Have a Finance Question? Ask a Financial Expert Online.
When you purchase a property, you purchase it with all outstanding debts against it. And yes you would be responsible for the back HOA fees.
One suggestion however - did you have a title search performed at the time you obtained the property? If yes, you may want to contact the title company. It is their responsibility to determine that there is a clear and clean title to the property. They may be willing to pay those HOA fees since you did not purchase a clean title. This is what you are insuring for when you pay the title insurance company.
I know this is true with back taxes and mortgages. I cannot be 100% sure that HOA fees would be covered under it, but it makes sense if you do not have a clean title because of these fees that the cost would be picked up by the title insurance company.
If the title insurance company indicates it is not within their coverage requirements, I would recommend then that you pay the fees. Then sue the previous owner, even if the owner was a bank because of foreclosure. These fees outstanding should have been disclosed to you at the time of purchase since they would have been known to be outstanding. Depending on the dollar amount you might be able to accomplish this in small claims court which means very little cost to you. You do not need a lawyer to go to small claims court since you are an individual. The bank would be required to have a lawyer as a corporation and they may elect to pay the HOA fees rather than the legal fees required to fight it if the amount is not significant.
Hope this gives you some ideas. If you want more definitive answers I would recommend that you either post the question on the legal forum or consider doing a one hour consultation with a lawyer to determine your legal rights.
The laws differ from state to state, and this seems contrary to the info in FL statutes section 720. For instance, NV has a 9 month clause, where buyers of foreclosures only have to pay the last 9 mo's of overdue fees, AZ, where buyers do not have to pay at all. I'm sorry, but I do not accept your answer since it does not cite FL law. Perhaps I need to consult a FL real estate lawyer. Thank you though.
The Florida HOA statutes can be very confusing as there have been several updates/changes in the last 2yrs. In this case, it would depend on the type of property it is. If it's a condo, there is a 6mo priority lien and a SFR would have a 12mo priority lien. What that translates to is this. If the foreclosure date was 1/1/2010, the bank would be liable to pay all HOA dues back 6mos from this date incl reasonable legal fees to the HOA (condo). If it was a SFR, then they would pay back to 1/1/09 of all dues, late fees, interest, legal fees, etc. When you closed escrow, the title company would have had a demand from the HOA and paid everything legally owed to them to clean the slate for you, the new owners. The HOA likely have a ledger of past due amounts from the old owner that predates these foreclosure statutes.
Those amounts are only collectible from that prior owner and they cannot legally apply any payment made by you to those prior amounts. The date you closed escrow and forward is all you're responsible for. period.
Hope this is helpful.
I just realized that you may not be able to reach me to give me the citation since I already accepted, so in case, my email address is XXXXX@XXXXXX.XXX. I will add a bonus if you respond.