Finance

Have Finance Questions? Ask a Financial Expert Online.

Ask an Expert,
Get an Answer ASAP!

Finance
This answer was rated:

We bought a foreclosed house from a bank. The HOA wants us

We bought a foreclosed house...
We bought a foreclosed house from a bank. The HOA wants us to pay the unpaid HOA fees and penalties of the previous owner. We have not made an HOA payment yet because the HOA would use our payments against the previous liability. Months after we took ownership, the HOA filed a lien and wants us to pay all related costs associated with that as well. Can you give me the law on this matter?
Show More
Show Less
Ask Your Own Finance Question
Answered in 6 hours by:
4/20/2010
Gerri A Harrison CFP EA
Gerri A Harrison CFP EA, Financial Advisor
Category: Finance
Satisfied Customers: 252
Experience: Over 10 years working with clients in the areas of personal finances and financial education.
Verified

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.

 

Ask Your Own Finance Question
Customer reply replied 7 years ago

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.

Eric
Eric, Financial Manager
Category: Finance
Satisfied Customers: 559
Experience: Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.
Verified

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.

Ask Your Own Finance Question
Customer reply replied 7 years ago
<p>Eric,</p><p>Thank you. It is an SFR. I would like to accept your answer, if I could just have you cite the information you've given me so that I can present it to the board as such, please. </p><p>What I see is that the bank is liable for HOA dues back 12 months from the date of the foreclosure, and I understand the reasoning is that when people stop paying the bank, they also stop paying their HOA at that time, if not sooner...and sometimes banks drag out the foreclosure process, therefore they become liable for the 12 month's dues. Your firm response is that the new owners are only liable for HOA fees from the date of purchase forward, correct? </p><p>I forgot to mention, I leave for the board meeting in 2 & 1/2 hours! </p>
When a foreclosure takes place, it's like drawing a line in the sand. The statute in Florida is for the bank to pay 12mos of dues and legal fees, etc back 12mos from that foreclosure date. That protects the HOA from getting nothing and the bank from having to payoff the entire history of the HOA defaulted amounts. Basically, once that 12mos is paid, then whatever is owed prior to that is a loss to the HOA. (unless they can collect it from the prior homeowner). The title company and your title policy when you purchased the home is responsible to clear title and that includes the satisfaction of the HOA lien. If the HOA is trying to collect past owner fees from you, they cannot legally do that. You have nothing to do with this property prior to when you purchased it the prior obligations of the former owner. The bank should have taken care of the 12mo priority lien and then it's over. You would only pay for the time that you have owned the property and it's not retroactive.
Eric
Eric, Financial Manager
Category: Finance
Satisfied Customers: 559
Experience: Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.
Verified
Eric and 87 other Finance Specialists are ready to help you
Ask your own question now
Customer reply replied 7 years ago
I need the citation, please. Unless the board sees the citation, I'm afraid they will still question it.
Customer reply replied 7 years ago

Eric,

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 [email protected]. I will add a bonus if you respond.

Greta

Unfortunately, I cannot send direct email to you and giving a citation specific is not really possible. I hope that all goes well with the HOA. They tend to not understand the law very well and are is such desperation for money, that they will try anything to get paid. The statutes are clear in terms of the first mortgagee (bank) foreclosing a lien and if they were paid their 12mo priority lien, then it's over and they cannot collect anything further. Unfortunately for the HOA, its a loss. They don't like to throw in the towel like that.
Ask Your Own Finance Question
Ask Eric Your Own Question
Eric
Eric
Eric, Financial Manager
Category: Finance
Satisfied Customers: 559
559 Satisfied Customers
Experience: Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.

Eric is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Rakhi Vasavada

Rakhi Vasavada

Financial and Legal Consultant

2,608 satisfied customers

Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years

Megan C

Megan C

Certified Public Accountant (CPA)

2,218 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

Manal Elkhoshkhany

Manal Elkhoshkhany

Tutor

1,919 satisfied customers

More than 5000 online tutoring sessions.

JKCPA

JKCPA

CPA

844 satisfied customers

Bachelors degree and CPA with Accounting experience.

Eric

Eric

Financial Manager

559 satisfied customers

Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.

