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Second opinion] In 2012, my HOA obtained a judgement against…

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Second opinion] In 2012, my...
Second opinion] In 2012, my HOA obtained a judgement against me for unpaid assessments, and "accruing assessments" in the amount of $3,673.In 2016, the attorney for the HOA served a rent garnishment on me, and the tenant". for a creditors claim of $6,249.57 "together with interest, costs, and other relief in this action against judgement debtor. The notice then states: 1. the judgement creditor has a claim against judgement debtor in the amount of $5,216.84 as of the date of the garnishment. 2. the rate of interest is 4.25 % on the principle sum of $3,673, and attorney fees and costs of $1543.50 from 2012( which matched the total of $5,216.44) The writ of garnishment does not state how the total of $6249.57 was arrived at.Last month I was serves a lien foreclosure notice stating that I had failed to pay the HOA dues assessments, collection charges, fines, late charges and interest in the amount of $20,698!!!I was floored because the dues are only $150 per month, and in less than a year the judgement amont had gone from $6200 to $20,000, which I have no chance of raising to keep my property.In trying to determine why the amount was so high, I just noticed that the 2016 garnishment had neglected to ad the $150 per month assessment into the calculation of the amount due.The garnishment failed in 2016 because of procedural errors by the HOA attorney. I can pay the amount claimed in 2016, but not the $20,000+ claimed due now.Because the amount due was incorrectly stated in 2016, can the HOA be held to the $6000+ claimed at that time in calculating my payoff to avoid foreclosure and satisfy the judgement.
Submitted: 8 months ago.Category: Business Law
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9/14/2017
Business Lawyer: legalg, Attorney replied 8 months ago
legalg
legalg, Attorney
Category: Business Law
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Hello! I will be reviewing your question and posting a response momentarily; if you have any follow up questions please respond here. Thanks!

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Business Lawyer: legalg, Attorney replied 8 months ago

A judgment can be modified or vacated due to mistake, inadvertence or neglect. This usually must be within 6-12 months of the issuance of the judgment. There is also what is called a "scrivener's error" so that if the error should have been clear to all sides, the court may deem it is a scrivener's error (typo, essentially) and modify the judgment accordingly.

However, since these are both "equitable" remedies (to do equity/justice) the court will look to the time lapse (the more time that has lapsed the less likely they are to modify/vacate), the responsibility/fault of the parties in creating the error, and any justifiable reliance on the judgment.

Otherwise, since judgments are preferrred to be "final" based on the "finality of judgments" doctrine, the court typically will not recalculate due to preventable error.

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Customer reply replied 8 months ago
Follow up question. This is an Arizona property.The HOA just served me with a lien foreclosure that included assessments and legal fees since they obtained the judgement in 2012 for $3500. The new amount is $20,000.
1. I was told that this action is incorrect because to include the added assessments and fees since the 2012 judgement would require a new judgement before a lien foreclosure action.Is that correct?
2. I purchased the property with a first and 2nd loan. I was told that in AZ, if the HOA forecloses, that the 2nd loan is automatically extinguished by the foreclosure sale. Is this true?Thanks!
Business Lawyer: legalg, Attorney replied 8 months ago

Yes that is correct (#1) -that is where the motion to vacate/amend would come in but that is highly unusual for a 5 year old judgment.

Loans are determined by priority; if the HOA lien is superior then that would extinguish the second loan. Please see:

http://www.azlawhelp.org/articles_info.cfm?mc=3&sc=20&articleid=214

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Customer reply replied 8 months ago
Re question # 2. To clarify.I have a first loan of $100,000, 2nd loan of $15,000, and the HOA is foreclosing for $20,000 of back assessments.The property is only worth $85,000.I am told that the likely outcome is that the 2nd loan will be extinguished automatically under AZ law, and the HOA will get title to the property subject only to the first loan. They can then negotiate a payoff with the first lender, or let the 1st lender foreclose to take the property back.It is important to me to verify if the 2nd loan, purchase money, is subordinate to the HOA in AZ will be extinguished by the HOA foreclosure. If this is true, I may try to negotiate a large discount on the 2nd to make it wothwhile to pay the HOA to keep the property. The 2nd lender would have the choice of receiving nothing at foreclosure or 20% payoff=$3000.So, will the second be foreclosed out at foreclosure sale? ( I am not concerned about deficiency judgement at this time)Thanks,Don
Business Lawyer: legalg, Attorney replied 8 months ago

It depends on priority; a second mortgage (not a first) is extinguished by the HOA foreclosure if the HOA lien is senior to the second mortgage. That varies based on the property - for example, when the lien/mortgages were filed.

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Customer reply replied 8 months ago
Was told AZ law makes all loans except 1st loans subordinate to HOA assessment liens. There is evidently no variation based on when the liens/mortgages were filed. ( Even purchase money 2nd loans are subordinate to the HOA dues) Can you verify if this is true?
Business Lawyer: legalg, Attorney replied 8 months ago
Those links above show that the priority of the lien is controlling for such purposes.
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Customer reply replied 8 months ago
Did not see anything in link re HOA having priority over purchase money 2nd loan. Just info on deficiency judgements, which I already know about.Not sure you understand my question. When HOA forecloses, will they get title subject only to my 1st loan, and the 2nd loan will no longer be recorded against the property? Was told this was AZ law.
Business Lawyer: legalg, Attorney replied 8 months ago
Please see 33-1807 specificallyA lien for assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments under this section is prior to all other liens, interests and encumbrances on a unit except:1. Liens and encumbrances recorded before the recordation of the declaration.So timing controls.
I cannot find a contrary statute that states otherwise.
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Business Lawyer: legalg, Attorney replied 8 months ago
That statute is herehttp://www.azleg.gov/ars/33/01807.htm
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