“Do I still owe HOA fees after my foreclosure sale?” It seems like owing fees after ownership has been transferred would be grossly unethical, if not illegal, but is this the case? The short answer is “yes”. However, this answer deserves a more detailed explanation. Broadly defined, Homeowner’s associations are put in place to improve the neighborhood. The association commonly manages committees such as a “pool committee”, a “neighborhood watch committee”, an “architectural control committee”, and more. An HOA can certainly make the neighborhood more pleasant and safe, but when loopholes fall through the cracks, it can be more of a curse than a blessing.
Being part of an HOA means there will most likely be a neighborhood watch committee to protect the neighborhood from vandalism, crime, and trespassers. There is, however, a price to pay. Each home within the limits of the HOA has to pay the HOA fees. Do you still have to pay the fees? If the property is bought by the lender, its responsibility is limited to 12 month assessments or 1% of the loan amount, whichever is less. If it’s purchased by a third party, the third party is obligated to pay the full amount, just like you were. Be that as it may, The third party purchaser can seek reimbursement from you for those fees.
If this seems unfair to you, prepare yourself, as It only goes downhill from here. In the state of Florida, banks have 20 years to process a foreclosure finding. Normally, this wouldn’t seem to be much of an issue. However, some borrowers who paid homeowners association fees will be responsible for the charges while the bank completes the foreclosure process and takes ownership of the property. In a case like this, the best decision you could make is to consult a foreclosure or a bankruptcy attorney for guidance on the issue.
Stephen K. Hachey, a Florida real estate attorney can help your wade through this difficult process and determine a positive solution. Contact him at 813-549-0096.
The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.
This post was written by Stephen Hachey. Follow Stephen on Google, Facebook, Twitter & Linkedin.