In a new lawsuit, a Philadelphia-based condominium group is seeking unpaid damages exceeding $19,000 from two of its residents connected to allegedly-unpaid assessments and other charges. Park Plaza Condominium Association of Philadelphia filed suit in the Philadelphia County Court of Common Pleas on March 28 versus Joel Jaffe and Bonnie Jaffe, also of Philadelphia. Read […]
Association Collections Policies Clarified by Court Decision (IL)
In Lake Point Tower Condominium Ass’n v. Waller, 2017 IL App (1st) 162072, decided on June 28, 2017, the Association filed a Forcible Entry and Detainer action against Defendant to obtain possession of Defendant’s condominium. At trial, Defendant filed a motion to dismiss the complaint. In the motion, Defendant acknowledged that she owed past-due assessments […]
Tenants and Personal Property after a Foreclosure Sale (FL)
After a judicial foreclosure sale concludes and a certificate of title is issued, the purchaser named in the certificate may find the newly acquired residential property either occupied by a tenant in possession or filled with personal belongings. Sections 83.561, Florida Statutes, “Termination of rental agreement upon foreclosure” and 83.62, Florida Statutes, “Restoration of possession […]
Assessment collection for condominium associations in Maryland and Washington DC
The timely payment and collection of condominium assessments is essential to the financial well-being and efficient operation of a condominium association. The association’s Board of Directors has a fiduciary responsibility to stay on top of assessment collection so that delinquent condominium assessments do not accumulate. Excessive delinquencies not only deprive a condominium association of needed […]
New Decision from the D.C. Court of Appeals Recognizes Additional Defenses to HOA Super-Priority Lien Statute
As we noted in last week’s blog post, the District of Columbia Court of Appeals issued a decision on March 1, 2018, that created a new wave of uncertainty for lenders with loans secured by deeds of trust on condominium units in the District of Columbia. In the Liu decision, the court held that a […]
Washington D.C. Appellate Court Holds Foreclosure of Condominium Lien Extinguished First Mortgage Despite Condominium Association’s Representations to the Contrary
The District of Columbia Court of Appeals recently held that a condominium’s foreclosure of a “super-priority” condominium lien extinguished an otherwise first-priority mortgage on the property, despite the fact that the association’s notice of sale and deed to the third-party purchaser stated that the sale was “subject to” the mortgage. See Liu v. U.S. Bank […]
What Can an HOA Board Do if Owners Refuse to Pay Special Assessments? (CA)
Homeowner associations are sometimes faced with special circumstances that arise even when they’ve done an excellent job of planning for replacement costs. Large-scale repairs, emergency situations, or capital improvement projects may occur that put their reserves dangerously low. Special HOA assessments, in addition to monthly HOA fees, could then be the best option. Read the […]
Get in Line: Association Assessment Lien Priority (FL)
At issue in today’s column is a subject we recently addressed regarding whether an association must record its assessment lien in the public records of the County in which the community is located in order for it to be effective and whether such lien relates back to the initial date of recording of the declaration. […]
Discharge of Condominium and Homeowners’ Assessments in Bankruptcy (FL)
Since the early 1990s, the federal courts have struggled with whether, and to what degree, a debtor in bankruptcy who receives a discharge is free from liability for post-petition condominium and homeowners’ association assessments. The issue is important to condominium associations and homeowner’s associations, as well as debtors in bankruptcy. Because the association’s assessment lien […]
Modernizing Condominium Documents To Streamline Assessment Collection (DC/VA/MD)
Assessment collection is critical to the efficient operation of a condominium. Governing documents play an important part in the collection process by establishing a condominium association’s assessment collection authority and collection procedures. Therefore, it is important that governing documents clearly define procedures and comply with current laws. Some assessment collection procedures in condominium governing documents […]
8 Homeowners Association Collection Laws (NC)
It’s HOA collection season, so our HOA Ninjas want to remind you of the 8 laws of HOA collections to help your homeowners association help its members pay their assessments on time. Following these laws will collect more dues more quickly, and keep your HOA in compliance, so you’ll have the best chance to win […]
Lien for Unpaid Assessments (OR)
Under Oregon state law, condominium associations and homeowner associations have an automatic lien against the unit or lot for unpaid assessments. In Washington, a condominium association has a lien on a unit for any unpaid assessments levied against a unit from the time the assessment is due. Unfortunately for Washington homeowner’s associations, the state law […]
The Statute of Limitations in Collecting a Debt (FL)
All states have a limitations period which restricts the time period that you can file suit to collect a debt. Some statute of limitations periods are as short as one year and some up to 20 years. In Florida, generally, the limitations period to sue to collect an unpaid obligation is five years for a […]
Should Your Community Report Delinquent Assessments to the Credit Bureaus?
