30 Day HOA Notice

[LadyInTheRed]

I do understand that an HOA lien will survive a bankruptcy. However, who will pay it? Doesn't the entity who buys the property at a foreclosure auction become responsible?

The lien stays with the property until it is paid off, either at the time of foreclosure or later. If the home is no longer in your name and the HOA fees are all discharged in BK, the lien and the discharged fees that lead to the lien are not your problem.

[bcohen]

The lien stays with the property until it is paid off, either at the time of foreclosure or later. If the home is no longer in your name and the HOA fees are all discharged in BK, the lien and the discharged fees the lead to the lien are not your problem.

Remember that the mortgage lender's lien is superior to any liens which a HOA might place on the property. Therefore, if the mortgage lender forecloses, then unless the sale nets more money than the mortgage balance--which isn't going to happen, the HOA lien is not paid. It is simply extinguished, and the HOA gets nothing, and the new owner receives clear title.

[justbroke]

Remember that the mortgage lender's lien is superior to any liens which a HOA might place on the property. Therefore, if the mortgage lender forecloses, then unless the sale nets more money than the mortgage balance--which isn't going to happen, the HOA lien is not paid. It is simply extinguished, and the HOA gets nothing, and the new owner receives clear title.

This is not the case in Florida. First, Florida granted super-lien status to Associations where the mortgage was recorded after 2008 (I believe). However, "most" Associations subordinate their super-lien to a mortgagee of first record through the CC&Rs. There are Associations that have had their pre-petition arrears discharged and any pre-petition lien extinguished in both Chapter 7 and Chapter 13 cases, in Florida. (Fun stuff!) Others have fought saying that their lien was superior and that the special exception, that a foreclosure still allows them to collect from the new owner, supersedes Lien Theory in Florida. They have lost in both Chapter 7 and Chapter 13 cases here. Again, it's pretty fun stuff and I never knew that you could actually lien strip the Association's lien (and pre-petition arrears) just like any other junior mortgage. The key is whether the CC&Rs subordinate the otherwise superior "super" lien.

The HOA's statutory lien is special and in F.S. 720, the HOAs get paid no matter what, unless the HOA itself purchases at the foreclosure. This is probably why HOAs do not bid when it is a foreclosure hearing in Florida. The HOA, by bidding and winning at the HOA foreclosure, would end up with a parcel upon which they cannot collect the past due assessments/dues.

See Florida Statues 720.3085. The interplay is of importance in some circumstances. For most people, it does not matter since they would not be liable. Remember, that bankruptcy only extinguishes the personal liability to pay. The lien is not extinguished and Florida law provides certain protections for HOA under 720.3085.

Of course this applies where the Association or the Mortgagee acquires title through foreclosure. In cases where there is a third party that bids and wins at foreclosure, the third party owner is not liable for the assessments prior to holding title. In all cases, title does pass clean (clear and free).

[tobee43]

Remember that the mortgage lender's lien is superior to any liens which a HOA might place on the property. Therefore, if the mortgage lender forecloses, then unless the sale nets more money than the mortgage balance--which isn't going to happen, the HOA lien is not paid. It is simply extinguished, and the HOA gets nothing, and the new owner receives clear title.

bcohen i totally and absolutely disagree with you on this. the title is NOT clear at all until the HOA liens are paid by the "new" owners. it is not simply extinguished. while the hoa's here in florida most certainly get what they ask. in az it may be different, not here. we can continue to go after the new owner because it was their responsibility. we remove privileges, calculate daily late fees, and interest and penalties until their liens are paid with us.

we have many large property companies down here in florida buying up as much as they can. we make certain they are not allowed a rental CO, thereby cannot rent or utilize the property in any way until the lien is paid. again, we don't go after the old owners if they filed bk. although we file the liens on some personally if they are still living in the homes. it doesn't matter about the mortgage or what the new owner paid, don't care, i just after the lien and let it start adding costs up the kazoo. why??????? because, just as example this late company was a company worth over 3 billion dollars buying up in NV, AZ and FL, renting the properties and thinking they don't have to pay a dime. they soon learn when they are not allowed to use the properties to rent they pay.

again personally, and until i began this form of collection on these liens the hoa's here were going after the poor people who lost their jobs or homes for true and real reasons. however, i had one house that the owner snorted their home away and we are pursuing them directly, they did not file bk.

and, from what i read about TN, it's possible for this also to happen. here in florida 720.3085 it's the hoa's trump card.

