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Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 45982
Experience:  32 years of experience practicing law and a businessman.
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I am on the board for a HOA in Houston, Texas. About 2 years

Customer Question

I am on the board for a HOA in Houston, Texas. About 2 years ago the HOA got ownership of a unit that had been under contract with a buyer/occupant who failed to pay monthly dues for several months so the HOA filed to foreclose on the unit. Here is the dilemma. Although the HOA has been paying the property taxes and is the owner of record with the Harris County Appraisal District the past owner/mortgagor does not respond to any attempts to settle. The HOA is currently renting the unit and feels it cannot sell the unit to the renter as the past/mortgagor could come back and make a claim or file a judgment and reestablish ownership of the unit. There is no evidence of any contract being filed with the county clerk as to the mortgage details with the buyer that defaulted. What can the HOA do to get first lien position and then sell the unit?
Submitted: 1 year ago.
Category: Business Law
Expert:  Richard replied 1 year ago.

Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good afternoon. If the HOA has foreclosed two years ago and is now the owner of record, the HOA need not worry about the former owner. Under Texas law, a homeowner whose property was foreclosed on by an HOA and sold may redeem the property, depending on the type of property and whether such property is intended as a homestead or an investment property, but can only do so for a limited time period. Section 209.011 of the Texas Property Code affords homeowners the right to redeem the property after an HOA foreclosure sale. A homeowner of a residential property that is a single family unit may redeem a property sold as a result of an HOA foreclosure within 180 days after the date on which the association mailed the notice of the sale. The owner must pay the subsequent purchaser the full foreclosed price, attorney's fees and costs, and pay 25% above of the sale price. A purchaser of an HOA foreclosed property must not encumber the property or sell transfer it to anyone other than the homeowner within the 180-day period. Since it's been over 2 years, the HOA need not worry about the former owner and is free to sell it to the current tenant.



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Customer: replied 1 year ago.

I have the Trust Deed of the HOA how do I send the attachment to you to look at.

Expert:  Richard replied 1 year ago.
Hi there. You can either post it on this forum or somewhere on the internet like dropbox.com and send me the link.
Customer: replied 1 year ago.

Here is the copy of the sub-file listed with Harris Co Clerk Office -- Will this help?


 









































R54031408/22/1995RIVINGTON TWNHM
NOTICE
















Grantee:NICHOLS CORBY ALLEN ETAL
Grantor:NICHOLS CORBY ALLEN ETAL
Grantor:YAMADA YOSHIKO ETAL


U0097
2505041353
R54031608/22/1995RIVINGTON TWNHM
W/D












Grantee:NICHOLS CORBY ALLEN
Grantor:YAMADA YOSHIKO


U0097
2505041359
X20838211/21/2003WEST MANDELL PLACE
W/D




























Grantee:NICHOLS CORBY ALLEN ETAL
Grantor:NICHOLAS CECIL A TR ETAL
Grantor:NICHOLS CORBY ALLEN ETAL
Grantor:PANCIOLI S N TRE ETAL
Grantor:PANCIOLI STEPHANIE N ETAL
Grantor:SNYDER GINGER P TRE ETAL


L0003
B0006
INSTR
5578642059
Y38289804/08/2005RIVINGTON TOWNOMES
TRSALE
















Grantee:NICHOLS CORBY ALLEN
Grantor:BUTLER RICK S ETAL
Grantor:RIVINGTON TOWNHM AI ETAL


U0097
2RP003931296
Expert:  Richard replied 1 year ago.

The two year period has lapsed, so the former owner has no rights. No renter would simply need to pay the existing lien to have it released, but the former owner has no further rights of redemption.

Customer: replied 1 year ago.

"No renter would simply need to pay the existing lien to have it released,"


 


I don't understand the renter part of your statement. Please explain.

Expert:  Richard replied 1 year ago.
I'm sorry...that was a typo on my part. I intended to say that any buyer, including your existing renter, would need not worry about the prior owner; rather would only need to pay the existing lender to release the mortgage lien.
Customer: replied 1 year ago.

I'm sorry if I didn't make the situation totally clear. The existing lender is the original owner who privately financed to the second owner who defaulted and didn't pay the HOA dues causing the foreclosure in the first place. The HOA notified owner #1 who has never responded thus the Deed of Trust to the HOA.

Expert:  Richard replied 1 year ago.

Let's go back to the beginning.....What are your specific concerns now? If the HOA is now the owner, it can sell to anyone. No prior owner has any right to any redemption.

Customer: replied 1 year ago.

I guess that has been the dilemma all along. Another attorney was stating that there was a 4 year statute of limititations and that owner #1 (the private lender to the buyer that defaulted) could come back and retain right of ownership keeping the HOA from selling it. Sorry for the confusion. So you are saying that the HOA has total ownership rights and there is no one in the past ownership lineage that has any claim and therefore we can sell at whatever price we want?

Expert:  Richard replied 1 year ago.
If the HOA has foreclosed, then there is a 180 day right of redemption. After that, there is no further right to redeem.
Customer: replied 1 year ago.

Thank you for the clarification. I just wanted to make sure before I report to the HOA as we desire to sell the unit.

Expert:  Richard replied 1 year ago.
You're welcome...it's my pleasure to help!
Richard, Attorney
Category: Business Law
Satisfied Customers: 45982
Experience: 32 years of experience practicing law and a businessman.
Richard and 4 other Business Law Specialists are ready to help you
Expert:  Richard replied 1 year ago.


Thanks so much for the positive rating and the bonus! I appreciate your generosity and the
opportunity to serve you! If I can be of
assistance to you in the future, just look me up and I will be happy to help!

Customer: replied 1 year ago.

I just got off the phone with the Management company and I may not have presented the correct scenario. The manager states that the problem all along was that although the HOA foreclosed due to non-payment of HOA dues, the private lender for the buyer has never foreclosed on the unit. Does the private lender have any recourse or would they have to protect their interest when the HOA foreclosed? Sorry about that, I hope this is not a major imposition.

Expert:  Richard replied 1 year ago.
No problem......The private lender has no rights under than as a lender....meaning that they can foreclose the lien, but if you sold the property and the lien was paid, they would have no further rights to the property.
Customer: replied 1 year ago.

Thanks so much again. Hopefully, this should answer once and for all. If I want to use you in the future how do I do so?

Expert:  Richard replied 1 year ago.
You're welcome...I'm here to help. You can always address your question to "SeekingtoRenderAid" and I will get it. :)

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