Kirk Adams : Hi - thanks for looking me up! Bear
Kirk Adams : Please bear with me a moment while I review this.
Kirk Adams : Ok Ellen - - thanks for your patience.
Kirk Adams : 1) The best way to determine the legal status of the unit would be to have an attorney perform a title search to see who the lienholders are, the priority of those lienholders, amounts owed, etc. This would include mortgage lenders, judgment creditors, etc. This is generally inexpensive - - $300-$400, usually. Also, you or an attorney should look at the bylaws or CC&R's to see if the HOA has priority over all other liens - - including the mortgage liens. If so, that would give the HOA priority over all other creditors, which would be great and make foreclosure a viable option for the HOA.
Kirk Adams : 2) IF the HOA is the first lienholder based on the lien for dues, then the fastest way to resolve this issue would be to foreclose and sell the property.
Kirk Adams : "Covenants, Conditions and Restrictions" - - the rules of the HOA.
Kirk Adams : 3) Again, if the HOA is the first lienholder, it would be entitled to be paid its fees/unpaid dues before any other creditor. However, if the HOA isn't first, the ability to recover would depend on its lien priority and whether there's any money left from the sale/foreclosure of the property after the lienholders in front of the HOA are paid in full.
Kirk Adams : Hopefully, the HOA did provide in its' bylaws/rules that it has first lien against all of the properties for the fees/dues/maintanance. If so, this lien takes priority even over the mortgage loan.
I'm looking at the HOA's bylaws and can't find the phrase "first lien holder." Is there a particle article that deals with foreclosure or default on fees?
Kirk Adams : It could be anywhere, literally. But, it should be in the section that discusses dues, etc.
Kirk Adams : It should say something like the dues constitute a priority lien, etc.
Kirk Adams : IF you look through the document and don't see anything, if you have a board attorney, ask him/her. If not, if you have an attorney perform a title exam, you could ask him/her to review that as well to see where you stand. ALSO, there may be a document filed in the land records (like the restrictive covenants) that provides the HOA's lien priority.
I don't see anything about priority lien in the bylaws so I will need to bring the document to an attorney. Where would I find land records? Is that the same as recorded deeds?
Kirk Adams : Yes, it's the same.
Kirk Adams : Your local county clerk's office will maintain the property records for the county.
Kirk Adams : You or an attorney can search there for any liens on this particular property, including whether there's a priority lien filing for the HOA.
A quick glance through the bylaws seems to suggest that the HOA subordinated collection of monthly fees to something called "permitted mortgages," which might suggest that the bank has first crack at collecting money from the abandoned property. Does that make sense?
Kirk Adams : Yes. it makes sense - - and it sounds like that the mortgage lien is probably ahead of the mortgage.
So do we have any recourse with the bank? The bank is suing the estate of the former owner (who died) in Common Pleas Court, which might take months to be adjudicated. Can we join the suit or at least be informed of its progress? If we contact the bank, are they obligated to work with us/communicate with us?
Kirk Adams : That means that the HOA's ability to recover monetarily is behind the bank and would only happen if the bank is paid in full.
Kirk Adams : IF the lender has already sued, then you could join the case as an interested party and have your rights adjudicated along with the lender.
How do we join a case?
Kirk Adams : However, if the property is underwater (debt more than the property's value), then recovery of any money due would be tough to obtain.
Kirk Adams : You would actually have to file a legal document known as a "joinder" and ask the court to allow you in.
Who owns the abandoned property--the bank that holds the lien, the estate of the deceased, or the HOA?
Kirk Adams : The estate of the deceased should own the property UNTIL the bank is granted authority to foreclose/sale the properety. Then, there will be a new owner at the sale - - which will be whoever purchases the property.
As the condo association which includes this unit, do we have any legal right to require the bank to keep us apprised of its actions? After all, there is common property (basement, attic, roof, front lawn and walk) owned by the entire HOA. In other words, how can we become an active party in whatever's happening with this unit? As of now, we receive no written or oral communication from anyone and feel quite helpless and marginalized.
We don't even have a person's name or phone number to connect to.
Kirk Adams : Joining in the lawsuit will accomplish that.
Can a non-lawyer file a joinder? If so, with whom do we file?
Kirk Adams : If the lender has filed suit, it's really best to try and join as an interested creditor.
Kirk Adams : No.
Kirk Adams : The condo association would have to have an attorney.
OK, I'll report all this to our board and recommend that we ask our attorney to file a joinder to join the lender's suit. I will also ask him to review our bylaws to ensure that we don't have a priority lien. Then we'll have to use our powers of moral suasion and letter-writing to push the bank to move expeditiously to resolve this issue so we can start collecting fees again.
Thanks for your help! How can I print out and/or save our conversation?
Kirk Adams : Yes, that's likely the best course.
Kirk Adams : You should be able to print the page from your web browser or you can copy and paste the conversation in your word processor (MS Word)
OK, I'm going to sign off now. You've been very helpful. I'll give you a high rating!
I need you to close the session so I can rate our session.
Kirk Adams : Thank you for allowing me to help!!
Kirk Adams : Please let me know if you have any additional questions.
Kirk Adams : Hi -
Kirk Adams : You can now rate my response. I had the rating feature disabled. Sorry for the confusion!