HOA fees in Chapter 7 - Arizona

[idainc]

We filed Chapter & Pro Se April in advance of a trustee sale on our home in an HOA. The HOA had already placed a lien on the property and I listed the HOA as a creditor.

We are moving out of the house and sending the lender a letter surrendering the property to them.

I received a bill from the HOA for their fees and they are under the impression that I am liable for them until title passes to a new owner.

They can spend the time and effort to take me to small claims court and my defense will be that they were discharged.

Since they already have a lien I suspect all liens and taxes will need to be satisfied as of the date of transfer and I will only be liable for their fees from the CH7 filing date. Does anyone on the group have any experience with this ? Thanks in advance

[justbroke]

Any fees received post-petition (after filing) and before the ownership (title) actually changes hands, are your responsibility ( 11 USC 523 (a)(16) ). Some States, like Florida, have laws in place which offset some of this responsibility to the bank holding the lien for some period of time. For example, Florida makes the bank responsible for the "last" 12 months of fees up to 1% of the mortgage balance. If it takes 2 years to foreclose, you would be responsible for one year of the fees.

Now, anything that happened before filing is discharged and they can't collect on that, but they did record a lien, so they do have recourse by foreclosing on the property.

Please note that a "letter" doesn't surrender the property, nor does your "intention" -- on the Statement of Intentions -- change legal ownership and title to the property.

[idainc]

Thanks justbroke.

Thats what I thought. We were supposed to have a trustee sale on April 14 so we're waiting for a lift stay motion any day - althought is been a month since filing.. Thanks for advice on change of ownership. My intent was to tell them the property is vacant and most importantly has a fire sprinkler system that withough city water services wont work. This letter will give them permission to turn on the water in their name to protect " our" asset.

Now another matter. This HOA has violated the automatic stay and I have it in writing. How can I move aginst them for damages ? I'm pro se.

[justbroke]

Now another matter. This HOA has violated the automatic stay and I have it in writing. How can I move aginst them for damages ? I'm pro se.

They can bill you for anything that was assessed after the date that you filed your petition. That wouldn't be a violation.

In any event, a single event where you're billed doesn't get you "sanctions" and an award of damages. Generally, the Court likes to see that the debtor contacted the creditor -- in writing -- informing them that a further demand for payment will result in an order to show cause. Then if they do so after your "documented" notice, you could ask for entry of an order to show cause and for sanctions. Damages are actual.

[idainc]

Iy was a billthat covered both pre filing and post giling expenses. The HOA person has no idea what they're doing and turned it over to their paralegal. I'm going to tell this person what the law is and that they are in error. Nicely one time.

Besides I would find it hard to believe that if there is a trustee sale they must be selling a clear title and they arent going to let a small amount stop it while they wait for me to pay a bill. The min. bid should include all costs for the clear title.

So I would have to go to court with a motion to show cause ?

I was looking for the section of the law that states that HOA fees are dischargeable ( prior to filing date ).

[idainc]

[justbroke]

If you are discharged and they haven't foreclosed... doesn't affect their rights to foreclose (unless you voided the lien via a complaint).

As to whether the fees will be paid to pass clean title... foreclosures are different in that they get to pass title free and clear of all liens, in many cases. (Of course, foreclosures work differently in different States, but with what you just wrote, that means a first lienholder could never foreclose without paying the second lienholder.) Yes, taxes and other things must be paid. Whether the HOA dues/fees enjoy superpriority status as well as a statutory lien status... I can't answer.

Generally, the bank will want clear title and pay everything that is statutory (taxes, HOA/Condo Association dues/fees). However, in Florida, the statute does make the owner/debtor liable for any of the HOA/CA fees/dues that happened after discharge and before sale... except that the bank is liable for 12 months of it.

You may be lucky... the bank pays it all... and you never hear about it again. That's usually the case.

[idainc]

[idainc]

Generally, the bank will want clear title and pay everything that is statutory (taxes, HOA/Condo Association dues/fees). However, in Florida, the statute does make the owner/debtor liable for any of the HOA/CA fees/dues that happened after discharge and before sale... except that the bank is liable for 12 months of it.

You may be lucky... the bank pays it all... and you never hear about it again. That's usually the case.

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I've done alot of research and can't seem to come up with any trends on this either by state or servicer. Any thoughts ?