Q: Several units in our condominium are in foreclosure. The association has placed liens on these units to recover many months' worth of unpaid fees. I understand that the lender must pay only six months' worth of unpaid association fees. Does the bank have to pay all the back fees before it can sell the unit to a new owner?
A: When the bank forecloses, all past delinquent amounts will be lost, erased and eliminated except six months of fees that the bank may be responsible to pay. The new buyer is not responsible for any past fees, late charges or legal costs.
Foreclosures mean higher costs for others
Q: Currently we have 16 foreclosed homes in our community, and there are likely to be more. Do the rest of us have to make up the delinquent fees and pay for the landscaping and upkeep on these homes?
A: Yes. The rest of you must make up the lost collections and the cost of maintenance. Your association has no source of funds other than the unit owners' monthly maintenance. Your budget assumed everyone would pay the fees.
Strict collection policy can help reduce losses
Q: Two condominium units in our association have undergone foreclosure because their owners didn't pay their mortgages. Our association is out $15,500 in delinquent maintenance and attorneys' fees. It looks as if all we'll get is $1,500. How can we protect ourselves in the future?
A: Your association stands second in line behind the mortgage lender. If the lender forecloses, it's too late for you, the association, to recover most of the delinquent fees. A strict collection policy should be established to keep the losses as low as possible. I recommend that liens be filed within the first 60 days after a unit is late in paying, and foreclosure start 30 to 60 days after the lien is filed. Shorten the wait time for delinquent accounts to pay or for the home to be sold.
Richard White is a licensed community associations manager. Write to him c/o Community Living, St. Petersburg Times, P.O. Box 1121, St. Petersburg, FL 33731. Sorry, he can't take phone calls or provide personal replies by mail, but you can e-mail him at CAMquestions@cfl.rr.com. Please include your name and city. Visit him online at talkwithcam.com.