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Subject: Your opinion on home in our HOA owner deceased
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Author Messages
KarenT
(Washington)

Posts:248


08/26/2011 11:22 AM  
We have a home in our HOA that the homeowner was tragically killed in a ATV accident in May of 2009. The family walked away - no estate or probate. She was upside down on the mtge. At the time the family walked away there was a tenant in the home until April 2011. The lender just foreclosed and the court document under Washington law gives another 12 months right of redemption. We know the family is not going to redeem and the attorney firm for the lender refuses to pay delinquent dues. The legal owner is deceased and the house is sitting vacant. I know the HOA isn't really legally able to rent the house but we would really like to so we can receive some much needed income. Any thoughts or suggestions?
DonnaS
(Tennessee)

Posts:5671


08/26/2011 11:35 AM  

Karen,

The best and only advice is to contact an attorney. Every State is different in how you might procede to collect some money from this.
BradP
(Kansas)

Posts:2640


08/26/2011 11:53 AM  
Would agree with Donna...
BrianB
(California)

Posts:2820


08/26/2011 12:00 PM  
Karen, examine the statement you made:

I know the HOA isn't legally able to do X, but we want to anyway.

The HOA is a corporation built up of a bunch of normal people's savings and assets.

You are NOT Bank of America. You are NOT Goldman Sachs. You are NOT the US Congress. Therefore, you are not immune to prosecution for your illegal actions, you will be held liable for knowingly violating the law.

So your desire to knowingly do something illegal for potential benefit will mean that everyone stands the chance of losing their homes, property and savings when the law catches up with you.
EdC5
(Florida)

Posts:116


08/26/2011 12:14 PM  
I'd check with the HOA's attorney to see if Washington's statutes contain a prevision like Florida's that allows HOA/COAs to collect the rent due the landlord if the landlord is delinquent on dues.

Edward J Cooke, CMCA, LCAM
PetunkaM
(Florida)

Posts:1000


08/26/2011 12:28 PM  
Karen,

I am not sure ‘the right of redemption’ can be the reason for the bank not to pay the association fees? That is an interesting one. Just know, the banks never want to pay and yes, you may have to consult an attorney. Have you filed a lien?

…prevision like Florida's that allows HOA/COAs to collect the rent due the landlord if the landlord is delinquent on dues [Ed]

Ed, that provision assumes the property is rented, which this one is not. The Association cannot rent this property.
MelissaP1
(Alabama)

Posts:9134


08/26/2011 3:52 PM  
The HOA doesn't want the property. It's not what you think it will be if the HOA owned it. The probate judge should have decided what to do with the property. The dues aren't forgiven during this time either. It would be best if the HOA has a lien on this property. Hope the bank or family can sell it off soon.

We had an owner pass away in our HOA. It took 6 months for the process to go through Probate. The bank took the property over and eventually sold it. The board decided that owner's that pass get 1 month of dues off not paying. This is a mistake. A nice gesture but a mistake. There should have been a lien put onto the property prior to it going to probate. The judge would have sorted that out. It was then up to the bank and a missed oportunity. They take forever to pay the back dues...

Former HOA President
TimB4
(Virginia)

Posts:16700


08/26/2011 4:01 PM  
Posted By KarenT on 08/26/2011 11:22 AM

The family walked away - no estate or probate.




There is an estate. The estate would consist of all the real property, cash and personal property of the individual. Legally, someone would need to file final tax returns, etc. There may or may not be a requirement for probate (as every State differs).

As Donna and others suggested, you probably need to seek legal advice on this one.
SusanW1
(Michigan)

Posts:5202


08/26/2011 4:13 PM  
Prepare an invoice and get it to the lawyer who has been given the case by the Probate Court. That's about all you can do and expect a long line ahead of you.

Best to hope that the new owner will pay their dues, but I really don't think you are going to get your past dues.

How much are we talking about?

