Florida Facing Bank Foreclosures In Condo Sector Enforced by the Homeowner’s Association
Posted in Bank Foreclosures, March 10th, 2010
The homeowner association, to force people to clear their dues and maintenance fees, is imposing a process of reverse foreclosure. Due to an increase in the bank foreclosures in Florida, this process is enforced in the condo sector.
Over 60 percent of the HOA associations are facing a problem with default fees in this foreclosure situation when, just like townhouse and single-family foreclosures, condo foreclosures in Florida also rose. In a report, they said that over 50 percent of the homeowners were defaulters by two months, as they failed to clear their maintenance fees and other dues. This is the reason that many of the households are getting foreclosure notices. However, the banks are not completing the entire procedure of foreclosure neither are they taking repossession of these homes. They are doing this deliberately to avoid paying the maintenance, and other fees to the associations.
Under the procedure of reverse foreclosures, these HOA associations are filing for foreclosure action for those household which failed to pay their dues. They are opting for this action as they are failing to get these payments from the banks and trying to get money from the lenders to bear with their increasing costs. However, in this procedure, the associations do not have the right to sell their properties. In court, they are pleading for the condo units to be given back to the previous owners so that they can claim the maintenance and other fees that are still unpaid from the lenders.
As legislators disapproved of their claims to hold the lenders responsible till their homes are repossessed by the banks, these associations are taking the help of this reverse foreclosure procedure.
Ben Solomon is a lawyer with Association Law Group. He filed for the first reverse foreclosure in Florida for the Keys Gate Homestead master-planned community and is of the opinion, that to survive in this foreclosure scenario HOAs need to take legal help.
Prospective buyers are cancelling their plans to buy the condos after hearing of these association dues. These dues are one of the main reasons for the recent increase in foreclosures in the condo sector, as the owners are failing to sell their condos even after asking for higher prices to cover their dues.
However, even after forcefully taking back their titles, the owners of the condos may refuse to pay those dues for the last 12 months, as that they are responsible only to pay the dues of the last six months till the banks foreclosed.
