Foreclosure in Miami>Question Details

NA,  in Miami Beach, FL

If a property is purchased at auction under a tax lien sale and money is owed to the HOA from the previous owner, is the new owner liable for the debt

Asked by NA, Miami Beach, FL Wed Nov 24, 2010

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Hi Adrian,

If you purchase a tax lien at the auction you are not the owner of the property only the owner of the tax note. The property owner will owe the taxes plus the interest on the note to the note holder. Therfore you do not need to pay the HOA fees past due.

If you purchase a property at a foreclosure auction you are liable for all outstanding liens aganist the property you purchased.

You need to be certain what type of auction you made you purchase at, in order to know your rights and responsibilities.

I would suggest you contact a real estate attorney for assistance.

If you have any other questions or would like more info feel free to contact me.

Good Luck,
Stephanie Leon
Web Reference:
1 vote Thank Flag Link Wed Nov 24, 2010
In Illinois, I have friends that buy the back taxes, not the property per se, and are guaranteed a good return and the owner gets two years to catch up on taxes in arrears. The holder of the tax lein gets a decent rate of return on the money they paid in taxes on behalf of the seller. These type of auctions do not convey property, but do make better than CD rates. Obviously if you only buy the taxes you are not on the hook for the HOA's. If the property is conveyed, the HOA might not approve your application to purchase during the condo review period to buy unless you settle all back HOA fees. There is a lot of confusion and local real estate attorneys familiar with the county and title work you are involved with are the best resource.

Question really is, what is the difference between a Sheriff sale and a tax sale? Adrian I think you may have been referring to a sheriff sale and not a tax sale. Bank auctions are like sheriif sales but private and held at title companies and attorney offices.
0 votes Thank Flag Link Sun Nov 28, 2010
Hi Adrian,

If a lender forecloses I believe the liability is limited to 1 year HOA or 6 months condo assessments. Not sure if this applies to a buyer at a foreclosure auction.

HOA and condo attorneys tend to be a sleazy lot so I wouldn't trust that they are lawfully going after the new owner for the correct amount.

It would be well worth it for your client to contact an attorney who is well versed in HOA laws. I can highly recommend one of the few respectable HOA attorneys in Florida:

Michael Brudny

Brudny & Rabin PA

200 Pine Ave N # A
Oldsmar, FL 34677-4646
(813) 792-3494

Hope this helps.
0 votes Thank Flag Link Wed Nov 24, 2010
Ruth & Perry as well as Realty One gave you right answers.
My friend buys at auction in FL and yes, the new owner is responsible for paying all outstanding liens, including HOA fees.
That is why so important to perform a title search prior to bidding on the particular property to find out what types of liens are involved etc.
The new owner may try to negotiate with the HOA to reduce the amount or even waive these fees (which in most cases is not so easy).
0 votes Thank Flag Link Wed Nov 24, 2010
Nonsense. HOA liens are extinguished by tax sale foreclosure in Florida.
Flag Tue May 6, 2014
That is a great question. Here in California, the answer is NO. The new owner is not responsible for any previous HOA fees prior to when they purchased the property. In general, the new owner is responsible for any tax liens or property taxes. Hope that helps.
0 votes Thank Flag Link Wed Nov 24, 2010
It might be in your best interest to contact a real estate lawyer.

In Florida, associations are limited in the amount they can recover from a new owner when purchased under distressed conditions (foreclosure, tax, etc.). I don't know what situations are covered and which are not.

I know in the case of a short sale, the lawyer I work with is usually able to negotiate fees in arrears to below those limits
Web Reference:
0 votes Thank Flag Link Wed Nov 24, 2010
Hi Adrian

Absolutely the new owner pays for not just the HOA liabilities but other also.

That's the risk a new owner takes by buying at auction.

Good luck.
Perry and Ruth
Certified Distressed Property Expert.
Web Reference:
0 votes Thank Flag Link Wed Nov 24, 2010
Sadly, yes. I do suggest, however, that you contact the Management Company for the HOA and request to go before the Board for their approval to waive the outstanding debt. Each Board has the authority to waive and/or compromise on outstanding debts. Hoping this helps.
0 votes Thank Flag Link Wed Nov 24, 2010
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