Challenges Faced by Condo & Homeowner Association’s

Foreclosure process
Posted by Mark Martella on Fri, May 10, 2013 @ 10:15 AM

One of the challenges faced by condo and homeowner association’s is maintaining properties while they are in the foreclosure process and not receiving any dues or assessment payments. Often, the owners have moved out but the foreclosing bank has failed to do anything to move the case along. The result is mounting fees and angry boards of directors and fellow association members who have to foot the bill for the delinquent properties.

I recently had a case where the foreclosure suit had been filed in January of 2010 and still has not been resolved. Prior to filing of the suit, the owner filed bankruptcy and specifically said he was surrendering the property to the lender. Therefore, at the time of filing suit, the lender did not have to worry about anyone defending or attempting to delay the foreclosure case. You may be asking why the lenders would not want to move these cases along quicker. While I can’t be totally certain, one reason is that the law firms that are handling these matters are simply overwhelmed. The second reason is that if they are the successful purchaser at the foreclosure sale, they are only responsible for the last 12 months of assessments. Therefore, they don’t incur any additional fees beyond 12 months and have no incentive from an association fee standpoint.

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In this case, we had a status conference in May of 2012 in which the lender was order to provide a case status memorandum within 30 days. By September it still had not done so. I then filed a motion to have the lender held in contempt of court for violating the court’s order. Generally, judges do not take too kindly to being ignored. At the time of the hearing on the Motion, the Court entered an Order to Show cause why the lender should not be held in contempt of court and sanctioned for violating the court’s prior order. Ultimately, the court found the lender in contempt of Court and imposed a sanction of $1,500 to be paid to the association. As a result of this case, I have a second pending Order to Show Cause again seeking sanction against another lender.

While the courts have become more proactive in trying to move the cases along by scheduling mandatory Case Management Conferences, there is still a large backlog of cases with more foreclosure cases being filed every day. Unfortunately, this “shadow inventory” makes it difficult to get a clear picture of the real estate market here in Southwest Florida.

 

Contact a Foreclosure Attorney

If you have a situation as we described in this article and have questions or concerns, please don’t hesitate to contact us to answer your condo & homeowner association questions.
Martella Law Firm
18501 Murdock Circle, Suite 304
Port Charlotte, FL 33948
Phone:941-206-3700
Fax:941-206-3701