Jason Bahrt, Home Buyer in Sunny Isles Beach, FL

In Florida (Miami-Dade) Does a winning bidder on a foreclosure have to pay HOA fees that previous owner did not pay? Does bank pay?

Asked by Jason Bahrt, Sunny Isles Beach, FL Thu Jul 26, 2012

I am thinking of buying a foreclosed property in the Miami-Dade area of Florida. I keep reading about homeowners who get liens on their properties then foreclosed on by their homeowner associations for back payment. Do banks who take possession of these homes have to pay the taxes and fees? or does the person who buy the foreclosed property at auction have to pay. Also, I read banks only have to pay 12 months worth of HOA fees. What about the person who buys the foreclosed property? And if you want to look at several properties before buying at a auction, where can you search for these "liens"? Thank you

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Hello Jason,

This depends on the seller (the bank).
Most banks will pay maintenance fees/HOA fees until the day of closing, with buyer being responsible for the balance, whatever it might be.

FL is a judicious state with forecloure lawsuits go through the court system.
This means that all parts of foreclosure law suite have to be done "right" by the bank(s).
If the bank does not make any mistakes - they are obligated to pay 1% of loan or 12 months of maintenance fees (if condo), whatever is more, by FL law. However, I know of a condo association that successfully got 43K in unpaid fees from Fannie Mae, because the deed was passed along in a way that bypassed the law mentioned above.

I would not expect a 100% guarrantee of a clear title in case of any foreclosure (read your contract and bank addenda carefully). Often, the title is passed with exceptions. That's why it's good to have an attorney working on your side - to make sure that you are not getting a bad situation on your hands. Sometimes, it's better not to buy...

Foreclosure lawuit wipes out all mortgages and some other liens, except taxes and I've seen code violations etc left unpaid by foreclosures. Banks do pay off taxes. Some condo associations will negotiate with the seller/buyer as to how much of a discount you could get on past due fees, if for some reason the condo fees/hoas are still due. You start from the lowest number and go up to the number you are comfortable with.

Good idea to check with the city on code violations and open permits.
Some cities fees are outrageously high and require a week or more to check these for you, and some are more open and won't charge. You can also go to the condo management for a rough idea of the past dues, although most will charge a fee for this - estoppel letter fee.

I suggest to develop a good relationship with the title company lead by an attorney and have them on retainer to verify things for you - if you are in business of real estate investment.

Hope this helps,

Irina Karan
Beachfront Realty, Inc.
1 vote Thank Flag Link Fri Jul 27, 2012
Irina, It is "whichever is less", not whichever is more. Tha Bank chooses and if 1% of Original mortgage is less, they will pay 1 %
Flag Wed Nov 20, 2013
Some of what you know is correct.

When you buy a Foreclosure from a Bank (who obtained it back from an owner) a title company guarantees clean title. That is no liens or past due fees. Of course that means any liens that have been placed on the property prior to closing.

When you buy a Foreclosure at an auction on the court steps, you are responsible for any past liens or debt. So that is not recommended for a home owner without investment experience.

Yes, I have also heard about banks only having to pay the last 12 months of past hoa fees. However, I am in the process of selling a property where the HOA is collecting fees all the way back to 2007 (over 10K). So there must be an exception to the rule.

Now in the news you can read about associations sueing banks for not maintaning empty properties and creating slums.

Finally, yes an association can foreclosure on an owner for past dues.

It would be wise for you to visit a local Title company and get all your questions answered in person, most title companies are owned by attorneys or have them in staff. You can also pay a little extra and make sure your closing documents are reviewe by an attorney prior to signing them.

Hope this clears things a little. Was this answer helpful? If so please click on the "green thumbs up" or the "best answer".

Tony Vega
La Rosa Realty
1 vote Thank Flag Link Fri Jul 27, 2012
I will say that every case need a special attention. Work with a Realtor you trust and when it comes to legal advise, ask an attorney. Before buying, always ask your Realtor to perform the necessary search, lien search, etc. You take your decision to buy on the total cost, not only on the fact that there is some owed money to be paid. If the total cost is convenient and you like the place or it can become the perfect investment, just go for it. Always based your decision on fact and analysis.

Eric Morin
Keller Williams Realty
0 votes Thank Flag Link Sun Sep 30, 2012
Jason,hi. I have red all comments and was confused myself. The HOA fees you can search in the the management office of the association, the rest I would advice you to get from the attorney who will make title search for reasonable amount $ 150.00 for example. You would still need an advice from real estate professional or would need one if you buy the property on the auction. Have a good one. Igor G.
0 votes Thank Flag Link Sat Sep 22, 2012
Jason, hi. Yes the winning bidder is responsible for all bacl HOA fees. If the bank wins at foreclosure( be the highest bidder) the bank is responsible only for 1 year back HOA fees. Please call me if you have any further question to (305)7993141. Igor G.
0 votes Thank Flag Link Sat Sep 22, 2012
You can email me at patrickmiamibeach@gmail.com or my web http://www.miamiyourdreamproperty.com
Kind regards,Patrick.
0 votes Thank Flag Link Sat Sep 22, 2012
Buying a Bank foreclosed property is pretty much "safe", just make sure the contract specifies who is responsible for what. Also DO NOT assume that any property you buy at an Auction, has been foreclosed by a Bank, you may buy a huge liability at an auction if you attempt to do it alone without an experienced real estate professional. Best of luck to you!
0 votes Thank Flag Link Sat Jul 28, 2012
From what I've seen recently, people are paying more than they should for these foreclosures. I'm recommending my buyers concentrate on short sales and regular sales instead. Right now, newly marketed foreclosures (if priced correctly) are getting 10 or more bids, driving prices up. If you're not getting a foreclosure for 10% less than what other properties on the market are selling for, it's probably no bargain - you're going to need to do repairs, have headaches like this related to HOA and other liens, etc.

Talk to a Realtor about looking for liens. Depending on the auction, one may even be willing to represent you in the transaction (some pay Realtor fees).
0 votes Thank Flag Link Fri Jul 27, 2012
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