My townhome is being foreclosed on. When can I legally stop paying the HOA. When is the property no longer mine?

Asked by Kat, 91335 Tue Mar 15, 2011

I will be at the six month mark with no payments in May this year. I live in Reseda California.

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Susan J Penn, PA,SFR,CDPE’s answer
Susan J Penn,…, Agent, Weston, FL
Wed Apr 20, 2011
Dear Kat,

The answer to your question is dependent on trying a short sale verses a foreclosure and knowing the difference between the two. Usually with a shortsale your turn around time is much shorter to purchase again- 2 years, with a foreclosure the time period is 5 to 7 years. Speak with an attorney and a certified publlic accountant.

Susan Penn, PA, SFR
EWM Realtor
2000 Main Street
Weston, FL 33326
0 votes
Alo webb, Landlord, New Rochelle, NY
Wed Apr 6, 2011
Hello Kat.

You should continue paying your HOA until the bank has completed the foreclosure process. If the HOA fees are not paid they may also initiate a foreclosure proceeding which will impact you more directly because the management company may start to decrease other services because you are not making HOA payments. If you have any questions about the foreclosure process in California you can review the link here,
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Emily Knell, Agent, Huntington Beach, CA
Wed Mar 16, 2011

Both of those methods with completely wreck your credit & you won't be able to get another Conventional loan for 7yrs after your foreclosure. You could also get a bill from your HOA or a collections co. after the foreclosure for your missed payments.

With a SHORT SALE, if you've decided to stop making HOA payments it can be negotiated for your mortgage co. to cover the late payments & for them to also pay any Late PROPERTY TAXES owed as well!!!

After a short sale you could potentially purchase another property within just 2yrs, get back into the real estate market & watch your equity grow from the BOTTOM.

Only 40% of short sales that are listed will successfully close. I have a 100% success rate closing short sales. If I don't hear from you, please just remember to ask for an "Inventory Report" from whichever real estate agent you choose that shows you how many short sales they have closed being on the Listing Agent side.
562-430-3053 cell
Short Sale Expert
1 vote
Benjamin Lop…, Agent, Valencia, CA
Wed Mar 16, 2011
Dearest Kat,

As you can tell there is a lot of information that may impact you. There are many factors that may come into play if you stop paying your HOA. I am a local REALTOR in the San Fernando Valley and would like to discuss with you your options during your difficult time of Foreclosure.


Benjamin A. Lopez
License #01789580

Atlantic & Pacific Real Estate
20635 Ventura Blvd, Suite 100
Woodland Hills, CA 91364
1 vote
Philip Roy, Agent, Las Vegas, NV
Tue Mar 15, 2011
Hello Kat,

You must pay your HOA right up to the day of foreclosure. There is no way around this and if you do not pay, the balance will get huge with penalties and attorney's fees.
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1 vote
Lorrie Feld,…, Agent, Scottsdale, AZ
Tue Mar 15, 2011
Hi Kat,
Unfortunately there are no such laws that legally allow you to stop paying your HOA. You are financially responsible to pay the HOA dues even if you are not paying your mortgage. The HOA can come after you and sue you for the owed amount and depending on CA rulings can collect lawyers fees as well. You are hurting the community by not paying your share of the HOA dues and possibly causing fees to be increased for those that are still living there. Where else is the shortfall going to come from? You should do whatever you can to pay your HOA dues after all you are still living there and benefiting from whatever amenities you have there.

The property is no longer yours the day of foreclosure which you probably have gotten a notice about. As it gets closer, you would be wise to start making plans to find another place to live.

Good Luck
Lorrie Feld
Keller Williams Integrity First Realty
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1 vote
Justin Ruzic…, Agent, Greenville, SC
Wed Apr 20, 2011
I would have to agree with Michael Cantino, it isn't illegal to be broke. If you can't afford your mortgage and you are not trying to do a short sale, i know many many people who stopped making thier HOA payment at the same time they stoped paying on thier mortgage. If you have a pool and use it, well you might lose the use of that. One person put it like this, paying the HOA is throwing money down the drain.
To answer your second question, the property is no longer "yours" when the sherrif sells the property at a public auction and job buyer purchases it at the public auction or when joe buyer says it's not worth $123....and the bank says it is, so the bank takes it back through the auction process. Then it is no longer yours. However that being said if you keep the property in good condition and often times when the bank takes it back they hire a realtor to sell the property, and if you are still in the residence the realtor has to go through the eviction process to have you removed and instead the bank allows the realtor to offer you cash for keys to move out within 10-14 is a way to get a few thousand bucks for yourself.
here is a good blog i wrote on short sales and foreclosure…

good luck
0 votes
Marianne Ban…, Agent, Englewood, CO
Wed Apr 20, 2011
As I understand it, you have an obligation to pay until the property has sold. May times the property isn't deeded in a timely manner, so you may continue to get billed even after the foreclosure date. If this happens, contact the government entity that can give you something in writing proving the sale of the property to take to the HOA.
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Michael Cati…, , Boca Raton, FL
Wed Apr 20, 2011
It is not illegal to stop paying in any state. The hoa may force the sale of your property but you won't be convicted of a crime for not paying. I repeat it is not illegal to be broke. In fact there are laws to help you in your favor if you are broke.
0 votes
Peter Sambets, Agent, Pearl River, NY
Wed Apr 20, 2011
Hello Kat,

