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Can an Association Collect Assessments Once a Homeowner Files Chapter 13 Bankruptcy?

This question comes up a lot from our association clients, who are often unsure about how to proceed, for fear of violating the automatic stay. Many associations know they should refrain from seeking collection efforts against homeowners for outstanding pre-petition

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Florida Appellate Court Bolsters Statutory HOA Safe Harbor

A significant opinion from the Florida Third District Court of Appeal further clarifies the extent of the Florida statutory homeowners association (HOA) “safe harbor.” In the end, entities that obtain title through judicial foreclosures are left satisfied while homeowners associations

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Association Required to Provide Names and Addresses of Delinquent Owners

The Kansas Court of Appeals held that Kansas law requires a homeowners association to disclose the names and addresses of delinquent homeowners. Although this case was decided in Kansas, it could be an indication of how a Washington court might

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Encouraging Lenders to Foreclose: Don’t let your Condominium and HOA units sit vacant without collecting assessments

Even though the real estate market is gradually improving, condominium and homeowner communities are still faced with instances where a delinquent member abandons their unit/home and stops mortgage payments, but the lender does not foreclose. While condominium associations often believe

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Reading the Nevada Tea Leaves after Shadow Wood

In the wake of SFR Investments Pool 1, LLC v. U.S. Bank, N.A., in which the Nevada Supreme Court held that an HOA foreclosure sale may extinguish a first position deed of trust, lenders have advanced numerous arguments as to

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Liquidated damages provisions: enforceable or a penalty? (IN)

Liquidated damages provisions are common in real estate and construction contracts. When litigating the enforceability of liquidated damages provisions, the issue is almost always whether the provision is in reality an unenforceable penalty.   Read the article………..

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MA Supreme Judicial Court lets condo board establish multiple liens

When the defendant owners of a condominium unit withheld payment of their monthly common expenses because of a parking dispute, the plaintiff organization of unit owners could establish multiple contemporaneous priority liens — each superior to the first mortgage on

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Need Help for Bank “Zombie Foreclosures” in Homeowner & Condominium Associations?

A huge problem for HOA and condo associations over the past 5 years has been “zombie foreclosures.” That’s where a bank starts the foreclosure process on a property and the owner moves out, but then the bank doesn’t complete the

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A Co-owner Filed Bankruptcy, What Now?

Condominium associations are solely dependent upon the collection of assessments from its members for their survival and to purchase and provide the goods and services necessary for the maintenance of the project for the benefit of its members. Thus, when

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AZ Appeals Court Rules in Favor of HOA

An appeals court in the Grand Canyon State has ruled that home owners associations can redeem a residential property even though it has already been through a foreclosure sale.  Read the article…………

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How Mortgage Servicers Can Prevent Liens From Cutting into Investor Profits

For some time there have been questions surrounding how servicers can protect the lien rights of their investors with regard to the lien position of Homeowner Association properties, but there are ways to avoid this conflict.   Read the article……………

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NJ Federal Court Says Condo Association Lien May Have Priority in Chapter 13 Bankruptcy Plan

The issue in dispute was whether a condominium lien, which is recorded and served on the owner and mortgagees, is a fully secured claim under bankruptcy law, or a partially secured claim which may be “stripped off” in a bankruptcy

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In the ‘Shadow Wood’ of SFR: Nevada Supreme Court Weighs in on Lender HOA Challenges

In a September 2014 ruling, the Nevada Supreme Court jolted the lending community by holding that a homeowners association’s (HOA) non-judicial foreclosure sale can extinguish a mortgage lender’s previously-recorded first deed of trust on a property if that foreclosure is

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Condo Lien Has Priority in Ch. 13; Can’t Be Stripped Off (NJ)

A condominium association’s lien for unpaid assessments is partially secured, and cannot be stripped off in a Chapter 13 bankruptcy proceeding, a district court in New Jersey held Feb. 17.     Read the article………….

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How Community Associations Can Collect on Judgments by Rent Levy (NJ)

Once association counsel obtains a personal Judgment against the unit owner for failure to pay maintenance fees, late fees, attorneys’ fees and costs, and other charges, we look for ways to collect on the Judgment. If delinquent unit owner rents

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There’s a Sucker Born Every Minute-Just Make Sure Your Association Isn’t One of Them

P.T. Barnum is widely quoted as having said that “there’s a sucker born every minute” and that was well before the Great American Recession which resulted in countless community associations assigned their bad debt over to creative collection companies or

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Strip Tease: A Debtor Cannot “Strip Off” or “Cram-Down” a Condominium Lien as Part of a Chapter 13 Bankruptcy Action

The District Court recently delivered a rare win for condominium associations throughout New Jersey dealing with bankruptcy actions filed by their residents. The Court reversed a 2015 decision that allowed debtors filing Chapter 13 bankruptcy petitions to “strip off” or

