does a HOA lien have to be paid in a foreclosure sale?

Asked by mcall1966, Phoenix, AZ Thu Jun 13, 2013

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Karen Peyton, Agent, Chandler, AZ
Fri Aug 9, 2013
You don't say who you are (Buyer or Seller) relative to the situation.
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Mack McCoy, Agent, Seattle, WA
Thu Jun 13, 2013

It is a lien on the property, and it is not extinguished when another lienholder forecloses on the property.
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Derek Ostrov…, Agent, Sun City, AZ
Thu Jun 13, 2013
Everything depends on what the contract says. In Arizona AAR Residential Resale Real Estate Purchase Contract (lines 124-126) clearly state that "All assessments and fees that are not a lien as of the COE, including homeowner’s association fees, rents, irrigation fees, and, if assumed, insurance premiums, interest on assessments, interest on encumbrances, and service contracts, shall be prorated as of COE" In case where the HOA fees have been delinquent for a long time and the HOA no has a lean on the property one has to be careful with lines 127-129 as there it will be indicated who will be responsible for it. The bank can sell an REO and the previous owner can remain responsible for past HOA fees.

If your bank is foreclosing on your home you do need some legal advise regarding this type of question. If you are in process of buying an REO and you have concerns about the delinquent HOA fees, work closely with your agent and title company to answer these questions. It you are just researching a potential pitfalls of buying and REO call me:

Derek Ostrovski
Coldwell Banker Residential Brokerage
9949 W Bell Rd Suite 101
Sun City AZ 85351
623-972-1161 office
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James Wehner, Agent, Scottsdale, AZ
Thu Jun 13, 2013
It depends. Are you the buyer or the seller? If you are the buyer at the trustee sale foreclosure auction, then no, you don't have to pay. The HOA is typically a junior lien to the foreclosure lender. If you are the seller, you may be held liable for the personal obligation to pay the debt.

Actually in some cases, the Homeowner's Association can be the foreclosing party.

There are so many variable to this situation. You are best advised by speaking with a real estate attorney.


James Wehner
West USA Realty
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Mark & Terri…, Agent, Scottsdale, AZ
Thu Jun 13, 2013
One more thing to add- if purchased at an auction the buyer is responsible for the liens. Not quite sure of your situation but hope this info helps.
If we can assist you in any way, please feel free to contact us. Thanks!
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Mark & Terri…, Agent, Scottsdale, AZ
Thu Jun 13, 2013
Hi mccall1966- Yes, in order for title to transfer ownership the lein has to be paid. In most foreclosures, the bank has assumed that lien unless otherwise stated. There are always exceptions.
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Rocky Dole, Agent, Maricopa, AZ
Thu Jun 13, 2013
Yes, you will probably still have to pay the HOA fees. The fees are considered a personal liability and run with the person, not the property.
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