As many agents here have posted, Please consult with an attorney in your state for their advice. But, the simple answer is you can't legally stop paying the HOA fees until the bank owns the home. Since we all sign documents so quickly at a typical closing, you were likely to miss the agreement with the condominium's HOA board. I am the treasurer of a Condominium/Townhome HOA in Nanuet, NY. We currently have one unit in foreclosure. Though it looked certain there would be a foreclosure, the owner, after ignoring the Board's inquiries for about a year, approached the board with a payment plan to catch up and keep current going forward. So, communication is the answer and you never know how long it will take the bank to actually foreclose. In NY State, we were able to attach a lien to her home, making a difficult sale even harder for a prospective buyer. The lien amount will also be calculated in the foreclosure and since many people's homes are worth less than the mortgage, there would likely be no monies available to pay the back common charges. You may also face garnishment of future wages as some courts will not simply dismiss the debt.
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Joanne Dungca, Agent, Spring, TX
Wed Apr 20, 2011
Hi Kat, during the course of the foreclosure process you should receive a notice of default that you can present to your HOA to advise them that the home is going into foreclosure. As for when you can legally stop paying you will have to wait for the foreclosure process to be completed. If you really can't afford to pay the HOA you can even advise them and they may pay the HOA fees for you to prevent the HOA from foreclosing and putting a lien on the property.

However, there are many ways you can avoid foreclosure if you don't intend to keep or cannot afford to keep the property.

If you intend to keep the property and you have some income to do so, you should contact your lender for a forbearance or loan modification. If you don't intend to keep the property I would consult with a realtor to get the property listed as a short sale and contact your lender to ask them about the possiblity of running a deed in lieu of foreclosure concurrent with a short sale incase the property does not sell. You want to do everything you can to avoid foreclosure and there are workout solutions available to you, you just have to be willing to ask. California is normally a 4 month foreclosure state, I would contact your lender immediately.
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Mary Ingalls, Agent, Bolton, CT
Wed Apr 20, 2011
You should always consult an attorney...perhaps they could even help you prevent your townhome from going into foreclosure. As long as you own it...shouldn't you legally be paying it..
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Lisa Barall-…, Agent, West Hartford, CT
Wed Apr 20, 2011
Kat, you should consider consulting an attorney regarding the question of when can you legally stop paying the HOA. Realtors are not the right people to answer this question since we're not attorneys and don't have that background. Depending on the type of foreclosure, strict, by sale etc. you will be notified by the lender as to when the property is no longer yours. Good luck.
0 votes
Sara Mehrpou…, Agent, Los Angeles, CA
Wed Mar 16, 2011
Hi Kat. I'm local to your area and specialize in foreclosure and short sales.

Why is it that you do not want to attempt a short sale on your townhome? It would be at least somewhat better for your credit than a foreclosure. It's difficult to give out information without knowing some specifics about your situation. Please call me so that we can discuss this more. I would keep your HOA current if you can. Some of these HOAs plan on pursuing the homeowner if they are past due sometimes.

Sara Mehrpouyan CDPE
Rodeo Realty
Direct: 818-903-2040
0 votes
John Arendsen, Agent, Leucadia, CA
Wed Mar 16, 2011
Are you really sure you want to let your townhome lapse into foreclosure? It will haunt you until 2020. You may want to consider a short sale. If you've lost your job or are just underwater a short sale is by far your best solution. You'll be able to walk away and it will only impact your credit for a couple of years if at all depending on how your RE broker/agent negotiates your deal.

As far as your HOA fees are concerned that's totally up to you. No doubt the HOA will pressure maybe even harass or threaten you but you have the final choice. It will also show up on your credit but if your in financial straights and are considering a BK it's just another debt you'd be throwing into the ring. Good luck and think wisely.
0 votes
Eli Givoni-S…, , Boca Raton, FL
Wed Mar 16, 2011
If you're asking a legal question, you need to call an attorney. Although, I can tell you that many of our clients stop paying the hoa at different times during the pre-foreclosure process. Some stop paying when they can't afford it, and some just stop when they feel like it, because they want to save their money for a move.

Why would you let this property go to foreclosure? You can do a short sale and keep foreclosure off your credit.

We are a professional short sale service and would be happy to explain the process to you. Please call us directly to discuss your specific situation. Our services are FREE to homeowners. We look forward to hearing from you.

Eli Givoni, Director
Short Sale Department, LLC
Serving all 50 states

MARS Disclosure for General Commercial Communications
Short Sale Department, LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.
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Scott Godzyk, Agent, Manchester, NH
Wed Mar 16, 2011
You are responsible for the hoa and other expenses until the day you do not own it any longer, in most cases it is the day of the foreclosure auction. You still own it even though you are not making payments, you would have been better off to sell it through a short sale to save you 10 years of a foreclsoure on your record. If they have not set a foreclsoure date you may have time, simply call your lender, ask for home retention and ask. if you do have time hire an agent who is well expereinced in short sales, save your credit and some banks will allow you a payment to assist you to move.

Please see my blog for an intro to short sales and tips and advice
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