(1) How does a HOA foreclose if no lien was filed at the time of bank foreclosure summons being issued & HOA is a co-defendant?

Asked 9 months ago - Orlando, FL

(2)...Does the HOA have to issue a summons prior to foreclosure and if not, what other remedies does it have to comply with? (3)...In other words, does the HOA have to 'wait in line' until the foreclosure action is resolved? To date, HOA has not replied to the majority of the many written (and sent certified) questions of dispute. (4)...If a belated lien was recorded for a quarter of the amount claimed, is this the only amount the HOA can claim or sue for?

Additional information

(A)...IF THE HOA FORECLOSES AND THE PROPERTY IS SOLD ON AUCTION, WHAT HAPPENS IF THE MORTGAGEE PREVAILS IN THE CASE AND THEREAFTER SELLS THE PROPERTY TO A SUBSEQUENT BUYER? DOES THE ENTITY THAT BOUGHT IN HOA AUCTION LOSE THE PROPERTY TO THE NEW BUYER OR WHAT OTHER REMEDY DOES THE MORTGAGEE HAVE TO SATISFY ITS FIRST LIEN IN THIS SCENARIO?

THE MORTGAGEE HAS GIVEN NOTICE THAT IT WILL CEASE TO PAY THE PROPERTY TAXES FROM THIS YEAR AND HAS CANCELLED THE FORCED PLACED INSURANCE.

(B)...IF THE MORTGAGEE PURCHASES THE PROPERTY ON THE HOA AUCTION, OBVIOUSLY FOR A MUCH LOWER AMOUNT THAN ITS CLAIM AS A FIRST LIEN HOLDER, WHAT HAPPENS TO THE UNRESOLVED CASE, PART OF WHICH IS ON APPEAL?

(C)... FURTHER IF THE MORTGAGOR PREVAILS IN THE CASE, DOES THE BUYER, INCLUDING THE MORTGAGEE, IN THE HOA AUCTION LOSE THE PROPERTY?

IF SO, TO ME, FLORIDA LAW APPEARS TO BE TOTALLY IRRATIONAL AND CONFUSING!

Attorney answers (3)

  1. Richard Paul Zaretsky

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    Answered . The HOA was included in the foreclosure as a defendant in the bank foreclosure suit. They may cross claim in that suit for a foreclosure of their lien, even if the lien is unrecorded. An association has a right to a lien regardless of whether they have actually filed a lien in the public records. Further, the association is not limited to the amount in a filed lien, but is also due all subsequently due and accrued assessments that remain unpaid.

    Apparently you do have a lien filed by the Association and subsequent amounts due would be included in their ability to foreclosure on that recorded lien.

    The HOA can independently sue on their lien notwithstanding the bank foreclosure and they don't have to wait in line. Indeed, their suit is more likely to get to the action block before the bank's case. The winning buyer at that foreclosure sale on the Association foreclosure will take the property subject to the bank lien (but they don't assume your debt - you are still liable on that).

    I hope you found this response to be helpful. If so, please click on the button "helpful" and/or "best answer" as... more
  2. Barbara Billiot Stage

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    Answered . The HOA is required to provide you with a 45-day Intent to Lien Notice (30 days for condos) before filing the lien and a 45-day Intent to Foreclose Notice (30 days for condos) before filing to foreclose. The HOA can foreclose at any time regardless of what's going on with the bank foreclosure. The HOA can foreclose pretty fast too because they do not have all the issues associated with a mortgage foreclosure. The HOA can also file to foreclose even if you are disputing or validating the debt.

    The HOA can claim up to five years of past due assessments and the lien usually covers all future assessments and fees if it is worded correctly.

    You should enter into a payment plan with the HOA or consider Chapter 13 bankruptcy to modify the mortgage and bring the assessments current.

    I have a blog about this topic that may be helpful. See below.

    This communication is not intended to create an attorney/client relationship. It is always recommended you consult... more
  3. Margery Ellen Golant

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    Answered . Much of your question is too fact-specific to answer in the general way possible on a web site. The HOA does not have to wait in line - if a mortgage foreclosure action is pending, the HOA will normally be joined as a defendant, and can cross claim in the same action for foreclosure. If you have defenses against the HOA resulting from its conduct and relating to disputes, you have every right to raise those as defenses. The HOA is not limited to the amount of its original claim if it forecloses, since the lien continues to accrue.

    Your best course is to consult an attorney who is knowledgable in this area of law to see what options you have. If the mortgage debt exceeds the value of the property, you might be able to strip off and discharge the HOA lien in bankruptcy.

    Please note that the above is not intended as legal advice, it is for educational purposes only. No attorney-... more

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