if there are deliquent home owners dues and the property is being sold on a short sale how far back can the home owners association expect to collect?

Asked by Fetzer, 98201 Wed Dec 28, 2011

The home is in foreclosure but seller engages in a short sale. There are three years of deliquent home owners dues. Can the association expect to collect ALL deliquent dues as closing? I have been told by an attorney that they can only collect for the past six months in Washington state.

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Brian Acey, Agent, Everett, WA
Wed Dec 28, 2011
I recently had a short sale in a situation like you are describing. State law allows that a HOA can only collect 6 months of past dues without releasing a lien on a property. However, many HOAs are filing suit against the individual homeowner and getting personal judgments against the owner for the entire delinquent amount plus attorney fees and interest. The buyer will not be responsible for any HOA dues that are in arrears and the seller's lienholder MAY pay more than 6 months of HOA dues, but I am finding that the larger banks are putting strict guidelines preventing any more than 6 months being paid at closing from the proceeds of the sale. The issue with HOA dues being in arrears can have a devastating effect on an entire complex. If more than 15% of the units in a complex are behind in their dues, then getting financing to purchase any condo in the complex can be extremely difficult, driving values of the individual units down further because the only way to purchase a unit in a complex such as this may be a cash only situation. Keeping HOA dues current benefits everyone.
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Jim O'Day, , Arlington, WA
Mon Sep 10, 2012
They will go after the full amount, but generally are only granted 6 months.
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Daniel, , Baton Rouge, LA
Mon Feb 13, 2012
1st of all, why should that matter to you? If you are not a particular in this deal, who cares
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, ,
Thu Dec 29, 2011
Did you pay the attorney for his advice and get the answer in writing?
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Jirius Isaac, Agent, Kenmore, WA
Wed Dec 28, 2011
Everything is negotiable in a short sale so it depends on who is doing the negotiations on both sides. As agents, we can only share our experiences, which are all over the board. As to the law, I would trust only a real estate attorney that does short sales to answer the legal question you pose.
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Natalee Thur…, Agent, Marysville, WA
Wed Dec 28, 2011
I just closed a Short Sale and the Seller never paid HOA dues. The first did pay the entire amount, to make sure that it did not become a lien on the property. When I have a Short Sale everything is a negotiation, including HOA dues. The HOA is just like Sewer and is viewed as attachment , so the Association can file a lien against the property. Make sure through title that one is not already on the home.
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Dan Tabit, Agent, Issaquah, WA
Wed Dec 28, 2011
I've heard the same thing, that 6 months is all they are entitled to. Some associations will try and collect more, and you are free to pay more, but I would trust your attorney on this.
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