foreclosures and hoa fees

F

financeguy_IHB

New member
Out of curiosity, once a property is foreclosed and the bank takes over, is the bank responsible for the HOA fees. I know those condos at Marquee Place and Scholarship have HOA fees above $1000, so I'm wondering if a condo there is bank owned then would they need to pay those fees.
 
The owner of the property is responsible for all taxes and fees (including HOA). When a bank takes back a property, it assumes all the the costs of ownership.



The problem for HOA's is that the banks typically do not pay the HOA fees until the property is resold, and then the HOA gets all the back fee's out of the escrow. So if 1/4 of your associations units are REO and just sitting there for a year, your HOA revenue is down 25% and the remainder of the owners are screwed. HOA's can take the bank to small claims court (or muni court) but typically, the legal fee's outweigh the effort and you wait until the property sells to bring the account up to date.



The other problem is the HOA's fee prior to the foreclosure. If an owner isn't making his/her mortgage, their not making their HOA dues either. The bank is not laiable for any fee's prior to the foreclosure and if the owner is BK, the HOA is SOL.
 
The owner of the property (i.e. the bank or hedge fund) is responsible for HOA fees. If they don't pay, then the HOA can file a lean against the property.
 
[quote author="WINEX" date=1233375590]The owner of the property (i.e. the bank or hedge fund) is responsible for HOA fees. If they don't pay, then the HOA can file a lean against the property.</blockquote>


So the HOA files a lean, big deal, you still don't get paid until the Bank resells the property out of the escrow. So you carry the amount on your accounts recievable but still have to pay your expenses which puts a strain on the remaining HOA members.
 
My HOA raised the fees almost $8 a month just to cover people who are not paying.

And the HOA spread the amount due over 3 years.
 
[quote author="alan" date=1233375544]...The bank is not laiable for any fee's prior to the foreclosure...</blockquote>


I see so for properties like the Marquee Place, with its extremely high HOA, it might not be so bad to hold off on foreclusures because otherwise the bank would be responsible for paying those really high fees.
 
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