Being sued for association dues

[danteLibra]

11/24/10 -- my chap 7 discharge was ordered, however...

back on 9/13/10 the bankruptcy court vacated the "automatic stay" from my chap7 petition, allowing the condo association to commence/continue collection proceedings on assessment charges, late fees etc. Sooo....

Today I got papers in mail...assoc is suing for 2241.
Demand amt: 2202
Filing fee: 32.
Srvc fee: 7
Atty's fees: 0.
Tot: 2241

Background:
bought a single-family house in fall' 07. Moved out of a newer nj river-condo same week.

Tried like HELL to sell it. Lowered price, etc. Tried 3 realtors! had NO idea what was about to happen in housing market...we all found out the hard way I guess...

Paid ALL fees the entire year that condo sat on the market (mortgage, assoc fee of $110/mo, utils, prop taxes, etc). I just could NOT believe another 30 days could go by w/out a sale...I'm a slow learner...

In fall of '08, after 1 full year on market we realized we HAD to rent it or walk-away/foreclose. Renters were a nightmare...slipped out in middle of the night, late summer '09...behind on rent & with damage to unit...

Fixed damage & put it on market again. Carried it (again) out of pocket 'till early 2010 then filed for chap 7 & embarked on soliciting a short-sale.

chap 7 took a while because I have a security clearance & also needed paperwork to show my 401K was Erisa certified. Harder to get in actual writing than u can imagine.

The WORST part is the bank ONLY wants $138K for this condo!! It is beautiful...right by the river & even Zillow.com rates it well over $150k!

I honestly thought it would sell by now & the lender would pay the $$$ due the assoc as part of the short-sale agreement (to gain a clean title).

Now since it hasn't been sold, the assoc has lost it's patience & is now coming after me apparently.

The weather JUST got nice again & I'm hoping an offer will happen. Since being ion the market we've had no less than 4 offers...ALL backed-out after the 3-day. I just don't know what's happening in this market....

Anyway...advice please!

I NEVER saw the words "You are being SUED" on anything before...am in a panic. Reached out to my chap7 atty & realtor who's pretty well-versed in stuff like this. All he does are short-sales & most of his clients have these types of issues.

I really think it will sell this time...the $138K is the COUNTER-offer from the lender! That is REALLY good news because now we know what to ask for the place & there won't be 6mos waiting to hear if the offer is approved. Man the timing sux!

Sorry for the book, but the devil is in the details, so they say....

[btbeme]

Guess what? In almost every case, association fees are the responsibility of the person on the deed. Now, sometimes association fees that are included in a Ch 7 can be discharged, but any new fees will be the responsibility of the person on the deed. And, if the suit has actually been filed, you run the risk of any judgement being placed as a lien on the property - that lien would have to be satisfied before the sale could be completed.

Is is possible for the back fees, lien, or any other item to get paid off by the purchaser (or even the broker) as part of the deal, but...

The speedy way to get of the deed is to file a Quit Claim. That process can also have some negative side effects. I think you are better off at this point staying with the sale and trying to satisfy the suit as part of the sales price - to be split evenly between the buyer, the broker(s) and yourself perhaps.

[danteLibra]

These forums rock. It's just nice to hear I'm not completely doing the wrong thing, u know?

Who knows maybe I'll get lucky & this place will sell soon.

I got a return call from my chap7 atty today...he kind of echoed your response. If you're not a lawyer u missed your calling ; - )

He said I'm liable for everything since the July/2010 filing date, but that adds up to ~$900 (monthly assoc fee is ~$110).Not sure where they're getting $2400.

I truly cannot understand what the Relief from the stay bought the association? Seems like a waste of a filing fee since they could just go after me after the discharge anyway.

I keep asking what else can I do (besides finding $2200 somewhere). I made a great craigslist ad w/ links to slide-show, googlemaps, realtor's webpage, etc. Seems to attract a lot of traffic to the condo...I'm assuming these people are pre-qualified (most realtors won't waster their time otherwise) but it's still unsold.

I know there is a buyer's market but are they waiting for a buyer's utopia? Buy 1 condo get 1 free?

Thanks for taking the time to respond. It means a lot!!

[mjengineer]

Dante,

I was in the same situation, but with three different properties at the same time. From what you are saying it sounds to me like you "reaffirmed" the mortgage when you filed? The association is getting $2400 from the cost to sue you, so a good $1200 of that total is legal fees, title search, interest, and a few other fees associated with those letters. I have gotten no less than 20 of those in the past two years, so I am familiar with them. I am not sure why you kept the condo when you filed for bankruptcy it was the perfect time to let it go with this uncertain market. I went through all the same things you did, bad renters, several evictions, damage to the unit that had to be fixed, and my bank account being sapped by the vampire of a property.

The relief from the stay bought the association a lot, they can now proceed to foreclose on the property and enforce their lien against it. If they foreclose either you will pay them or the bank will pay them because the bank has more to gain out of the situation, and if your sale goes through they have to approve any sort of short sale deal to make sure they get their cut. A Quit Claim deed is a risk because most lenders have a policy that any deed changes will cause an immediate call for the full balance due on the note. I gave up all my properties in my bankruptcy so I could get out from under them I had four failed short sales, and got tired of the time it took to get them approved. The association generally gets the "full" amount they ask for when the short sale is completed, so they can be a real bear and mess up or delay short sale deals.

Have you contacted the attorney for the association and told them you are doing a short sale and have no money, and what do they need to expedite the short sale when an offer comes in? You don't want that to hold up everything if you get one approved, buyers are weary of short sales because they take forever. Good luck though, it's dealing with these issues that drove me to file. Banks don't have a clue.

[danteLibra]

I wrote a reply but it won't post...keeps saying 1. An error has occurred. You must have 15 posts in order to post links. Your current post count is 2.

I'm not trying to post any links?