If you have purchased a condominium or property in an HOA you have signed a rider. For condos its called a Condo Rider. For HOAs its Called a PUD Rider. This rider is an attachment to the document recorded in the land records to secure the note given by the lender (aka mortgage). These riders […]
Use Riders to Collect Delinquent HOA Fees
If you have purchased a condominium or property in an HOA you have signed a rider. For condos its called a Condo Rider. For HOAs its Called a PUD Rider. This rider is an attachment to the document recorded in the land records to secure the note given by the lender (aka mortgage). These riders […]
Combating Serial Bankruptcy Filings
Associations are all too familiar with bankruptcy serial filers disrupting foreclosure sales leading to frustrating and costly consequences for the Association. Each new bankruptcy filing by the debtor forces the Association to incur additional costs and increases the amount of debt owed while the debtor continues to live on the property without paying the Association. Read […]
Washington Court Upholds Process Service of Owner by Publication
In a recent unpublished opinion, the Washington Court of Appeals decided that a condominium association was entitled to serve an owner with a lawsuit by publication. Read the article………………………….
Condo Foreclosure Buyer Snoozes and Loses – Board gets to Keep Deposit (NY)
This is a classic story of “you snooze, you lose”. A Brooklyn condo board at 442 St. Marks Avenue Condominium fought hard to collect over $88,000 in arrears from a unit owner. In the end, after a long fight, the board gets to keep $49,000 in a good faith deposit by a purchaser at the […]
HOA Dues & Payment Protocol
For a homeowner’s association (HOA) to run effectively, dues from community members play a significant role. Expectations for HOA dues are typically outlined when new homeowners join the community. Occasionally, the association may have difficulty collecting these payments from a member. As it is the board of directors’ fiduciary responsibility to make sure all members […]
Woman’s battle with HOA ended with her losing home, them purchasing it for $3.24 (GA)
It’s almost impossible to buy a new home these days that’s not part of a homeowner’s association, or HOA. Those who have never lived in one, need to understand what’s at stake the moment they sign the closing documents. While most HOA’s are respected for keeping community spaces maintained, swimming pools safe and lawns up […]
Defaulted Mortgagee Saved By Distinction Between Note and Mortgage Claims (OH)
Previously, I wrote blog posts on planning commercial litigation and the considerations involved in voluntarily bringing claims in one lawsuit as a plaintiff. See Planning Commercial Collection Litigation: A Primer and Joinder of Claims in Commercial Foreclosure Litigation is a Choice. The lessons of those posts were applied to save a mortgage lender in Villas […]
Doing Collections Yourself? Here’s What Your Board Needs To Know
Your uniform collections policy should be your collections process roadmap. It will tell you when and how the association should engage a delinquent owner. These steps should already be outlined in your governing documents or rules and regulations. They must be enforced equally and without prejudice. No individual regardless of their circumstances should be treated […]
Massachusetts Condominium Collections Traps for the Unwary
G.L. c. 183A § 6 provides a well-worn path for the collection of unpaid common expense assessments in Massachusetts. The steps required under § 6, (60-day notice, 30-day notice, etc.) are spelled out in the statute and, in the typical circumstance, the process is rote. When the delinquency hits 60 days, the account is sent […]
Pro se litigant’s bid to elude HOA fees after tax sale fails on appeal (IN)
A man who bought Morgan County properties at a tax sale that were subject to a homeowners association failed to convince the Indiana Court of Appeals on Tuesday that he was wrongly ordered to pay delinquent association dues. Read the article……………………….
Georgia Courts Strike a Blow to HOAs
Recently, the Georgia Court of Appeals rendered a decision that will negatively impact many homeowners associations that have not yet adopted the Georgia Property Owners Association Act. Read the PDF………………………………..
