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HOA fees and Bankruptcy

Discussion in 'Foreclosure, Repossession, Auctions, Short Sales' started by Cricker, Apr 16, 2009.

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  1. Cricker

    Cricker Law Topic Starter New Member

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    I am filing for bankruptcy - I'm letting my condo go after it's been on the market and in short sale and nobody has looked at it. My HOA is $406/mo which I have been paying b/c I was told I needed to until I file bankruptcy. I just found out via a bankruptcy lawyer that I shouldn't have been paying my HOA b/c any unpaid HOA fees would have been dismissed at the time of filing. Since my CC&Rs state they can sue the land/property or the owner, I was told that I will be responsible to pay the $406/mo until trustee’s sale is completed which will be 3 months after the start of the trustee’s sale. Does this sound correct? or do I really have to keep paying the HOA fee after filing bankruptcy?
     
  2. FlaRiptide

    FlaRiptide New Member

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    Is your condo near foreclosure? The HOA will most likely attach a lien to the home for unpaid dues. Either the mortgage company or the short sale buyer will end up paying if you don't. The HOA could also file for a judgment and garnish you wages, yet in my opinion this is less likely. As treasurer of my HOA, I find this process not as productive especially when a home is facing foreclosure or sale.
     
  3. Theresagail

    Theresagail New Member

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    NO- Once you file bankruptcy you are under a protection-- so no you should not pay for the fee's. if you are surrendering the condo etc.. the HOA fee's are tied to that condo--
     
  4. Cricker

    Cricker Law Topic Starter New Member

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    That's exactly what I thought but not so much. My bankruptcy attorney said after filing for bankruptcy, they could sue me for the new HOA monthly dues (if i don't pay them) until it's no longer my home. It's frustrating b/c I spoke with a different BK lawyer and he told me keep paying until file then i'm ok...and then one of the phone conversations w/ my current BK lawyer, she said to keep paying since I was living there (prior to filing BK) but that I could stop after I filed...but now that's not the case. Perhaps a law changed??? I dunno - but I do know I wasted $406/mo since Dec.
     
  5. Theresagail

    Theresagail New Member

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    No law changed-- Listen to your current attny-- keep paying up till you file ponce you file you are protected under the BK-- you are surrendering the property right? If you are planning to keep it then that is different but if your letting it go and your under BK there is nothing anyone can do this is considered unsecured debt
     
  6. FlaRiptide

    FlaRiptide New Member

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    The HOA fees go with the land. The property will not have a clean title. Eventually the mortgage company or the new owner will need to pay.
     
  7. Kim13

    Kim13 New Member

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    Arg. I'm in the same situation as you.
    I keep receiving billis from my HOA - the last one was $1500 plus.
    I contacted them a few months ago and told them foreclosure went thru in 2/09 and that i've been discharged from BK and my case officially closed on 3/16/09. They told me that they will continue to send me a bill because I am still listed on the land records. I asked around and was told that as long as i'm on the land record, they nor anybody else cares - I own it - even if the bank has taken it back. Its SO very confusing to me too! I contacted the BK lawyer I went thru and he says I have to pay him $250 for a consultation - because this is now a new situation. I don't want to have to fork over MORE money to have him give me some fluff (he was hardly helpful to begin with and as soon as we walked out of BK court, he was done with me). Someone else also mentioned a lien being put on the property -
    My concern, like you is, WHAT is the law.. what are our rights after filing BK/foreclosure and do we have to keep paying? It just makes no sense... but geez, I don't want to get hit hard with a bill later on down the road.
    Its tough living in limbo wondering what is the right thing to do... so I too would appreciate ANY advice. Thanks!!
    BTW, I called the HOA and they, as usual, gave me attitude then dumped me into VM and have yet to call me back. :mad:
     
  8. FlaRiptide

    FlaRiptide New Member

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    Unless someone with real estate legal knowledge jumps in with a definitive answer, this is my opinion:

    The dues go with the property. Thus, upon foreclosure the bank is now liable. If they do not pay, then when they sell the property it will be collected from either the bank (seller) or the buyer.

    I would suggest speaking with the HOA. They could file a judgment against the owner now prior to foreclosure in lieu of placing a lien. I as treasurer of my HOA would be willing to work with the owner. If the HOA is willing to not sue and just wait for the foreclosure, they will eventually get their payment from someone else. If the HOA would be agreeable to this, then you could withhold additional payments without fear of retribution.

    This same circumstance would apply in a short sale. In the short sale, the seller is off the hook for the deficiency if any. If a foreclosure, the deficiency liability is determined by state law.

    In the past month I have had three title companies call me asking for an estoppel for past due HOA fees. Our HOA had not sued or placed a lien on any of these. Upon inquiry with one of the title companies, I was told that they generally assume non-payment of HOA fees when a foreclosed property is sold. They need to insure a clean title. In all three cases, we received payment from the title company days following the provision of the estoppel.
     
    Last edited: May 11, 2009
  9. Kim13

    Kim13 New Member

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    I tried to speak to the HOA. This company is apparently notorious for being difficult. I found three pages of bad reviews on them on the web the other day and with my own past experiences simply trying to communicate with them - I agree.
    They don't seem to want to work with me .. more like they are just ignoring me and keep sending the bill.

    Just checked the land records again and also to see the status of the property. There is a contract on it now. Maybe thats some good news for me?!

    Foreclosure has already occured in my case.
     
