Home Buying in Montclair>Question Details

Kungfugeisha, Home Buyer in Cherry Hill, NJ

In a short sale, what happens to condo fees?

Asked by Kungfugeisha, Cherry Hill, NJ Tue Dec 7, 2010

I am in the process of negotiating with BoA for a short sale property. It is a condo with somewhat high monthly association fees. I assume that the previous owners are not currently paying those fees so in most cases, what ends up happening with these fees? Does the balance accrue until the new owner takes over and has to pay it? Or do most associations just forgive the balance since it is kind of a lost cause?

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My experience has been that the primary lender takes care of any past association fees. Reading below, it looks like that might not be the case with all lenders. PRobably the best thing to do would be to ask BOA if they will cover them. Otherwise, you might want to get a copy of the POS for the association. That might outline their procedure for dealing with them.
Since the debt was never yours, you should absolutely not be paying them. The association if it does not get paid will probably go after the previous owner and file a judgement.
Good luck
Web Reference: http://www.dianeglander.com
0 votes Thank Flag Link Fri Dec 10, 2010
Unfortunately, there is no single answer. I closed a short sale recently where the lender (Wells Fargo) paid the condo fees that were in arrears. I've just listed a condo as a short sale with Chase as the lender and have been advised that Chase may not pay the back fees. Everything is negotiable, but neither the association nor the lender can require payment from the the new owner. Either the B of A should pay them or the association should go after the prior owner or just take the loss.

Gloria Falzer
RE/MAX Village Square
Montclair, NJ
973-509-2222 x 137
0 votes Thank Flag Link Tue Dec 7, 2010
The bank that has the loan will know all the fees, taxes, etc due on the property and figure them all into the deal so when you buy it everything is current as of that date. They will prorate them so you will have to start paying the monthly fees from the date of closing.
0 votes Thank Flag Link Tue Dec 7, 2010
I recently saved an excellent overview on condo fees and who pays them in a short sale situation. Like everything else associated with a short sale, there arenuances to the issue. Written by a California agent, this blog piece really says it all: http://activerain.com/blogsview/1865631/who-pays-late-hoa-fe…
0 votes Thank Flag Link Tue Dec 7, 2010
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