There’s No Excuse for Not Paying Assessments
There are many reasons why your community association might have delinquencies. There are times when people run into circumstances in their lives. Bad luck and tragedy can visit anybody without warning. Ill fortune has many ways of finding people and affecting their ability to pay. It could be personal health issues or a downturn in […]
NJ Legislative Action Committee Highlight: Two Foreclosure Reform Bills Become Law
New Jersey Governor Phil Murphy recently signed two foreclosure reform bills into law, designed to shorten the time a house sits vacant so the property’s exterior doesn’t become unsightly and unsafe. These laws are part of a larger package of legislation addressing the foreclosure crisis in New Jersey created to help homeowners keep their homes. […]
How to Deal with HOA Delinquency
Since association boards have a fiduciary duty to ensure that assessments are levied and collected, the best thing a community can do to avoid serious financial issues related to assessment delinquencies is to be—and stay—proactive. A formal collection policy is the first step in being proactive. Read the article………………………….
US District Court Rules that Prior Recorded Condominium Lien takes Priority Over Federal Tax Lien to the Extent of the Amount Stated in the Lien Notice (MI)
In Yarmouth Commons Ass’n v Norwood, et al., 299 F. Supp.3d 862 (E.D. Mich., 2017), the United States District Court held that a prior recorded condominium lien had priority over a federal tax lien but only to the extent of the amount stated in the lien notice. Read the article………………………..
Who’s on First? Condominium Unit Owner Joint and Several Liability for Delinquent Assessments After Foreclosure (FL)
The First District Court of Appeal decision in Coastal Creek Condominium Association, Inc. v Fla Trust Services, LLC, Case No. 1D18-1457 (Fla. 1st DCA, July 16, 2019) addressed whether a current condominium unit owner is jointly and severally liable for delinquent assessments accruing during the ownership of a remote owner. Having found that the joint […]
Restrict Cashing Checks With Restrictive Endorsements (CO)
What do you do when you receive a check from a delinquent owner with a restrictive endorsement on it? Do you cash it? Do you return it? Do you call the attorney? A restrictive endorsement is a written statement sent with a payment that either defines what the check is written for (such as “Assessments […]
6th Circuit: Collection fee authorized under contractual agreement did not violate FDCPA
On August 21, the U.S. Court of Appeals for the 6th Circuit affirmed a district court’s determination that a collection fee charged by a debt collector seeking to recover past due homeowner’s association fees was expressly authorized by a contractual agreement and did not violate the FDCPA. Read the article…………………………
A Condominium Association Victory in the Ongoing Fight for a Prior Owner’s Assessments (FL)
A recent case, Coastal Creek Condominium Association, Inc. v. FLA Trust Services LLC has upped the ante in the fight to collect outstanding assessments owed by previous owners pursuant to Section 718.116(1)(a), Florida Statute. In Coastal Creek, the Florida First District Court of Appeal adopted a different interpretation of a Florida statute than the Florida […]
When a Property is in Foreclosure, What is the Association’s Right to Redeem and What is that Process? (CO)
When a Board becomes aware of a Public Trustee foreclosure proceeding, their first question is usually “What does this mean for us?” If the homeowner is delinquent in their assessments, then the Association has a lien against the property. Assuming it is the first mortgage foreclosing against that homeowner (as opposed to a second mortgage), […]
Houston condo owners sued their HOA board after foreclosures, a big assessment and other issues. But state law gives them few options (TX)
The letter literally took her breath away. “Notice of foreclosure sale,” Aurora St. Andrassy read as a friend drove her home from work in August 2016. The letter informed her that her home in the Sugar Branch Condominiums in southwest Houston would be sold at auction due to about $11,000 she owed to the homeowners […]
Who’s Responsible for HOA/Condo Assessments When a Homeowner Dies? (NC)
In North Carolina when a homeowner dies, his or her real property passes immediately to the heirs under a Will or if there is no Will, under the Intestate Succession Statute. This means that as soon as the homeowner dies there is immediately, by operation of law, a new owner. The real property is not […]
My HOA got a $1,200.00 judgment against me. So why are they saying I owe $6,000? (AZ)
If you live in a homeowners association and have ever fallen behind on your assessments, chances are good you received one or more letters threatening legal action. If you have been unlucky enough to be sued by your homeowners association and lost, chances are very good that your homeowner association has added court costs and […]