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Rhode Island Supreme Court gives HOAs priority above mortgage liens

The Supreme Court of Rhode Island supports the homeowner’s association “super priority” concept, making The Ocean State part of a growing list of states that are, in some fashion, ruling in favor of making HOA liens a priority above mortgage

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Bankruptcy of Owners and Effective Association Assessment Collections

Collection issues are particularly challenging to owner associations when an owner files for bankruptcy.  Owners can file 3 different ways for bankruptcy under federal law   Read the article……………

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Appellate Ruling Illustrates Importance of Proper Service of Process and Procedural Steps in Foreclosure Cases (FL)

Associations have been counseled for the last several years to move quickly to foreclose on units in cases of prolonged lender foreclosures so that they could utilize these residences to reap rental income while the bank cases languish.    Read

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What amending your governing documents can do to save your association money

Over the last several years, homeowner’s associations and condominium associations across Florida have taken serious losses and written off large amounts of bad debt due to the housing market crash and the flood of mortgage foreclosures following in its wake.

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Florida Lenders Not Required to Compete with Homeowner Associations to Foreclose Where Lender’s Lis Pendens is Recorded First

It is not uncommon for a homeowner association (“HOA”) to file a separate claim of lien foreclosure action against a resident even though the bank’s mortgage foreclosure action remains pending. Therefore, a homeowner can potentially face two foreclosure actions against

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Recent case clarifies foreclosures and assessments (IL)

Q. Can you discuss the 1010 Lake Shore Association v. Deutsche Bank National Trust case, and its impact on assessment collections?    Read the Q&A………..

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Action 9 helps local family get their home back after HOA foreclosure

he Port Orange family who called Action 9 after their home was sold at an HOA foreclosure auction won’t be kicked out after all.  They lost their home after failing to pay just $1,900 in association fees.  The couple’s attorney

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Nevada Supreme Court Opinion Impacts HOA Foreclosure Litigation

The Nevada Supreme Court held in SFR Investments Pool 1, LLC. v. U.S. Bank, N.A. that a non-judicial foreclosure by an HOA generally extinguishes a first mortgage interest, however, it left several unresolved issues.   Read the article………….

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How Community Associations Can Collect on Judgments by Levying Bank Accounts

Once association counsel obtains a personal Judgment against a unit owner for failure to pay maintenance fees, late fees, attorneys’ fees and costs, and other charges, we look for ways to collect on the Judgment. One method of collecting on

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Counsel’s Corner: HOA Super-Priority Lien Issue Not as Clear After Court Opinion

In a nutshell, what clarity did the most recent opinion by the Nevada Supreme Court provide for the pending litigation around HOA super priority liens?   Read the article…………

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Re-Recording Judgment Liens: The Importance of Timing

One of the most common misconceptions of non-lawyers regarding the practice of law is that a civil case ends upon conclusion of a trial and that, if a party is victorious at trial, he automatically obtains or is provided with

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New HOA Decision by Nevada Supreme Court Indicates Continued Litigation to Save First Liens

On January 28, 2016, the Nevada Supreme Court issued another HOA-related opinion that could have provided much needed clarity to the pending litigation, especially with respect to the issue of what charges constitute the HOA’s “assessment lien” under Nevada law.

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Court Where Lis Pendens Filed Obtains Exclusive Jurisdiction Over All Liens Until Judgment (FL)

In Jallali v. Knightsbridge Village Homeowners Association, Inc. (4D15-2036), the Fourth District again held that the court where a mortgagee files a lis pendens obtains exclusive jurisdiction over all liens on the property until final judgment. Therefore, the judgment entered

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Rhode Island Supreme Court Rules That Condominium Assessment Liens Could Extinguish First-Priority Mortgages

First mortgage holders in Rhode Island beware: in a 4-1 decision handed down on December 4, 2015, the Rhode Island Supreme Court has ruled that pursuant to the Rhode Island Condominium Act, RIGL § 34-36.1-1.01 et seq., liens for six

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Judge sides with Waterlefe MPOA (FL)

Judge John Lakin decided six households in The Shores, a private gated community within Waterlefe, owe the MPOA more than $111,000 in past-due assessments collectively, as well as reasonable attorney’s fees and costs.    Read the article………..