[nioka]

From NOLO about Tennessee HOA foreclosure.

COA Super Liens
Under certain circumstances, a COA lien for delinquent assessments may have priority over a lender’s first mortgage or deed of trust. This is called a super lien. In Tennessee, six months worth of delinquent common expense assessments have super lien status (Tenn. Code Ann. § 66-27-415(b)(2)). (Learn more in Nolo’s article Homeowners’ Association Super Liens.)

If you default on the assessments, the COA or HOA can foreclose. A common misconception is that the association cannot foreclose if you are current with your mortgage payments. However, the association’s right to foreclose has nothing to do with whether you are current on your mortgage payments. (Learn more about HOA liens and foreclosure.)


In my circumstance my house is upside down. Six months of delinquent assessments in my HOA amounts to about $600. Interesting that the law in TN, and some other states, allows an HOA to take a home for such a small amount.

Once again, it makes no difference to me who forecloses. For me the sooner the better.

[justbroke]

In my circumstance my house is upside down. Six months of delinquent assessments in my HOA amounts to about $600. Interesting that the law in TN, and some other states, allows an HOA to take a home for such a small amount.

Once again, it makes no difference to me who forecloses. For me the sooner the better.

They actually don't "take" the home for a small amount. In an HOA foreclosure, the home is still subject to any other liens. Even if you owned a manufactured home with a $100/month payment and you missed 3 payments, you could still be in a foreclosure. The amount does not matter. If the home was owned free and clear, you would expect that there would be "investors" that would show up and bid significant amounts (well above what is owed the HOA). The residual proceeds, after the HOA is paid and the fees, would go to the foreclosed owner.

In Florida, the HOA is entitled to 1% of the mortgage or 12 months of HOA dues.

[nioka]

toobee, Nioka plans to wait until after either the bank or the HOA forecloses before filing BK. So, there will no longer be an asset to surrender or post-petition HOA fees. Nioka used the term "surrender" in the context of letting the HOA or bank foreclose instead of making payments.

Nioka, I am glad you started this thread to record the progress of the foreclosures. But, please understand that in a forum like this, people will offer advice whether or not you asked for it. If you don't want the advice, just ignore it and move to the next post. Also, not everybody will have read your other threads and remembered the details of your situation.

Just to prove my point about advice, I'm going to offer some. Wasn't it you whose HOA fees are only $100 a month? That's really cheap rent. If you are anxious to file BK, why not file and continue to live there and pay post-petition HOA fees? It could be years before anyone forecloses. They are sending the notices in hopes that you will pay. That doesn't necessarily mean that they are going to move forward with foreclosure any time soon.

LITR,

Sorry I missed you post.

You are correct. My intention here was to post the events in my bk so that others might have some idea what is in store for them if they decide to file.

I agree that $100 monthly HOA fees are "cheap rent" and I would have no problem paying that post bankruptcy until the bank forecloses.
There are also other considerations such as maxing out my total exemption amount and the max amount of my bank account safe from garnishment from CC companies. I may need to file prior to foreclosure.
My concern is the HOA I am in. This HOA is notorious and I have been cautioned they will be out for blood when I discharge their debt.
One attorney told me not to pay the HOA fees post bankruptcy. He reasoned my income is bullet proof and any attempt to collect on the HOA's part would be useless.

I also agree that this thread is off topic.