Can they really shut off my water? (AZ)
Homeowner and condominium associations are increasingly adopting policies for shutting off water or other utilities where an owner has fallen behind in his or her assessments, owes fines or penalties for violating the governing documents, or is supposedly refusing to follow rules. Although people who own in a homeowner association generally are obligated to pay […]
What happens after the bankruptcy discharge: An emerging (and disturbing) trend in foreclosure, bankruptcy, and HOA law (AZ)
The prevalence of foreclosures in the real estate market has had several unexpected repercussions to distressed homeowners who have made the decision to walk-away from their home. Banks appear to be unable, incapable, or unwilling to handle the volume of foreclosures, so a distressed homeowner may continue to own his or her home for months, […]
Pitfalls for Community Associations When an Owner Files Bankruptcy
Last year, over 750,000 bankruptcy cases were filed in the United States. Therefore, it is only natural that a significant number of owners of properties in community associations are filing bankruptcy. When that happens, the collision of community association law and bankruptcy law can create unpleasant pitfalls for associations. Read the article……………………
HOA Homefront – They won’t pay, so now what? 3 steps (CA)
When a homeowner fails to pay their share of the association expenses, the board is duty-bound to pursue the unpleasant but necessary task of compelling the member to pay. The association has three options: small claims court, non-judicial foreclosure and judicial foreclosure. In each approach, collection costs are added to the debt. Read the article………………………
Financial Management of Community Associations | Assessments and Bankruptcy
A community association should have procedures in place to protect its interests in the event a delinquent owner declares bankruptcy. When an owner files a petition for relief from bankruptcy, this action affects: Read the article…………………….
The HOA Has Foreclosed on a Home for Delinquent Dues, Now What? (NC)
What happens when an HOA completes a foreclosure sale of its claim of lien for unpaid dues? There are several common outcomes which are listed below in order of frequency in our experience: (1) The owner/occupants are evicted and the house is left empty. The Association should include this property on its general liability policy […]
U.S. Supreme Court Holds Debt Collection Firms that Solely Practice Non-Judicial Foreclosure Exempt from FDCPA*
It is no secret that homeowners’ associations (“HOA”) are run and managed through the funds of monthly HOA assessments (“Fees”), and more often than not, HOA’s hire and retain debt collection firms to collect on past due Fees from delinquent members of the community. Sometimes, this leads HOA’s to lose large amounts of money in […]
Financial Management of Community Associations | Assessment Collections
Enforcement of collection procedures and remedies should be prompt, systematic, and aggressive. When a payment is late, your community association collection policy should tell you: Read the article………………………
Maryland Bankruptcy Court Determines Priority of Homeowner Association Fees versus Mortgage Lender’s Deed of Trust
In 2017, the Maryland Court of Appeals in the case of Select Portfolio Servicing, Inc. v. Saddlebrook West Utility Company, 455 Md. 313 (2017) (“Saddlebrook”) held that a provision in a recorded declaration by a utility that purported to create a lien to secure payment of an annual assessment to cover the construction of water […]
Why Your Community Association Needs a Uniform Collection Policy
If left unchecked, delinquencies can become a big problem for your association. It isn’t unusual for someone to miss a payment or two, but when left unaddressed these debts can swell and cause major (but not irreparable) harm to your community. Read the article…………………………
Governor Murphy Signs Important Foreclosure Reforms for Community Associations (NJ)
On March 28, we wrote about two important bills adopted by the New Jersey Legislature which aimed to lessen the burden felt by community associations with respect to properties in foreclosure. We can now report that those bills have been signed into law by Governor Murphy. As outlined in our earlier Alert, New Jersey quickly […]
Five Mistakes to Avoid When Collecting Past Due Maintenance Fees
Your first encounter with a delinquent homeowner may catch you off guard, you may be unsure how to best handle this situation. At Axela, we specialize in homeowner association fee collections. In this article we will discuss the five mistakes to avoid when collecting past due Maintenance Fees Read the article………………………….