We have been asked by several clients over the past year about whether they can report delinquent assessment debt to the credit bureaus, or whether we will do so on their behalf. This article is intended to walk you through our general position on this matter. While we draw some conclusions herein, this is not […]
HOA Fees: A Clear Collection Policy is Essential for Your HOA Board
Every HOA’s number one priority is the legal fiduciary responsibility to enhance and maintain their property. The only way to do that is by collecting HOA fees. That’s why a clear collection policy is a must-have for your HOA board. Sounds like fun, right? Maybe not. But the new year is a great time to […]
Navigating Safe Harbors and HOAs in Florida
The Florida Fourth District Court of Appeals (Fourth DCA) recently affirmed the extension of safe harbor protection provided to homeowner’s associations under §720.3085(2)(c), Florida Statute, to a nonmortgagee/non-mortgage holder. The statute addresses property assessments imposed by Florida homeowners’ associations. Under the pertinent provisions of this statute, if the associations’ governing documents allow for assessments, a […]
Foreclosure Strategies For California Community Associations
In the assessment collection arena, there have been a number of pro-homeowner court decisions that affect a community association’s ability to collect unpaid HOA/Condo assessments. First, courts have held that associations must accept partial payments, which has allowed homeowners to attempt to avoid foreclosure by paying only delinquent assessments reducing the assessment balance below the […]
No Lien Required for Condominium Association to Collect Surplus Tax Deed Sale Proceeds (FL)
Condominium associations’ rights to collection unpaid assessments received a boost from the Fourth District Court of Appeals. In Calendar v. Stonebridge Gardens Section III Cd’m Ass’n, Inc., Case No. 4d 16-3393 (Fla. 4th DCA, December 13, 2017), the Applet Court tackled the issue of whether a claim of lien or judgment needs to first be […]
The Assessment Liability Of A Subsequent Owner After A Lender Foreclosure – It May Not Be What You Think! (FL)
For those not yet introduced to the phrase “statutory safe harbor,” in the context of community associations, it limits the past due assessment liability of a first mortgagee, along with its successor or assignee of the mortgage to who acquires a condominium unit or a HOA parcel as a result of foreclosure of its first […]
Persistence Can Lead to Dollars: Preserving the Community Association’s Lien for Delinquent Assessments – Part One (VA)
One of the most common questions we receive from Community Association clients is how do we preserve our lien for and recover delinquent assessments? The frustrating reality is that some owners in Community Associations fail to pay their assessments in a timely manner. These delinquencies can create serious financial issues within the community. There are […]
What Foreclosure Means to Your Homeowners Association
Foreclosure is a bit of a dirty word. Nobody wants to see anyone thrown out of their home – but it happens. There are basically two different kinds of foreclosure homeowners association need to worry about: Foreclosure by the bank and foreclosure by the association itself. When a bank forecloses on a home in the […]
Bankruptcy – What Every Condominium Association Must Know
Delinquent assessments are unfortunately a frequent and practically universal problem for condominium associations. The collection of delinquent assessments is essential to the viability of any condominium association; however, these collection efforts can become problematic when a co-owner files for bankruptcy. This Article will address the two common types of consumer bankruptcies filed by co-owners, those […]
FEMA Hold On, They Aren’t Going for the Home
For community associations, when an owner goes into foreclosure, the best-case scenario is that the bank or mortgagee moves the property swiftly through the foreclosure process, and a new owner then takes possession and begins paying the assessments as they come due. In the absolute best cases, the foreclosure process will take around a year; […]
Post-Foreclosure Considerations: When the Association Owns a Unit
If you are a condominium association who is preparing to complete a lien foreclosure on a Unit, you are sure to have many questions about what to expect if you become the owner of the Unit through the foreclosure process. Should the Association rent, sell or hold the Unit and what are the risks associated […]