PetunkaM
(Florida)

Posts:1000


08/26/2011 4:18 PM  
No one has ever said the HOA wants to own the property. May be, before a reply is posted , one should understand just a little what ‘the of redemption’ really means. The poster already said if was a judicial order, I think. Perhaps you may want to read this:


Washington foreclosure right of redemption laws are available, but only in limited situations. The right of redemption is a law that allows some homeowners who have lost their home due to foreclosure to reclaim it. However, in the state of Washington, this law only applies in very limited cases. If at all possible, individuals should work to protecting their home from foreclosure. An attorney may be able to help the individual to do this or to work through a potential right of redemption.
Understanding of Key Options
In the state of Washington, foreclosure right of redemption is available limitedly. In most cases, there is no post sale statutory right of redemption. The only opportunity to use this type of service is in cases of judicial foreclosure. In that instance, there is a one year foreclosure redemption period. In addition, when a judicial foreclosure occurs, the homeowner can remain in the home and in possession of the home during the foreclosure redemption period.
A judicial foreclosure is one in which the foreclosure proceeding is handled within a court rather than through an out of court event. The process is usually for those lenders who hold property to secure the mortgage loan. A judicial foreclosure is more common in the eastern portion of the United States rather than in Washington. However, if this is the type of foreclosure proceeding you are going through, it may be possible for you to take back your property.
MelissaP1
(Alabama)

Posts:9134


08/26/2011 6:49 PM  
HOA isn't really legally able to rent the house but we would really like to so we can receive some much needed income. Any thoughts or suggestions?

I believe that is what the poster originaly posted...Seems they were interested in possibly figuring out a way to get the HOA to own the property to rent...That's what I got from it...

Former HOA President
PetunkaM
(Florida)

Posts:1000


08/27/2011 6:31 AM  
Melissa,
first, the unit is not even for sale. The real question is if the bank can refuse to pay the association fees under these circumstances? If there was no lien filed the judgment does not address it and I guess the bank does not have to pay any assessments. Whether or not the family will try to reclaim the unit remains to be seen, but Karen does not think so. So who owns the property now? Most likely no one but clearly the bank does not want it. It is a complicated situation and even hiring an attorney may not be worth the $ unless the maintenance fees are really high.

BonnieG1
(Nebraska)

Posts:1186


08/27/2011 7:30 PM  
We had a similar situation. The owner was an over the road trucker and was killed in an accident on the road. No one paid anything for over a yr or more. The total fees due were over $4,000.00. The bank foreclosed. This gave us many headaches. I was not on the Board when the bank foreclosed
KellyM3
(North Carolina)

Posts:1486


08/28/2011 11:53 AM  
Sure, you can go after the deed holder for collections. I'd dodge renting the property in spite of the allure of rental income. If you're a non-profit, you could take a risk by "profiting" on a rental. Also, a board of volunteers would hate being a collective landlord.
PetunkaM
(Florida)

Posts:1000


08/28/2011 12:11 PM  
Sure, you can go after the deed holder for collections. [Kelly]

He is dead.
KellyM3
(North Carolina)

Posts:1486


08/28/2011 1:36 PM  
The bank would technically begin owing HOA dues the moment the deed was transferred into its name. The foreclosure process would wipe clean junior liens, including HOA liens, holding the lender harmless for paying any delinquent dues accumulated under the previous family's ownership but not exempting it from current payments.

However, if you simply want the lender to get this property sold, consider heavily whether or not you want to tack a lien on the property - forcing a potential buyer into situation where their title search would turn up your new HOA lien on the property. Inexperienced buyers, who'd otherwise take care of your neighborhood problem, might drop out of the closing to find a "clean" property.

The best way to get your property back to "performing status," is to get a quality buyer of the property to close on it.

IF IN QUESTION, PAY THE LAWYER AND HOPE YOU GET GOOD ADVICE
PetunkaM
(Florida)

Posts:1000


08/28/2011 4:40 PM  
Kelly,

Simply amazing. Are you a fortune teller also?

KellyM3
(North Carolina)

Posts:1486


08/28/2011 4:45 PM  
Why yes, "Petunka."
KellyM3
(North Carolina)

Posts:1486


08/28/2011 4:51 PM  
Petunka,

I like your "cut n' paste" knowledge. Svelte.
SheliaH
(Indiana)

Posts:3057


08/29/2011 9:02 AM  
Interesting question - we have a similar situation in our community and are also trying to figure out what to do. In our case, the deceased had a son who lived in the unit for a "hot minute" and then moved out. We don't know where he is or if there is other family, and no one's filed anything in probate court. We put a lien on the unit, but don't know if there is a mortgage, so the house sits and sits.
PetunkaM
(Florida)

Posts:1000


08/29/2011 9:18 AM  
Shelia,
perhaps the county tax records would reveal something?
SheliaH
(Indiana)

