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Dimitry Esquire
Dimitry Esquire, Attorney
Category: Real Estate Law
Satisfied Customers: 41221
Experience:  JA Mentor, multiple jurisdictions, specialize in business/contract disputes, estate creation & admin
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I purchased a condominium that went into foreclosure last year.

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I purchased a condominium that went into foreclosure last year. In August 2012, the tenant filed bankruptcy and vacated the home. At that time, the HOA obtained a default judgement against the bank for $2,700, even though the bank had yet to take back the property at that point. The bank took the property back three weeks after the judgement was issued, in late September. Once I purchased the unit in March 2013, the HOA started the process of trying to collect the $2,700 from me. The attorney for the HOA has threatened to put a lien on the property if I don't pay the $2,700. Should I file a motion to vacate the default judgement, even though the judgement is against the bank and not me? This outstanding issue didn't surface in our closing processions, unfortunately.
Thank you for your question. Please permit me to assist yu with your concerns.

You mentioned that you purchased this property from the bank. Did you purchase it at auction, via short-sale, and what type of a deed did you receive? I am assuming that this lien that you are now exposed to did not appear on your title search prior to purchasing the property, correct?
Customer: replied 4 years ago.

I bought it from Fannie Mae after they had purchased back from the mortgage holder who walked away from it in August 2012. They purchased it at the County Sheriff's Sale in September 2012. It's a special warranty deed. No sir, it didn't appear on the title search prior to purchasing the property, because it was only a default judgement against Fannie Mae at that point. It's not yet a lien, but the HOA attorney is threatening to place one agains the property next week if it goes unpaid. The state, for what it's worth, is Delaware. Thanks.

Thank you for your follow-up, Chad.

A special warranty deed not provide the same protection as a general warranty deed. Such a deed only warrants that the grantor received title and that unless noted specifically in the deed, the property was not encumbered during their period of ownership. So if this lien was not recorded from the time it was lost to the bank and you bought it, the bank is not responsible for this debt. You, however, would be as you would have otherwise purchased this property with all liens and encumbrances on it that existed at time of purchase. In essence this is a situation where you purchased it with all debts, including this one, and as a consequence you would be liable for this lien, even if it has nothing directly to do with you.

I am sorry.

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Customer: replied 4 years ago.

Thank you for the quick follow up and explanation, it was helpful. It clarified the matter and now I will simply approach the HOA/Attorney and see if we can reach some sort of settlement. Thanks again.


You are most welcome, truly! Please be well!