In late 2009, a Washington condominium association foreclosed on a first position lien for delinquent assessments and purchased the unit at a trustee’s sale for $8,818.17. Deutsche Bank, which had a junior lien on the unit for $240,000 that was extinguished by that foreclosure sale, was notified of the association’s foreclosure but did not respond. […]
FHFA, Fannie and Freddie File Defensive Class Action in Nevada
In an effort to “avoid the cost and burden of piecemeal litigation” of hundreds of cases in the Nevada HOA foreclosure crisis, the Federal Housing Finance Agency (FHFA), Fannie Mae, and Freddie Mac (collectively, “Plaintiffs”) recently filed a putative class action and motion to certify a defensive class, pursuant to Rule 28 (b)(2) and (b)(1)(B), […]
Fla. App. Ct. (3rd DCA) applies ‘after acquired title’ doctrine to save mortgage loan
The Third District Court of Appeal of the State of Florida recently affirmed the entry of summary judgment in favor of a mortgagee and against the purchaser at a condominium association assessment foreclosure sale based on the after-acquired title doctrine. Read the article………….
Do Property Management Companies Need to Comply with Fair Debt Collection Practices Act? (FL)
Questions regarding compliance with the federal Fair Debt Collections Practices Act for the collection of community association assessments by property management companies have been a source of confusion in the industry for decades. Since the ruling in Harris v. Liberty Community Management, Inc., property management companies that fall within the exemption found in §1692a(6)(F)(i) of […]
How to Deal With Coillecting HOA Delinquencies
There are few things more basic to a homeowners association than the fees it takes to keep the place running. When one or more owners default in the payment of fees, the impact is felt by all. And the longer the delinquency, the deeper the cut. It is a situation that many boards dread because […]
Constitutional Clarification for Nevada HOA Super-Priority Foreclosures
Since the Nevada Supreme Court’s infamous decision in SFR Investments Pool 1, LLC v. U.S. Bank, N.A. in September 2014, the mortgage community has continued to fight to save senior deeds of trust from extinguishment due to an HOA’s foreclosure of its super-priority lien. Read the article…………
Fed court in FDCPA and (NC)DCA case may disregard findings of fact made by state foreclosure court
Attorneys representing a homeowners’ association in foreclosure proceedings filed as a result of the homeowner’s failure to pay monthly assessments may not rely on the completed foreclosure proceedings in their motion to dismiss a federal complaint filed by the former homeowner alleging violations of the FDCPA and NCDCA (North Carolina’s version of the federal FDCPA), […]
Associations Exposed By Unpaid Property Taxes (IL)
In recent years, there has been an overall improvement in the real estate climate. However, many condominium owners continue to lose their units due to their failure to pay property taxes, leaving condominium associations exposed. Read the article…………..
Commonwealth Court (PA) vacates trial court order in remanding of condo case
Per a Sept. 18 ruling from the Commonwealth Court of Pennsylvania, a default judgment in excess of $16,000 now has the chance to be opened in its remanding to the Northampton County Court of Common Pleas. The Commonwealth Court overturned a May 2014 decision of the trial court, which denied Kristina A. Nash the opportunity […]
Knee-Jerk Reaction in Foreclosure Case Costs Association $35,000 (FL)
A Tampa condominium association that prevailed in a circuit court ruling awarding it more than $36,000 in past-due assessments from a foreclosing lender was ultimately done in by its own initial pleadings stating that it was entitled only to a capped amount in accordance with Florida law and its own declaration. Read the article…………..
This Florida Supreme Court Ruling is a Setback for Mortgage Lenders in Foreclosure Cases
In a setback for mortgage lenders, the Florida Supreme Court Thursday ruled the Bank of New York Mellon Corp. waited too long to try to vacate an adverse judgment in a foreclosure case. The case pitted BNY Mellon against Condominium Association of La Mer Estates Inc., which won a default judgment on a complaint to […]
Planning and Enforcing a Successful Collections Policy
As economic conditions struggle to improve, many community associations (“Associations”) face the continuing challenge of chasing payment from a number of delinquent members. In light of these present conditions, formulating and sticking to a sound collections policy can be important. Read the article………….
Post-Bankruptcy Condominium and Planned Community Assessments: Are They Discharged?
