Liens...and Foreclosing... - Posted by acw

Posted by Rich-CA on September 03, 2008 at 17:21:09:

I deal with HOA issues all the time ranging from easy to hostile/incompetent. As a buy and hold person, I usually try to fulfill my end of the deal and work with an HOA. That is because unless you are selling and leaving the development, its like burning a bridge you are still standing on. I get bent when they go far beyond what their documents say they can do at which point I dig in my heels. In two cases it turned out to be an over zealous HOA manager and not the HOA board itself and in both cases an end run to the Board got the manager removed. But I generally only buy bargain priced retail properties for the purpose of renting them out, so its a whole different thing.

Liens…and Foreclosing… - Posted by acw

Posted by acw on September 03, 2008 at 07:20:52:

If you purchase a HOA lien…can you force foreclosure on that lien if that property is homestead?

What is it is not homestead?

Depends on the state - Posted by Rich-CA

Posted by Rich-CA on September 03, 2008 at 12:34:31:

I have a property in an HOA in CO where they HOA foreclosed a unit because of non-payment of dues. This unit is rented out by the HOA for additional income. So depending on where you are, yes they can foreclose and take ownership of the property.

Re: Liens…and Foreclosing… - Posted by JT-IN

Posted by JT-IN on September 03, 2008 at 10:00:19:

As stated this will vary by state…

I would think that the HOA lien would carry the same weight as a mtg, and have the ability to foreclose, but just a guess, when dealing with Homestead laws. You may wish to also make certain that any right of foreclosure is transferrable, if the lien is sold, in the situation of homesteads.

As for non-homestead states, no question one could foreclose.

Vague questions will get you vague answers… - Posted by Rick, the Probate Guy

Posted by Rick, the Probate Guy on September 03, 2008 at 09:40:06:

Real estate laws vary widely from state to state. So, any anyswer would be dependant on the state the asset (real estate) is in, as well as an awful lot of other facts concerning the circumstances and how the various local laws apply to that.

Also, there are different types of HOA liens; some are super-priority liens which ‘leapfrog’ in front of all other liens (except Federal liens and property tax related liens), however some HOA’s have deficiencies in their CC&R’s that require the association to obtain a money judgment.

So, your question is impossible to answer with such sketchy info.

Try posting the State and more facts and (hopefully) you’ll get your question answered.

Re: Depends on the state - Posted by Rick, the Probate Guy

Posted by Rick, the Probate Guy on September 03, 2008 at 17:04:53:

Rich - I currently have exactly the same issue to deal with at present, and I’ve followed this one for years.

As we all agree, it’s impossible to advise the original poster due to the lack of sufficient information. However, for a semi-interesting file, here’s a fact pattern:

I foreclosed on a house (in CA) several weeks ago due to the borrower’s failure to make payments (this makes sense because I later learned that she died in the house and…well…that’s another story).

Just prior to my trustee sale, the self-managed HOA’s President obtained a judgment and recorded an Abstract. Even if this HOA had corrected amended their CC&R’s to reflect the ability to record liens with the necessity of getting a judgment, they’d still lose out.

Now, according to the Household ruling of some years ago, the HOA lien is junior to my trust deed and was therefore wiped OFF title. The debt is not extinguished, but the debtor, now deceased, leaves an insolvent estate without other assets.

So, to the letter of the law, and the Household et al caselaw, I don’t owe a nickel for past dues. The bugaboo here is that the HOA folks are only owed a small amount, can’t afford to be stiffed by “Mr. Probate/Title Technician” and frankly, that have been exceptionally helpful.

So, while I don’t legally own the money, I’d be shooting myself in the foot by avoiding the payment. I must be turning into a softy.