What Happens to the Homeowners Association Fee When a House is Foreclosed? (CA)
Common interest developments, such as condominium projects and planned-unit developments, usually involve an additional monthly fee. A homeowners association, or HOA, levies the same fee for each owner within the community. HOA fees fund the everyday maintenance, services and tasks of the HOA, and therefore are mandatory. The homeowner remains responsible for his share of […]
The Mailbox Rule and What it Means for Your HOA Community
Common to all HOAs are homeowners who are at one time or another delinquent in their association fees and payments. The association will send out delinquency notices to those homeowners to collect overdue payments and resolve the issue. When homeowners still fail to make payments, an HOA may be forced to take legal action. But […]
Options for HOA’s Facing a High Past Due Billing Rate
Assessment collection is imperative to keep an HOA running smoothly. Too often, HOAs find themselves facing a high delinquency rate. This affects both individual homeowners and the community as a whole. What happens when an association’s delinquency rate is too high? What options does the HOA have to collect? Read the article……………………..
Court of Appeals Upholds Condominium Association’s Collection Action (WA)
The Washington Court of Appeals recently ruled in favor of a condominium association in an assessment collection dispute. The Court affirmed the association’s power to levy regular and special assessments for common expenses and its perfected lien on the unit. Read the article…………………
Bank of America’s reading of HOA lien law was right on the money – 9th Circuit
A federal appeals court on Wednesday struck down a ruling that Bank of America’s $290,000 mortgage on a Nevada residence had been wiped out by a homeowners’ association foreclosure to recover less than $2,000 in unpaid dues. Read the article……………………
Making Arrangements for Arrears of HOA Dues (CA)
People who live in condominium units automatically become members of homeowner associations that maintain common areas, institute rules and regulations, set up budgets and establish maintenance fees paid by unit owners. When owners fall behind in those dues, the association board of directors has the authority to begin a process that ultimately could end in […]
Collection Minefields & Helpful Tips (NC)
I recently spoke on the topic of Collection Minefields at the last two NC Community Association Institute (CAI) Law Days. Both sessions were very well attended and the participants came with many great and pointed questions. That tells me that both Board members and mangers are acutely aware that collecting unpaid assessments is a vital […]
Updated Lien Priority Law Benefits Condominium and Homeowners Associations in New Jersey
On March 25, 2019, the New Jersey Legislature passed legislation that will enhance the lien priority for condominium associations and, for the first time, give the same lien priority to homeowners associations. If this legislation is signed by Governor Murphy, both condominium and homeowners associations will enjoy a limited priority over all other liens (except […]
New Jersey Legislature Passes Important Foreclosure Reforms for Community Associations
For years, organizations that work with community associations, along with association residents, have lobbied for reforms to the foreclosure system in New Jersey. As of this writing, two bills currently sit on Governor Murphy’s desk which, when signed, will make small strides towards easing the burden felt by community associations when saddled with numerous properties […]
Condominium Foreclosures and the Banking Industry (CT)
Many times, our clients will rely on the foreclosure process when unit owners are not paying their common charges. On occasion the unit owners will have a mortgage on their unit. When this is the case, the Association has to list the mortgage in its foreclosure action to ensure that the Bank has notice of […]
U.S. Supreme Court narrowly interprets “debt collector” under FDCPA
The U.S. Supreme Court ruled unanimously on March 20 that law firms conducting nonjudicial foreclosures, or foreclosures outside of the court system, are not generally considered debt collectors under the Fair Debt Collection Practices Act (FDCPA). The decision in Obduskey v. McCarthy & Holthus LLP addresses an important federal advocacy priority for CAI Read […]
Former property owner not owed relief in fraud case against homeowners’ association (TX)
The Texas 14th Court of Appeals ruled against a homeowner March 7 in his allegations of unfair debt collection practices against his homeowners’ association and related entities. Justice Frances Bourliot wrote the opinion, and Chief Justice Kem Frost and Justice Tracy Christopher concurred. Although a trial court ruled in favor of Robert Burton and didn’t […]
General Collection Procedures and Tips (CT)
One of the most important functions of boards and property managers is to make sure common fees are collected and accounted for every month. This stream of income is vital to the successful operation of the association. When accounts become delinquent and are forwarded to our office for collection, our goal is to collect the […]