I have an issue/question I’d like to throw out into the ring and hopefully get some feedback from our members.  As (primarily) a Buyer’s Agent, I’ve sold a few REO condos with past due HOA dues.  In all cases, the total amounts due were debited from the Seller’s (Bank’s) side in escrow, which is logical.  The same thing would happen in a Regular transaction if the Seller was even one month behind in their dues.

 

Of late, I’m seeing HOA Boards taking a new approach to these (often large) past due balances.  Specifically, I’ve seen these boards filing Small Claims Court and in some cases Limited Jurisdiction Superior Court suits for these balances AFTER the Trustee’s sale (for those outside California, meaning after the Foreclosure has been completed).

 

So I guess my question is, A) Are Banks no longer paying the past due amounts in escrow; B) Will these HOA Boards go back and release the previous owners from these judgments after the unit sells again (and the dues are brought current by the lender); C) Doesn’t this (in whole or in part) violate California’s “one action rule” regarding foreclosures?

 

Thanks in advance.

 

Adam

www.AskAgentAdam.com

 

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Replies

  • I thought that the banks were paying HOA dues from the time of foreclosure till sale to new buyer, but that the amounts due from the previous owner were not paid by the bank. They are the first lien and when they foreclose they do not pay off the junior liens. Is that not correct? As far as the HOA going after the previous owner, I had not heard of that, but I do know that many complexes in Ca have financial problems becuase of the high number of foreclosures.
  • Most of my properties have HOA liens on them when assigned to me. The banks pay them so the lien can be released.
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