Posted by Royce on September 10, 2009 at 22:21:49:
Thank you for your response!! The home is in MN. It was a USbank REO. I believe that the owner who foreclosed missed a few payments. The remaining balance was a yearly insurance assessment that USBank didn’t pay along with fees for rules and regs, association disclosures etc. According to the manager, he provided them to USBank without payment. If this is true, it is very sloppy. When I have requested those documents in the past, I have had to pay up front.
Thank you for the info! It is much appreciated. I’ll follow up with the title company.
Posted by Royce on September 10, 2009 at 24:31:02:
I recently purchased an REO townhome. When I closed on the house, the title company missed the unpaid association dues. As a result, they weren’t a part of the settlement statement and were not paid. They are owed about $600 from the previous owners. The first thing the association manager said when I let him know I was the new owner is that he would put lien on the house if I did not take care of the past due amount.
If he was going to put a lien on the house, he should have done it before. Of course, it would have been cleared off after the foreclosure. I’m pretty sure I am not obligated to pay the previous owners debt. Does anyone know for sure what the law is? I am working with the title company to try and get the bank to pay the debt but, of course, they haven’t responded to his requests. Would title insurance take care of this?
Re: Townhome Association Back dues - Posted by JT-IN
Posted by JT-IN on September 10, 2009 at 12:19:18:
What state is property located? Assn dues are treated very differently in some states, like FL.
Title ins will try NOT to pay here and they will likely tell you it is based upon liens and debts “of record”, and this was not recorded. However the mere filing of any Assn docs should absolve you of that argument. There simply should have been a release provided by the Assn stating ALL fees have been paid to closing date and the fact that title co didn’t obtain this (std doc) should make them liable.
Title co will pay this out of their pocket if the Seller (Bank) doesn’t pony up; IMO. I would suggest that you place the title co “on notice” that the Assn has threatened a lien and that you will hold them responsible for any such charges involved in releasing such a lien.
This should all go away pretty quickly, mainly due to the fact that you are talking hundreds here, not thousands, or worse. Good luck.
One additional point here, most Condo Commando’s do NOT know the law. They threaten liens, etc and usually get folks to comply based on those threats. They are under extreme financial pressure today due to all the defaults so they are squeezing whoever will hold still for their bullying. Depending upon the state, maybe this is owed, maybe not. The fact that a release wasn’t obtained could make it a valid claim, at least Assn dues since the completion of the prior foreclosure…? Do I understand right that it was an REO…?
Re: Townhome Association Back dues - Posted by Royce
Posted by Royce on September 15, 2009 at 20:55:24:
Thanks for your insight! The past due amount actually ended up being around $1100. The title company has agreed to pay all back dues and assessments. The only thing I will be paying is a prorated amount for the yearly insurance assessment. That’s a couple hundred and rightfully mine.