We’ve Got a Problem: Statute of Limitations on Long-Term Notes (FL)
A Florida Supreme Court justice Thursday issued a nearly five-page opinion to point out “the latest symptom of a more serious problem”—a misunderstanding over when the clock starts in foreclosure litigation with multiple defaults and suits. The confusion centers on whether the date of each missed payment carries any legal significance when calculating lenders’ deadline […]
Aggressive Collection Strategies: Using Proceedings Supplementary to Get Paid (FL)
In Florida, Proceedings Supplementary are begun utilizing the procedure found in Fla. Stat. 56.29. The Proceedings Supplementary statute was enacted prior the adoption of the Florida Rules of Civil Procedure. In the recent past this created a lot of confusion with lawyers and the Judiciary as the procedure set forth in the initial Proceedings Supplementary […]
Bankruptcy 101: Chapter 7 vs. Chapter 13
We have been asked on numerous occasions recently to provide guidance to our community association clients about the effects that bankruptcy has on their collections cases. The most common forms of bankruptcy by owners in the community association context are filed pursuant to either Chapter 7 or Chapter 13 of the United States Bankruptcy Code. […]
Nevada Supreme Court Rules HOA Super-Priority Liens Can Be Revived after Release
Homeowners’ associations have a more robust tool for forcing mortgage lenders to pay delinquent assessments following a September 14 decision by the Nevada Supreme Court. Nevada HOAs have enjoyed a super-priority lien under NRS 116.3116 for nine months of unpaid assessments preceding institution of foreclosure proceedings, in addition to certain charges for maintenance and nuisance […]
Case Alert: Emailed Notices of Foreclosure Under In Re Ackah (NC)
In re Ackah: Must Planned Communities Now Serve Notices of Foreclosure Hearing Via Email? The North Carolina Court of Appeals issued an opinion on September 5, 2017, that appears to add an additional requirement for foreclosure trustees regarding the due diligence necessary to properly serve the homeowner in an HOA foreclosure proceeding. Read the article…………….
Faulty Foreclosure Service Results in Lienholder Having to Pay Property Owner (NC)
When a lienholder starts a foreclosure, it usually is focused on getting money into its pocket. Yet a recent opinion from the North Carolina Court of Appeals (In re: Ackah – Sept. 5, 2017) should provide a warning to all lienholders – make sure you get proper service in the foreclosure or you may end […]
Unpaid Assessments: Liens & Personal Obligations – Part I
Under state law in Washington and Oregon, Condominium and Homeowner Associations have the authority to adopt and amend budgets, and levy and collect assessments from owners for the common expenses. But it can be confusing what happens when an owner does not pay the assessment. This two-part article discusses the personal obligation of the owner […]
What is the bank’s obligation to pay assessments under the Michigan Condominium Act after a foreclosure?
MCL 559.169 allows for a Michigan condominium association to impose assessments against all co-owners in order to pay for the common expenses that are necessary to operate the condominium. When a co-owner fails to pay assessments, it places a strain on the condominium association’s budget for the year and unfairly results in an increased burden […]
5th Cir. Holds Threat of Lawsuit to Collect Partially Time-Barred Debt Did Not Violate FDCPA (TX)
In a split decision, the U.S. Court of Appeals for the Fifth Circuit recently decided that attorneys representing a condominium association did not violate the federal Fair Debt Collection Practices Act by threatening non-judicial foreclosure on debt that was partially but not fully time barred. The plaintiffs owned a condominium in Houston, Texas. They sued […]
9th Cir. Holds Federal Foreclosure Bar Preempts Nevada HOA Superpriority Statute
The U.S. Court of Appeals for the Ninth Circuit recently held that the Federal Foreclosure Bar’s prohibition on nonconsensual foreclosure of assets of the Federal Housing Finance Agency preempted Nevada’s superpriority lien provision and invalidated a homeowners association foreclosure sale that purported to extinguish Freddie Mac’s interest in the property. Read the article…………….
