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Subject: How do unpaid condo dues get paid for a owner that is selling his/her unit
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JimC24
(Connecticut)

Posts:17


01/29/2018 4:47 PM  
I mentioned in a previous post that an owner of one of the units in my condo is behind on condo dues and he put is unit up for sale. He refuses to pay condo dues now. In CT the Association already has a lien on the unit. Everyone keeps telling me that the owner can not clear title without making the Association whole on back common charges. But how do the mechanics of this process actually work? Will someone contact me and ask me what the guy owes and then cut me a check for the amount? Who would this someone be? I just don't want to be duped by this guy who is obviously trying to get out without paying.

Thank you for your response in advance.
MelissaP1
(Alabama)

Posts:7294


01/29/2018 5:01 PM  
Make sure a lien is indeed on file. I got told that a few times to find out it wasn't the case. If there is one, then when the unit sells, the owner has to pay the amount owed and the legal fees for filing the lien. It should accumulate from the beginning where they stopped paying till the date they pay. Late fees/interest may be added on as well. Those are often used a negotiations for those willing to pay up.

Former HOA President
BenA2
(Texas)

Posts:401


01/29/2018 5:26 PM  
If they use a title company the title company will check public records to determine if the property has liens or is subject to dues or assessments.

If there is a lien they will contact the party who placed the lien and determine the amount owed. If there is a condo association or HOA, they will send a request for information to the HOA or whoever collects the assessments. It's called a resale certificate or statement of accounts. The HOA or condo association gives the title company the information which includes the monthly or annual amount of the assessments plus any past due amounts. Any money owed is added to the closing costs and is collected from either the buyer or seller, depending on their agreement and a check would be issued for the HOA.

In some, if not most states, the seller is required to report the existence of a community association. If they don't, the title company would find out anyway as long as the proper papers are filed with the government.

I think this is how it works in most states but they all have different laws.
KellyM3
(North Carolina)

Posts:1281


01/29/2018 6:27 PM  
Melissa's right. The lien will "cloud" the title and be part of the settlement.
TimB4
(Virginia)

Posts:15724


01/29/2018 7:49 PM  
As has been pointed out, most Associations CC&Rs constitute a lien.
However, somebody has to record the lien (along with proper notices) to actually have the lien seen by others.

As has been pointed out, most settlement companies will (if they can locate the information) contact the Association to find out the amount of the assessment, if the assessments are current and, if not, what is owed. If this occurs, that amount will be added to the closing costs and the Association should receive a check within 2 weeks of closing.
RichardP13
(California)

Posts:2538


01/30/2018 7:52 AM  
Posted By MelissaP1 on 01/29/2018 5:01 PM
Make sure a lien is indeed on file. I got told that a few times to find out it wasn't the case. If there is one, then when the unit sells, the owner has to pay the amount owed and the legal fees for filing the lien. It should accumulate from the beginning where they stopped paying till the date they pay. Late fees/interest may be added on as well. Those are often used a negotiations for those willing to pay up.



If it is a "cash sale" often, no escrow is opened or title insurance purchased and the lien goes unpaid.
PaulaW2
(Hawaii)

Posts:17


01/30/2018 9:30 AM  
What Richard said about a cash sale, may be true, but I just sold a property in an all cash deal and there was both escrow and a title search. Just sayin'. If there is a proper lien on the property for HOA dues, if the owner even tries to re-finance, they will be "caught" and required to settle the lien.
KellyM3
(North Carolina)

Posts:1281


01/31/2018 2:19 PM  
Very few people with the means to purchase a home w/ cash will overlook title insurance. I can't imagine leaving that open-ended in the closing.
BenA2
(Texas)

Posts:401


01/31/2018 2:45 PM  
Posted By KellyM3 on 01/31/2018 2:19 PM
Very few people with the means to purchase a home w/ cash will overlook title insurance. I can't imagine leaving that open-ended in the closing.



This is probably more true with homes but with land sales it is not that unusual for buyers to skip the title company. We have a lot of undeveloped lots and it's not uncommon.
LetA
(Nevada)

Posts:433


02/01/2018 8:29 AM  
Proving the buyer uses a title agency, the title agency will take the payment from the buyer, deduct the lien about and cut a check to satisfy then lien.
DouglasM6
(Arizona)

Posts:722


02/01/2018 10:49 AM  
I suggest you contact the realtor and tell them there are past due assessments.
JohnC46
(South Carolina)

Posts:7503


02/02/2018 8:24 AM  
Posted By DouglasM6 on 02/01/2018 10:49 AM
I suggest you contact the realtor and tell them there are past due assessments.




We did that in one case and the realtor got her client to catch up on his dues as the realtor did not want to get involved with a sticky situation.
SS11
(Arizona)

Posts:7


02/14/2018 4:41 PM  
Not sure if this is a solution or not.
Seller signs promissory note to HOA so they can collect these past due fees at COE out of Seller's funds.
Just an idea!!!!!
MelissaP1
(Alabama)

Posts:7294


02/14/2018 4:58 PM  
Probably not. No need for a promissory note as it's already agreed your to pay the dues. Need something legally stronger like a lien.

Former HOA President
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Forums > Homeowner Association > HOA Discussions > How do unpaid condo dues get paid for a owner that is selling his/her unit



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