Posts:3057


08/30/2011 5:45 AM  
PetunkaM - thanks for the suggestion. Our attorney did check, but for some reason, nothing substantial came up (it may be the records are being updated and don't have the information we need right now).
PetunkaM
(Florida)

Posts:1000


08/30/2011 6:05 AM  
Shelia,

Yes, usually tax records only say if the taxes have been paid but they do not always say by whom. But if the house is mortgaged it should be attached to the deed and recorded in the county. Has your attorney suggested proceeding with foreclosure?
SheliaH
(Indiana)

Posts:3057


08/31/2011 7:39 AM  
PetunkaM - that's one of the reasons we got the lien. We figured if an estate was ever opened up in court, our lien would have to be addressed ibefore the house could be sold (I think the son's disappeared in part because he knows this house is in a HOA and perhaps he doesn't have the money to pay any fees). If it doesn't happen (and frankly, I doubt it will), we can foreclose (state law recently changed to allow HOAs to move on liens within 90 days instead of waiting a year). I will talk to our attorney again - thanks again for the suggestions.

MelissaP1
(Alabama)

Posts:9134


08/31/2011 8:37 AM  
Be careful before proceeding with a foreclosure. Find out if the bank is doing one first. Should be in the classified section of your local newspaper under LEGALS. Which is published at different times in the week. Your HOA does NOT want to foreclose if the bank is in the process. Otherwise your doing the work of the bank. The bank ALWAYS gets paid first even if the HOA does the foreclosure or not. It's whatever is left over (if any) that is used to pay off debts like liens etc...

The HOA does NOT want to end up with this property. The HOA just needs to stop the bleeding.

Former HOA President
KellyM3
(North Carolina)

Posts:1486


08/31/2011 10:49 AM  
Melissa is correct about sizing up a pending foreclosure. An HOA will not collect, many times, if full foreclosure process reaches its conclusion. However, the "bleeding" that needs to stop is the non-collection of HOA income from that property. The HOA doesn't want to end up with the house but if it doesn't protect its cash flow against default, other home owners may be "inspired" to test the mettle of the HOA by choosing not to pay.

My HOA is in this exact same boat, only we have a deed now. Yuck all the way around.
CynthiaF


Posts:0


09/01/2011 6:05 PM  
I disagree. Foreclosure does not wipe away any liens - that is what a lien is for - it stays WITH the property. Now that the bank owns the property, it is their problem. I know, because I bought a house with a lien on it - we found it in the title search. My mortgage broker wanted ME to pay it to get it over with - I should them the bank need to re-think their position - the bank paid the lien and THEN the title was clear.

However, I am not sure what moneys the original poster is losing by not renting the house. When the prior owner was alive he didn't pay them anything to the Board/HOA live there - he paid his bank. If the poster means that HOA dues are the 'much needed income' than the HOA can obtain payment of the dues from the bank (owner) if they foreclose. Our Covenant reads, "...each assessment... shall be the personal obligation of the Owner of the Lot at the time when the assessment fell due.

It is the same thing if a credit card company or hospital placed a lien on the property. If the bank forcloses - they get the property back ... along with all the liens attached to it. So whether a flesh-and-blood person 'owns' the property or a bank 'owns' the property - the entity who 'owns' the property pays the assessment/dues.
MelissaP1
(Alabama)

Posts:9134


09/01/2011 6:49 PM  
Something is fishy if YOU are paying off a lien to purchase a house. Somewhere and somehow someone was trying to pass the buck and get out of it. Which I've heard stories of and question the abilities of the realtor. If the bank foreclosed on it, then they got paid first. It's the extra money from that sale that goes to pay off any filed liens/debts. If they didn't get enough money off the sale, they take a loss. The bank should have been responsible for handling the lien issue. Unless it was taken over by HUD. If this was a HUD (Housing and Urbarn Development a government agency)house, then there probably was a tax lien you paid off. HUD handles things differently than a bank.

We foreclosed on a house years ago. The buyer at the auction decided not to buy it. The bank got the property back. Then a few months later it became a HUD home. Which is where many of those "Get rich buying homes etc.." infocommercials base their theories on. They pay off the liens or tax liens on the property to own it. It's not what they actually advertise on TV but it does happen. This is slightly different than bank foreclosures. These are typically Tax foreclosures. Owner's who haven't paid their property taxes.

Former HOA President
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