Court case supports collection of unpaid fees (IL)
My Aug. 26 column “teased” that I would address in a future column the circumstances under which the purchaser of a foreclosure condominium at a judicial sale may be responsible for all unpaid sums due from the prior, foreclosed owner. The Illinois appellate court has issued another opinion on this issue, and I’ll address it […]
Illinois App. Court (1st Dist) Holds 7-Month Delay in Paying Overdue HOA Assessments May Not Extinguish HOA Lien
The Appellate Court of Illinois, First District, recently reversed a trial court order granting summary judgment in favor of a mortgage servicer and against a condominium association (COA) holding that a material question of fact existed regarding whether the servicer promptly paid assessments that accrued after the foreclosure sale, as required under section 9(g)(3) of […]
Everything is “Fine,” So Long as You Strictly Follow Your Documents (FL)
It has long been recognized that liens are statutorily created rights and consequently are strictly construed. What this means in English is that you can’t simply substantially comply with the lien filing laws. If you want your lien to be valid it must meet all of the statutory requirements and be filed timely. The Florida […]
Fla. App. Court (5th DCA) Reverses Foreclosure Judgment That Excluded Interest, Escrow
The District Court of Appeal of the State of Florida, Fifth District, recently reversed final judgment of foreclosure entered in favor of a mortgagee that omitted interest and escrow amounts due, and remanded to the trial court to modify judgment to include these amounts. In so ruling, the 5th DCA determined that the mortgagee met […]
Constantly Changing Condominium Laws (IL)
A recent opinion from the Illinois’ First Appellate District, Country Club Estates Condominium Assoc. v. Bayview Loan Servicing, LLC, 2017 IL App (1st) 162459, provides that “prompt” payment of assessments is required to extinguish presale assessments under the Condominium Property Act. This ruling not only puts a new wrinkle on condominium association lien extinguishment, but […]
Fourth DCA Confirms Association Lien Foreclosure Valid Despite Pending Mortgage Foreclosure (FL)
Despite a slowing in the number of Florida mortgage foreclosure cases, many community associations still face situations where a foreclosing lender fails to timely complete its foreclosure resulting in the property sitting abandoned and not contributing financially to the community. As a result, many community associations are faced with a decision of whether to proceed […]
HOA Super Lien — What is it and Why Should I Care?
In an HOA, owners who fail to pay assessments and other charges owed to the condo or homeowner’s association, will likely have a lien placed on the home by the association. A lien is a legal tool used to protect a creditor against default. When a home sells, the creditor with the lien must be […]
The Pesky Nuances of the HOA Collection Policy
If the phrase “assessments are the lifeblood of a community association” passed your lips at the last board meeting, you either have 1) a puzzling penchant for perplexing prattle (what?) or 2) your HOA collection policy isn’t keeping up with costs, resulting in painful financial straits. Either way, you have a problem. Read […]
Illinois Appellate Court Clarifies Palm Decision Regarding Association Collections
In Lake Point Tower Condominium Ass’n v. Waller, 2017 IL App (1st) 162072, decided on June 28, 2017, the Association filed a forcible entry and detainer action against Defendant to obtain possession of Defendant’s condominium. Subsequently, Defendant filed a motion to dismiss the complaint. Without disputing that the assessments were due, the Defendant alleged that […]
Understanding HOA Fair Debt Collection Practices: Practice Tips
If you work for an HOA, serve on its Board of Directors, or own a property covered by one, there are a few things you should know about debt collection practices. So, to help you develop a greater understanding of HOA Fair Debt Collection Practices, we put together a few tips. Read on for the […]
What NC Community Associations Need to Know about Fair Debt Collection
Nearly all Community Associations (“Associations”) must cope with owners who fail or refuse to pay their periodic assessments (also known as “Dues”). When this happens, the Association, typically acting through its property manager, may first attempt to collect the delinquent dues themselves, rather than referring the matter to an attorney. In such cases, Associations should […]
What NC Community Associations Need to Know about Fair Debt Collection
Nearly all Community Associations (“Associations”) must cope with owners who fail or refuse to pay their periodic assessments (also known as “Dues”). When this happens, the Association, typically acting through its property manager, may first attempt to collect the delinquent dues themselves, rather than referring the matter to an attorney. In such cases, Associations should […]
Bankruptcy basics for community association boards of directors
Over the last decade, community associations (like other businesses) have been forced to navigate the “Great Recession” and continued recovery. The “Great Recession” brought with it a significant increase in the number of personal bankruptcy filings across the country. Even now, personal bankruptcy filings continue to impact communities and their ability to collect assessments. It […]
Good Collection Practices Protect Lifeblood of Community Associations
Assessments are the lifeblood of every community association. For most associations, it is the sole source of income to pay for common expenses. Therefore, having tools and good practices to maximize collection of assessments are vital not just to survive and thrive, but to avoid unwanted special assessments and/or debt. It is the obligation of […]
When It Comes To The HOA/COA Lien Process, Misconceptions Abound
Working with homeowners associations (HOAs) and condo owners associations (COAs) often leads to confusion among servicers – and that confusion may lead to problems during the lien process. uring a recent interview with MortgageOrb, Damon Paxson, vice president of HOA solutions at LRES, a national residential and commercial real estate services company providing valuations, real […]
Why Associations and Their Managers Need to Be Wary of Debt Collections Practices and Laws
The fairly recent case of Agrelov v. Affinity Management Services, LLC, Case No. 15-14136, (11th Cir., November 9, 2016), is instructive for associations and their managers with respect to debt collections, and the trouble that associations and managers can get themselves into when trying to collect on outstanding assessments. Read the article………….