R. Klein, EA

R. Klein, EA

Accountant

480 satisfied customers

TurboTax Expert. QuickBooks Certified Pro Advisor

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

332 satisfied customers

NASD Licensed Rep, 1997-2001, Business Attorney

< Previous | Next >

Related Finance Questions
I'm getting ready to get a home equity line of credit. I own
I'm getting ready to get a home equity line of credit. I own my home outright and have no other liens. I plan to get about $ 50,000 line of credit, which is about 30% of home value. I plan to use proc… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
I have a Texas LLC and we sell agricultural parts for
I have a Texas LLC and we sell agricultural parts for tractors, we have a contract manufacturer make our proprietary parts, then sell them to farmers. Farmers are obviously tax exempt, but are we also… read more
abci168
abci168
Principal
27 satisfied customers
Have a sub s corp rental properties fully depreciated wish
Have a sub s corp rental properties fully depreciated wish to do a joint venture not a sale or transfer of property.. How can this be done without triggering capital gains? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I have a looming $3000 in s/t cap gain & 34,000 in l/t cap
I have a looming $3000 in s/t cap gain & 34,000 in l/t cap gains & $100k in cash from stock sales.Best way to reduce the tax. Can't I take l/t gains over time. My income this year's was about 35K. I a… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
My wife has a life insurance policy taken out in 1951 by her
my wife has a life insurance policy taken out in 1951 by her parents. it was from the Worcester county institution for savings in Worcester, ma. … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
We are entering into a 5-year lease for our small business
Hello! We are entering into a 5-year lease for our small business and trying to properly account for the leasehold improvements in QB (i.e. architect fees, permit fees, construction costs, and equipme… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
I inherited my father's IRAs. I have accounts with Fidelity
I inherited my father's IRAs. I have accounts with Fidelity and Schwab. One of my Schwab accounts is titled Inherited; the other is listed as a Roth. The Fidelity account is listed as an IRA. My quest… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
What is the difference in payments and total interest on a
What is the difference in payments and total interest on a car loan total of $32,000.00 paid off in three years? Interest rate 4.99% vs 2.99%… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
How to negotiate with auto insurance (Progressive) the
how to negotiate with auto insurance (Progressive) the settlement prince on their offer to total my vehicle after the accident. I see only two vehicles of the exact same kind for sale by the dealers o… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,458 satisfied customers
I currently have a 20 year home equity loan....i'm looking
I currently have a 20 year home equity loan....i'm looking to lower the monthy payments doing a refi HARP loan in Pennsylvania...is that possible with no appraisal?… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
I am a 2 person LLC (partnership) with only 2 part time
I am a 2 person LLC (partnership) with only 2 part time employees (15 hours per week each) and wanted to know what would be the best way to contribute to a retirement plan for the owners only?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I am an international student in Louisiana. I have been here
I am an international student in Louisiana. I have been here since 2013 and have NOT filed taxes at all. Do I have to wait until next year's tax season to file taxes for all my past years, or can I do… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,458 satisfied customers
I am about to enter a settlement for a sizable amount. For
I am about to enter a settlement for a sizable amount. For this example lets use $200k, 30% will go to my lawyer and 40% to tax leaving about $60k over. The payment will be made to the lawyers trust t… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
How can we use SBA loan or American bank credit to expand
How can we use SBA loan or American bank credit to expand internationally? 1) for same business segments as we have in USA 2) Totally unrelated business segments than we have in USA?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,458 satisfied customers
I at a California S Corp. due to an ERP glitch a large
I at a California S Corp. due to an ERP glitch a large amount of consignment inventory was not recording in our GL. How would I record this inventory now? How will it affect taxes?… read more
taxmanrog
taxmanrog
Master\u0027s Degree
698 satisfied customers
What costs can be capitalized as leasehold improvements? Can
What costs can be capitalized as leasehold improvements? Can architect and engineer fees be capitalized?… read more
Charles Greiner
Charles Greiner
Owner
Bachelor's Degree
2,436 satisfied customers
How can I obtain Oil Pension Checks? I need to know the Best
JING sent me a message from Lombardi Publishing Corporation.… read more
taxmanrog
taxmanrog
Master\u0027s Degree
698 satisfied customers
My daughter has a small Roth 3K.....she wants to get a
My daughter has a small Roth 3K.....she wants to get a "traditional" IRA thru her bank.....Can she have both or must she convert the Roth… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x