Condominiums and planned communities in North Carolina are created by recording a Declaration in the county or counties where the condominium or planned community is located. A recorded Declaration imposes certain obligations on the part of owners, typically including the duty to pay dues and assessments (“Assessments”) to a property owners association (“POA”) for the […]
Florida court rejects mortgagee’s attempt to limit liability for HOA dues after foreclosure
The Florida Second District Court of Appeal recently reversed a trial court’s order in a mortgage foreclosure action limiting the liability of a loan servicer who acquired title by foreclosure for past-due condominium assessments, holding that the trial court lacked subject matter jurisdiction because the specific issue of assessments was not litigated or adjudicated by […]
Wave of Appellate Opinions on Association Assessments Owed by Foreclosing Lenders Create Roadmap for Practitioners (FL)
In July, the Fifth District Court of Appeal issued an opinion in Central Park A Metrowest Condominium Assoc., Inc. v. Amtrust REO I finding that the trial court lacked jurisdiction to decide a post-judgment issue – namely the amount of assessments owed by the foreclosing lender for the prior owner’s past-due condominium assessments. Read the […]
Ensure Your Residents Pay Their Dues with Credit Reporting (NC)
“Dues are an important part of living in an HOA because the money is used to keep the HOA funded. However, many homeowners fall behind on their dues and need a powerful reminder. Credit reporting is a great way to get your residents to pay their late dues. Read the article……….
The Bankruptcy Roadblock: How to Protect Your Association
The situation is all too common: The Association has a delinquent owner that owes several thousand dollars in past-due assessments and other fees. The Board took every step it needed to by following its collections policy, placing a lien on the property, and filing foreclosure. As the long foreclosure process comes to a close, the […]
Courts, States Continue to Wrestle with Homeowners Association Assessment Liens
The circumstances under which a condominium or homeowners association (HOA) lien for unpaid assessments may wipe out a lender’s mortgage lien continues to evolve across the country. As noted in our previous alerts regarding assessment lien priority cases in Nevada and Washington, D.C., the relative priority of these assessment liens, vis-à-vis mortgage liens, continues to […]
How Nevada SB 306 and Court Rulings Have Changed the Foreclosure Landscape
SB 306 contained a number of important revisions to Nevada’s super-priority lien statute that will provide protection to first lien holders for any HOA lien foreclosure sale noticed for sale after October 1, 2015. Chief among the revisions, the new revised super-priority statute requires an HOA or its agent to provide specific notice of the […]
West Virginia Homeowners Associations Found to be Debt Collectors
In West Virginia, homeowners associations (HOAs) now need to worry about how they go about collecting delinquent fees. If HOA debt collection efforts do not comply with the West Virginia Consumer Credit and Protection Act (the WVCCPA), an HOA could face a civil suit and steep penalties. The Supreme Court of Appeals in West Virginia […]
U.S. Supreme Court ruling preserving second mortgages in Chap. 7 bankruptcies exposes flaw in bankruptcy code for community associations
The recent decision by the U.S. Supreme Court in the case of Bank of America v. Caulkett represents an important win for mortgage lenders as well as community associations. The court ruled that homeowners who are underwater on their first mortgage cannot void second mortgages by filing for Chapter 7 bankruptcy, and the ruling also […]
Nevada HOA foreclosures cannot extinguish deeds of trust held by Fannie Mae, holds U.S. district court
Yesterday, the U.S. District Court for the District of Nevada issued an important ruling concerning the litigation over whether homeowners’ association foreclosures under Nevada’s super-priority lien statute (NRS 116.3116) can extinguish first deeds of trust when the underlying indebtedness is owned by a Government-Sponsored Enterprise (GSE) like Federal National Mortgage Association (Fannie Mae) or Federal […]
New Jersey bankruptcy court issues ruling regarding condominium association liens in Chapter 13 proceedings
On June 11, 2015, the United States Bankruptcy Court for the District of New Jersey recognized that a condominium association’s lien is entitled to a limited six-month priority over a first mortgage. Read the article………..
