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1/2/2012 - Homeowner’s Association Foreclosure by Mark Stopa

Did you know your home/condo can be sold at a foreclosure sale even if you’re current on your mortgage payments? Or even if you own your home/condo free and clear? I’m not talking about nefarious acts by a bank (this time). Rather, foreclosures can happen in Florida, consistent with the law, if you live in an association and you fail to pay your association dues.

Given the nature of my mortgage foreclosure defense practice, I’ve seen this dynamic many times. Typically, the homeowner: (i) doesn’t realize he/she is behind on association payments, then gets sued for foreclosure; (ii) doesn’t think he/she can afford those payments and gets sued for foreclosure; or (iii) wrongly presumes an association foreclosure lawsuit can be defended like a mortgage foreclosure case. No matter the situation, the homeowner is making a mistake that must be avoided. Quite simply, you can’t fall behind on association payments.

Let’s put it this way – even though I make my living charging attorneys’ fees, I do everything possible to prevent/turn away these cases, for a variety of reasons:

First, unlike mortgage foreclosure cases, there often aren’t any defenses in a foreclosure case brought by an association. Yes, sometimes the association attorneys charge ridiculous attorneys’ fees, but that’s not going to defeat a foreclosure, it’s just going to reduce the amount of the judgment. Call me crazy, but I don’t like charging attorneys’ fees if I don’t think I’m going to help a client.

Second, foreclosure lawsuits brought by an association tend to go much quicker than mortgage foreclosure cases. If you think delay will be a by product of defending an association foreclosure, you’re probably wrong.

Third, getting current on association payments isn’t nearly as daunting as getting current on a mortgage - often it’s just a matter of a couple thousand dollars, perhaps less. Although that’s a lot of money for some people, it’s a small price to pay to avoid foreclosure and keep living in your home (especially if you have an attorney defending a mortgage foreclosure case). Plus, unlike mortgage foreclosure cases, where a few thousand dollars in attorneys’ fees for the bank’s attorney are a drop in the bucket compared to the total amount owed on the mortgage, thousands of dollars in attorneys’ fees in association cases make a big difference in the total amount owed. In association cases, it’s almost always best to stop the bleeding as soon as possible.

Fourth, the amount you owe your association will go up astronomically if you don’t stay current. By the time the association tacks on include late fees, penalties, interest, and attorneys’ fees, $1,500 in association dues can easily become $3,000, $4,500, or more. Then, if you have to hire a lawyer to defend the case, you’re paying your own lawyer while you’re also incurring more fees to the association’s lawyer. Again, I like getting paid, but collecting fees in a situation like this rarely behooves the client. I’d rather see homeowners keep the money they’d pay me and use them to get current with their association.

The combination of these factors cannot be overlooked. Association foreclosures go quicker, there are fewer defenses, and they’re very expensive to defend, especially compared to the total amount owed. Don’t lose your home to a foreclosure by your association. And don’t let your unpaid balance get so out of hand that you get sued – you’ll win up paying far more than you otherwise would, and there’s probably not much a lawyer can do to change that.

Mark Stopa

Source  - Mark Stopa 12/31/2011

Related Article - A Heads Up to Delinquent Homeowners 3/12/2011

Peter Schulz - Editor - Email TCM

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