  10. Theresagail

    Theresagail New Member

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    The HOA is in violation the Bankruptcy Stay-- They know who the lender is-- they need to start collecting from them -- Write a letter w/ to the HOA stating you have filed bankruptcy include the case number and the discharge date (discharge papers) along w. your attorney's info-- let them know if they keep trying to collect you will have your attorney file a complaint on them thru the bankruptcy courts for still trying to collect. Maybe they need to get sued!

    Who cares who has to pay the HOA fee's, this is no longer your responsibility- the house is foreclosed-- if they don’t understand that -- then you need to have your attorney sue them for violation of the bankruptcy rules!
     
    Kim13 likes this.
  11. FlaRiptide

    FlaRiptide New Member

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    Kim13,

    In your case it sounds to me as if foreclosure may have begun in Feb. of 2009. You would remain as owner of record until the foreclosure is finalized.

    Bankruptcy protects you from the HOA filing a judgment against you, yet I believe they retain the right to place a lien against the property for ALL missed dues and fees.

    Until the property is totally out of your name, the HOA has no other place to send their invoice. If you are presently living elsewhere than the property that is being foreclosed, then the HOA is indeed in violation of trying to collect from you at your "new" address. Yet, if they are sending the invoice to the property within the HOA which is being foreclosed then I would say put up with it but don't pay.

    Keep in mind, you may no longer be liable for the dues but they don't just disappear. The bank or new buyer will pay. The title company will make sure of this.
     
    Kim13 likes this.
  12. Kim13

    Kim13 New Member

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    Theresagail - I actually did write a letter to the HOA and including all that you mentioned. Their response was that i'm on the land records still - so they will continue to bill me. And my attorney doesn't seem to care anymore unless I pay him more $$.

    FlaRiptide - they are currently sending the statements to my PO Box - which I had given them to send what I thought would be my final billing statement back in January.

    Thank you SO much for the help/advice you have been giving me. I appreciate it so very much...thank you thank you thank you! You have really helped alleviate some stress!
     
  13. Theresagail

    Theresagail New Member

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    Next time you get a bill from them-- Write on the envelope no longer @ this box # and send it back -- You really dont need to be dealing w. these people anymore
     
    Kim13 likes this.
  14. notmyhome

    notmyhome New Member

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    update for hoa nightmare

    We are 2 years out from a BK. We are now being sued for the Hoa's from our property we included in our BK. I wanted to write because I have discovered what we are responsible for: Hoa fees FROM the date your BK was dismissed until the home is actually sold. We are not responsible for any fees before the date of protection, but a gap in the law allows the Hoa's to be collected from you until the bank gets your former home sold. Not ideal but better than the entire ammount.

    BTW I am not as lawyer.
     
  15. Kim13

    Kim13 New Member

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    I'm beyond confused now. Responsible for the HOA's or not?
    I just got a Warrent in Debt in the mail. The documents said I was to be in court the end of May. The HOA have taken me to court. They sent the documents to me AT the condo.. although they know I no longer reside there and have had no troubles mailing me bill after bill to my current address. The envelope got destroyed in the mail while the post office was forwarding it to my new address and it finally made it to my PO Box on 6/11.
    Unfortunately I didn't check my mailbox until 6/23. So basically a month from the court date. The docs say I have 30 days to dispute in writing.
    I'm not sure what to do.
    The attorney I had won't take a look at anything unless I pay him more money - which I don't have.

    I'm getting so much conflicting information: that the bankruptcy clears me of this debt vs. its still my responsibility until the bank sells the property.

    There has got to be one consistent law.. no?
    They are billing me some $1500 plus AND 6% interest on every month not paid. Plus its $400/month now for the HOA's. :confused:
     
  16. IhateHOA

    IhateHOA New Member

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    @ notmyhome: It sounds like I am going through the same exact thing you went through. Could you please tell me what you did and what ended up happening in your case. I would GREATLY appreciate it. Or anybody else that can help me!!

    I am now being sued for unpaid HOA fees from the time my BK was discharged (back in July 08) all the way up until Jan 2010. My BK lawyer never told me I would still be responsible for any HOA fees after BK for as long as the property is not foreclosed/sold and still under my name. I never even received any notices or bills from the HOA. I had no idea about this, I never even lived in my condo (always rented it out and as soon as I did my BK, I had the tenants vacate it). All of a sudden I receive a subpoena (mid NOV 09) to my current address, out of the blue, saying I must appear in court in JAN 2010 and present my financial papers (taxes, wages, bank accounts,etc) and that I owe $8000!! I talked to my BK lawyer, well a paralegal at the firm, and she told me somebody must have told me, which they didnt!!! no help from them. i sought out a free consultation with another lawyer and he just told me to try to negotiate the amount and try to ask to pay in installments. Also, I just looked up my property and saw that it was under contract on some realtor's site. So i called the listing agent and he said the property was sold Nov 3, 09. Cant the HOA place a lien and have the new buyer pay? Am i really going to have to pay this?? Also, it looks like they already sued me and placed a judgment..can they sue me without me knowing? Dont i have a right to defend myself? Please, somebody help me. I can't pay $8000. Any advice would be greatly appreciated :(
     
  17. jharris352

    jharris352 New Member

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    You should not pay. List your HOA fees in the bankruptcy. If listed initially the bankruptcy court will put a stay on them. Then when you discharge your bankruptcy they will go away with the property.
     

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