Q: An HOA Lien was sold at Auction, the person that purchased it wants us to pay rent or get out in 24 hours. What is the law related to this subject?

The purchaser at the HOA foreclosure, provided the foreclosure was properly performed and after issuance of the certificate of title in their name, should now own the subject property subject to any superior interests, many times the first mortgage. The pending bank foreclosure does not effect this right in relation to your ability to remain in the property.

That being said, the owner is offering  the option of staying in the property at an undisclosed rental amount. This is not something they are required to do but rather something they offering in the alternative to removal from the premises. The time limit is not appropriate however. The appropriate action the purchaser must take is called a writ of possession. Such action occurs within the Court System and culminates with the Sheriff providing you notice and a time frame to vacate.

If you are a tenant rather than the owner pursuant to the qualifications of the Federal Protecting Tenants in Foreclosure Act, additional time is mandated by law.

Q&A: When can a foreclosure sale winner enter the property?

Q:

If the property is vacant, do I have to wait for the certificate of title before I can open the door? After all, I already paid the final amount owed with the wining bid.

A:

In Florida the title transfers upon the filing and issuance of the certificate of title. Despite having paid good and valuable consideration for the unit, you are not the owner until the certificate of title is issued in your name. Also there is a right of redemption period in Florida prior to the issuance of the certificate of title during which the original own can redeem his property.

Q&A Can Condominium’s Evict Owners for Failure to Pay Assessments?

Q:

We live in a condo community in Florida. We have five owners not paying their HOA fees. Can we evict them?

A:

Florida Statute provides that Associations can file a claim of lien for delinquent assessments under Section 718.116 (condos) and 720.3085 (HOAs). The applicable statutes further provide that the claim of lien, if prepared properly, can be foreclosed on in the same manner as a bank holding a mortgage forecloses on the property. (provided certain criteria is first followed)

To remove the owner of a unit or lot after a foreclosure the proper action is obtaining a “writ of possession”. This document, entered by the Court, removes the former owner from the property so that the new owner, as determined by a foreclosure sale, can enter the premises.

The condominium’s Declaration of Condominium may contradict the statute and provide for lesser means of recovery or action than is provided by in the statute. You should consult with an attorney in your area as corporations are not allowed to proceed without an attorney in an Association Foreclosure actions such as this.

Q & A HOA Changing the Locks

Question:

Does the Florida HOA have the right to change the locks on an occupied unit they foreclosed on without informing the tenant?

Answer:

Provided the leasehold is still in effect or was at the time of foreclosure, it is possible the Florida HOA has run afoul of several aspects in the Federal “Protecting Tenants in Foreclosure Act”. This act sets forth the manner in which tenants are treated and dealt with during and after a Florida HOA foreclosure on the property.

The act applies to all residential foreclosures, not just bank foreclosures. One additional consideration is that the lease must be “bona fide”. Bona Fide leases are defenied under the “Act” as one of three types:

(1) the mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant;

(2) the lease or tenancy was the result of an arms-length transaction; and

(3) the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property or the unit’s rent is reduced or subsidized due to a Federal, State, or local subsidy

Firm Founder Robert Todd Publishes Article on Association Assessments

First Published The West Florida Wire Community Association Institute Magazine: March 2011 

 

Association foreclosure due to delinquent assessments

Non-payment of Association Assessments has become a significant burden for many communities. Whether it is a result bank foreclosure, intention or apathy, the situation has affected thousands of communities across the state. There is no vaccine, but there is treatment.

 

At first blush, taking action against a unit owner that is delinquent or worse, in foreclosure, seems counter-intuitive. Why add to the problem? Why throw good money after bad debt? The weight of these questions can seem insurmountable when the initial delinquency occurs. It is only after an Association experiences a protracted bank foreclosure or repeated promises to pay that go unfulfilled, that the importance of early action in a delinquency becomes evident.

 

What follows will be a general analysis of the fictional delinquency of Unit A and the benefits of aggressive action.

 

Unit A has missed its January 2011 assessment and in keeping with the appropriate governing documents and statute, the Association may legally secure a claim of lien against the property. Other than the owner who is months or even year’s delinquent in assessments, why secure a claim of lien against a property that has recently become delinquent? Beyond providing evidence to the world that your Association has an interest in the property, there is now the requirement to satisfy the newly placed encumbrance on the property should the property be transferred or sold. In addition, if Unit A’s owner is still residing in the unit and simply not making payments or the community is beginning to see a trend of delinquent payment, it may be of assistance to indicate the Association’s refusal capitulate in instances of non-payment to the community as a whole.

 

Generally, the majority of Association’s governing documents provide for the ability to foreclose on a claim of lien against a unit. This “nuclear” option provides the Association governing Unit A the option to pursue a fully fledged foreclosure against the unit, ask the Court to sell Unit A on the Court House steps and eventually take title to the unit in order to rent it out or potentially even be paid in full by a third party purchaser.

 

Unfortunately, properties are not always held free and clear of a note to a lending entity. Frequently, properties will have a first, second or maybe even a third mortgage encumbering them. Therefore, it is necessary to review the governing documents to determine what mortgages the Association can wipe out and what mortgages can wipe out the Association. The most common circumstance involves a first mortgage which is superior but that is all. This also creates a unique opportunity to bargain with secondary mortgages as to the preservation of their interest by satisfying the Association’s lien.

 

It is a recurrent misconception that upon taking title to a unit with a first mortgage that an Association needs to begin making payments to the bank in order to avoid becoming personally responsible for the mortgage. This is not the case. Upon taking title to Unit A in the above scenario the Association would be able to rent the Unit while securing only landlord insurance for unforeseeable events. One caveat however, although rare, a bank that is foreclosing may seek to have a receiver appointed to collect the rents paid directly to the Association.

 

Finally, while on the topic of a foreclosing first mortgage, why would an Association ever begin an Association foreclosure when the bank is already foreclosing? The simple answer is time. Time is a commodity banks squander. The foreclosure process has consistently taken banks eight to fourteen months to conclude. Many foreclosures take considerably longer while some are dismissed only to be reinstituted extending the process for years. It is during this time that a timely filed, aggressive Association foreclosure against Unit A would reap the rewards of a lucrative tenant and a non-aggressive Association would continue to accrue unpaid assessments. As you can see, what at the inception of a bank foreclosure did not make financial cents to the Association can become financial dollars when appropriately aggressive.

 

To read more about our firm’s legal services, including Association Foreclosures, please visit Association Assessment Attorneys, P.A. main website.