distributed by the title company. However I think what is happening is that the Bank only wants to pay off a certain amount of the HOA debt. There isn't much you can do unless you agree to pay the difference, which I don't suggest. At this point all you can do is wait to see what the work out.

Best of luck,

Isabel Williams
“Your Best Friend in Real Estate”

RE/MAX Masterpiece Realty
1775 SW Gatlin Blvd
Port St Lucie, FL 34953
0 votes Thank Flag Link Tue Dec 7, 2010
The sellers title company will request an estoppel from the hoa which states what is due. What we are finding is some hoa attorneys tagging on crazy fees, as much as $5,000 knowing the bank might not fight it. In your case it sounds like there are unreasonable fees from the association or attorney. Until those matters are negotiated, you can't close.

Craig Fialkowski GRI,CDPE
Realty Elite The Palm Beaches
0 votes Thank Flag Link Tue Dec 7, 2010

As long as your contract with the bank has been properly executed by both parties and they are responsible for clear title you have nothing to worry about. Make sure that you are getting an Owner's Title Insurance Policy which hopefully is being paid for buy the Seller. Many times banks are pushing this expense back on the Buyer in their addendum so make sure you have read the document carefully.

The title company will work to resolve the financial issues with the Homeowners' Association and will need a clear estopppel from them before you will be able to close on the transaction.

I hope this information is helpful and the very best of luck with your new home.

Always at Your Service,

Tom Priester e-PRO
"Results Driven Real Estate"

Keller Williams Realty
561 308-0175
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0 votes Thank Flag Link Tue Dec 7, 2010
They don't need to agree. This is a task that the title company works on. I have had it sometimes take as long as three weeks until it is solved. But it was always solved by the title company.
0 votes Thank Flag Link Tue Dec 7, 2010
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