Florida Courts Leave Associations Out in the Cold
Once again, the Florida appellate courts have left community associations out in the cold. Homeowners’ associations cannot rely on their remedies under Florida statutes in bank foreclosure cases if the statutes are in conflict with the governing documents, so said the Fourth District Court of Appeal in Pudlit 2 Joint Venture, LLP v. Westwood Gardens […]
Rule violation may prove costly for St. John (IN) neighborhood (HOA)
A St. John homeowners association that failed to follow its own rules in seeking to punish a property-use violation may be forced to pay thousands of dollars in damages and attorney fees. The Indiana Court of Appeals last week ruled 3-0 that the Hunter’s Run Homeowners Association slandered the property title of Michael and Doreen […]
Recovering Condominium and Homeowners Association Fees Due Prior to Sheriff’s Sale
Under Pennsylvania statute, when real estate subject to homeowner’s association assessments or condominium association assessments is sold at sheriff’s sale, the homeowner’s association or condominium association is entitled to recover delinquent assessments/charges accruing in the six (6) months prior to the sheriff’s sale. All other assessments/charges accruing prior to the sheriff’s sale are ordinarily divested […]
Collection strategies for community associations often needed in today’s real estate market
Despite the rebound of the real estate market and the slowdown in the filing of new foreclosure cases, community associations across Florida continue to face problems with collections. Delinquent payments and the resulting foreclosures are likely to remain an issue for the foreseeable future. Read the article………..
Assessment Collections in the Wake of the Huntington Case (CA)
Collecting assessments has never been an easy job. There are pitfalls lurking around every corner and innumerable requirements waiting to be missed. To ensure a clean foreclosure process, extreme diligence and care must be taken. In the wake of the Huntington Continental Townhouse Association, Inc. v. Miner case, this job just got tougher. […]
Nevada court decisions on HOA foreclosure crisis muddy the waters
Since September 2014, the lending industry has been scrambling to understand and reconcile the Nevada Supreme Court decision in SFR Investments Pool 1, LLC v. U.S. Bank, N.A., a decision that could potentially wash away billions of dollars of first lien interests across the state. However, recent decisions from the state and federal courts in […]
Why Community Associations Cannot Afford to Ignore Lender Foreclosure Actions: Part V
This fifth and final post in the series explains when an association should initiate its own foreclosure action depending upon the status of the lender’s action. Read the article………..
Gavel hangs over housing market (NV)
The Las Vegas housing market is being hobbled by legal wrangling and disagreements over homeowners association foreclosure proceedings that have resulted in thousands of homes sitting empty and untouchable in legal limbo. “It’s a huge issue in Nevada right now,” said attorney Jacob Hafter, the principal of Hafterlaw in Las Vegas. “There are thousands of […]
How FHFA Impacts Your HOA
One of the great things about an HOA is that it is a community. However, because of that, everyone must play their part. So what happens when someone fails to do their part and even fhfaabandons their home? HOAs came up with a solution to recoup that lost money quickly. However, it seems the Federal […]
Appellate Court Upholds Requirement that Condominium Associations Must Offer Alternate Dispute Resolution for Collection of Delinquent Assessments
In an unpublished Appellate Court decision – The Glens at Pompton Plains Condo. Ass’n, Inc. v. Van Kleeff – the New Jersey Appellate Division made it abundantly clear that condominium associations must offer alternative dispute resolution (“ADR”) for any “housing-related dispute,” including the non-payment of assessments/maintenance fees, prior to filing any non-emergent legal action against […]
Dealing With Delinquencies: Make Sure Your Association Has a Collection Policy
A homeowner association depends on the regular income from assessments to pay for services, amenities and common maintenance expenses. Without the timely collection of assessments from homeowners, the association simply cannot function properly. Unfortunately, most community associations at one time or another have to deal with homeowners who default on their assessments. Having a clearly […]
Nevada Supreme Court holds that Voluntary Payment Doctrine Prohibits a Party from Recovering Amounts Wrongly Paid to Homeowner’s Association in Order to Prevent Foreclosure
In Nevada Association Services, Inc., v. The Eighth Judicial District Court, 130 Nev. Adv. Op. 94 (Dec. 4, 2014) (“NAS”), the purchaser of several properties at foreclosure sales did exactly what the Nevada Supreme Court suggested in SFR: it determined the amount of the superprioirty owed the HOA, it paid the full amount demanded by […]
WV Homeowners’ Associations Held Subject to Consumer Credit Protection Act
In a recent case argued by Martin & Seibert, L.C., the West Virginia Supreme Court of Appeals examined the ability of a West Virginia Limited Expense Planned Community to assert a common law lien on real property for unpaid association assessments, and the issue of whether an association’s attempts to collect delinquent assessments is governed […]
Can First Deeds of Trust Survive an HOA Foreclosure in Wake of the SFR Investments Decision (NV)?