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Pudlit Revisited: Caution is Recommended for All, Including Condominium Associations

As previously reported in Legal Morsels in June 2015, (at http://www.kbrlegal.com/appellate-court-ruling-on-claims-of-third-party-purchasers-at-lender-foreclosures-likely-harmful-to-homeowner-associations/) a recent decision of the Fourth District Court of Appeals entitled Pudlit 2 Joint Venture, LLP v. Westwood Gardens Homeowners Association, Inc., has made the collection of assessments a

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Ruling Reminds Associations to Look to Their Governing Documents in Foreclosure Cases

In Florida, not all foreclosure cases are the same for the state’s more than 47,000 community associations, as a recent ruling by the Fourth District Court of Appeal illustrated. The ruling serves as a reminder that community associations must look

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HOA attorney fees a homeowner’s nightmare (FL)

The past few years haven’t been easy for 61-year-old Joe Mosby. He says finances became tight after he was diagnosed with leukemia. Soon after that, he lost the job he’d held for 18 years.  “For a long time, I was

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Appellate Court Rules In Favor Of Association To Recover Unpaid Assessments From Third-Party Purchaser (IL)

To the benefit of Associations who are hit hard by the foreclosure crisis, the First District Appellate Court recently held that third-party purchasers cannot circumvent payment up to six months of the prior owner’s assessments if the lender uses a

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Oral Arguments re: Massachusetts Priority Lien

On January 7, 2015, Thomas O. Moriarty of Marcus, Errico, Emmer & Brooks, P.C. argued before the Massachusetts Supreme Judicial Court in the case of Drummer Boy Homes v Britton. At issue on the case is the vitality and extent

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Are Management Companies Debt Collectors?

A federal court in Indiana recently ruled that a management company is not a debt collector subject to the Federal Fair Debt Collection Practices Act (FDCPA or “the act”) if the owner is not delinquent when the management company is

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When it’s condo board v. delinquent owner: The legal options for both sides (DC)

If you’re a member of a condo board and an owner falls behind on his association fees, what legal options do you have?  On the other hand, if you’re the owner, what recourse do you have if the board opts

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Lawsuits attack business model of Tampa’s LM Funding

Tampa-based LM Funding America is off to a rocky start as a publicly traded company.  The firm — which buys the rights to collect delinquent homeowners association dues — is under attack in two lawsuits accusing it of illegal practices.

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Nevada State Court Ruling on Application of HERA to HOA Foreclosure Sales Holds Promise for Lenders and GSEs

The first Nevada state court ruling on the federal Housing and Economic Recovery Act (HERA) holds that a deed of trust owned by a GSE cannot be extinguished by a homeowners’ association’s (HOA) foreclosure sale, a promising development for Fannie

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FHFA Attacks Condominium Limited Priority Lien

The condominium “superlien” is under attack. That doesn’t overstate at all the concerted efforts now under way to revoke a measure that has been working well in many states for more than two decades. Nor does it exaggerate the potential

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Denying Access: Consequences for Arrears and Non-Payment

The synopsis for the 2013 horror film The Purge is pretty extreme: in the future, society implements a 12-hour period called “the purge,” wherein any and all crime is legalized. Always wanted to vandalize your boss’s car? Thinking about shoplifting

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Thousands of Poinciana (FL) residents face ballooning debt after HOA fees sent to collection agencies

But now the HOA is under fire for what residents say is a persistent and ongoing effort by outsourced debt-collection agencies to inflate back dues with thousands of additional dollars in legal fees and late charges.   Read the article…………

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Florida Court Rules in Favor of Mortgagee in HOA Lien Priority Dispute

On December 2, a Florida court of appeals issued a decision reinforcing and clarifying the state’s lien priority law. U.S. Bank Nat’l Ass’n v. Grant, No. 4D14-979 (Fla. Dist. Ct. App., Dec. 2). At issue in the case was whether

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Counsel’s Corner: Ruling Puts Lenders on the Hook for Unpaid Assessments (IL)

The Illinois Supreme Court created potentially hazardous territory for lenders who take title to condominium property via foreclosure lawsuits. In 1010 Lake Shore Drive Ass’n v. Deutsche Bank Nat’l Trust Co., the Supreme Court held that liens for unpaid condominium

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Whose Lien Has Priority — The Secured Lender (Mortgagee) or Homeowner Association? The Answer Is “It Depends”

Every state has a law regarding recording of liens, and recording statutes typically fall within one of three categories: (i) a race statute (e.g., the first to record the lien has priority); (ii) notice (e.g., these statutes typically protect a

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When the homeowners association is on the hook

I’ll be honest. Most of the time I am advising homeowners on how to protect themselves from their HOA. But when I sat down with Marshall Goldstein in a beautiful development in Florida, I found myself on the other side

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Paying first assessment extinguishes any unpaid of foreclosed condo unit, state court rules (IL)

A foreclosure does not necessarily erase unpaid condominium association assessments, the Illinois Supreme Court has ruled, but all a new owner has to do is start paying new assessments on the unit.   Read the article……….

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Association’s Right To Recover Assessments Clarified (IL)

Recently, Illinois Courts have handed down opinions that provide valuable insight for condominium associations that seek to recover unpaid assessments when banks foreclose on mortgages. Below are brief synopses of each.   Read the article…………

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