In September 2014, the Nevada Supreme Court, in SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. Sep. 18, 2014), held that a portion of a homeowners’ association lien for delinquent assessments has true super-priority status over a first deed of trust, meaning that the foreclosure of that lien could extinguish […]
HOAs May Not Reject Partial Payments on Assessment Liens in Order to Prosecute Foreclosure
The recent case of “Huntington v. Miller” confirmed again that a HOAs must accept partial payments and are limited in their ability to foreclose on an assessment lien when such lien is for less than $1,800.00. Read the article………
Why Community Associations Cannot Afford to Ignore Lender Foreclosure Actions: Part IV
This blog post is part IV in a series of posts discussing why community associations cannot afford to ignore lender foreclosure actions. The underlying theme of this series is that associations have a financial interest and lien rights in their properties and by ignoring lender foreclosure actions, associations are ignoring their own financial interests and […]
Why Community Associations Cannot Afford to Ignore Lender Foreclosure Actions: Part III
This blog post is part III in a series of posts discussing why community associations cannot afford to ignore lender foreclosure actions. The underlying theme of this series is that associations have a financial interest and lien rights in their properties and by ignoring lender foreclosure actions, associations are ignoring their own financial interests and […]
Why Community Associations Cannot Afford to Ignore Lender Foreclosure Actions – Part II
This blog post is part II in a series of posts discussing why community associations cannot afford to ignore lender foreclosure actions. The underlying theme of this series is that associations have a financial interest and lien rights in their properties and by ignoring lender foreclosure actions, associations are ignoring their own financial interests and […]
The Hidden Impact of HOA Delinquencies
Homeowners association claims pose serious threats to servicers and investors. The number of associations in the U.S. is estimated to be between 300,000 and 350,000 and more than 80% of new construction homes are part of an HOA. Read more…….
Why Community Associations Cannot Afford to Ignore Lender Foreclosure Actions – Part I
It happens all the time—an association gets served with a lender foreclosure action and the papers get set aside, never given a second thought. It is hard to fathom a more costly approach to association management that, in the long run, produces a greater negative impact to the association’s budget. Read more………..
Condominium Association Assessments in Mortgage Foreclosure Cases
Recently, in Montreaux at Deerwood Lake Condominium Ass’n, Inc. v. Citibank, N.A., _ So. 3d _, 2014 WL 7183213 (Fla. 1st DCA Dec. 18, 2014), Florida’s First District Court of Appeal followed the Third District in Central Mortg. Co. v. Callahan, _ So. 3d _, 2014 WL 3455485 (Fla. 3d DCA July 16, 2014), in […]
Illinois Supreme Court Agrees to Decide Whether a Condo Foreclosure Extinguishes Association’s Lien
In the closing days of its January term, the Illinois Supreme Court agreed to decide an issue of considerable potential importance to the real estate bar – when does a foreclosure sale on a condominium unit extinguish the Association’s lien for assessments incurred before the sale closed? In 1010 Lake Shore Association v. Deutsche Bank […]
Stripping Community Association Liens in Bankruptcy: Is Your Community at Risk?
As the housing market continues to slowly recover from the foreclosure crisis in Michigan, and other areas of the country, many community associations are still facing significant challenges with unit owners who file for personal bankruptcy. Numerous unit owners are beginning to utilize an old technique, previously used primarily against second mortgages and other junior […]
Appellate Court Decision (FL): Unit Owner Loses Right to Redeem Property Back After Association’s Foreclosure
For years our firm’s community association attorneys have been counseling and working with our association clients to complete their own foreclosures in advance of the lenders, which have often been slow to act on their foreclosure cases. Read more………..
A New Case Interprets First Mortgagee’s Safe Harbor for Past Due Condominium Assessments (FL)
Although the term “first mortgagee” is not defined within F.S. 718, a recent decision from the 5th DCA provides some clarity as to who fits into this category. In Beltway Capital, LLC v. The Greens COA, Inc., Beltway Capital brought a foreclosure action in which The Greens COA, Inc., a condominium association, was a named […]
Condominium Superlien: Essential, Effective, Established – and Now Threatened
You’d think a law that has been in place for nearly two decades and is working well by all accounts would be reasonably secure. But apparently not. The condominium superlien, widely credited with helping condominium associations navigate several economic downturns, including the most recent one, with minimal economic damage, is being questioned by lenders, weakened […]
Effect on Community Associations When Owners File Bankruptcy
Association assessment collection is every day business for Florida community associations. Often times, the unit owner will file bankruptcy to avoid this legal obligations. The law governing condominium and homeowners association assessments with regard to bankruptcy actions is found at 11 USC § 523 (a)(16). This law which generally states that assessments are not dischargeable. […]