Hi All,
The following question comes from the CV Q & A:
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Author: Jules Sitnick (---.miatflad.dynamic.covad.net)
Date: 03-02-09 09:47
Unbeknownst to the Board of our condo association, one unit owner, who is renting his unit, re-financed his unit and the lending institution has now served him with a foreclosure notice. How does this affect the building? How do we collect our monthly maintenance? Is the lending company now liable for the monthly payments? What happens to the money the renter would normally pay to this unit owner? Any enlightenment would be greatly appreciated.
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Before we launch into this the following advice is given: Engage an Attorney.
Just a few thoughts:
You are not alone; many folks in CV obtained Mortgages shortly after the hurricanes because they were not insured or they were underinsured. Others took out Mortgages at the height of the Reality Bubble, simply to tap into the equity in their Apartment.
Now, Home prices and thus equity have plummeted and interest rates on Mortages have escalated and many in CV as in the Nation are "Under Water"
When a Unit defaults, the Association must still pay it's bills. If they do not have robust Reserves the remaining Unit Owners must make up the difference, it is as simple as that.
There is a process that you MUST follow; in essence it goes like this:
1) Letter of demand.
2) Letter of intent to file a "Claim of Lien"
3) Filing of the "Claim of Lien"
4) Foreclosure
This is a Laymans description of a complicated process; there are many questions about who is first in line, EG:
1) Federal Taxes /State Taxes
2) W.P.R.F., Inc. (By way of the Rec. Lease)
3) Bank
4) The Association.
If the Bank takes Title; they are responsible for the Condo. Fees (for a short time); so many banks move slowly. There are changes in the legislature on this matter in train. (2009 session / J. Robaina / HB 1397)
Inaction is toxic; do not take on this process on your own; I say again,
GET AN ATTORNEY very early in the process..
Your attorney may be able to get a judge to divert the rent to the Association, this has happened in the past here in Florida. (2009 session / J. Robaina / HB 1397)
Good Luck Jules.
Dave Israel
Tuesday, March 3, 2009
MORTGAGE FORCLOSURES - EFFECT ON ASSOCIATIONS
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13 comments:
Dave, good advise. Although I believe in you list of priorities for payment of funds WPRF should be listed first. That is the way the village was set up in the original deed.
A Town Hall meeting is being set up for March 19th at 9:30 to discuss the collection process, foreclosures and their effect on the associations.
This was done a few months ago however the problems now seem to be much worse than it was even then.
Also being presented are the changes in condo law that were passed last year and the proposed changes to be made by the legislature now in session.
Come to the meeting and learn.
Bob,
A tax lien is superior to all other liens of record regardless of the lien priority which may be stated in the original deed.
We have a similar situation. I don't want to be too specific, because of confidentiality requirements. This involves, not exactly the first mortgage, but a bank equity loan TIED to the first mortgage. (This is how the attorney explained it to us.) The attorney has filed a Responsive Pleading with the court to protect our interests to the extent they can be protected.
In our case, if the foreclosure goes through and there is nonpayment of association dues, we stand to get very little of this back for the period UP TO THE TIME OF SALE AT AUCTION. This process should not drag on for years, said the attorney; more likely it would be over in a matter of several months.
Since in this case the amount due on the equity loan is much greater than the current value of the condo, the bank will undoubtedly buy the condo at auction, we were told by the attorney. It would pay them to bid right up to the amount they stand to lose, so no one in his right mind would try to outbid them.
By filing the responsive pleading, once the property is sold (whether to the bank or to the bank and then subsequently to someone else), we SHOULD be reimbursed for all condo dues due after the sale date.
I have heard before that WPRF gets first crack at the money. The attorney didn't mention this, nor did we know to bring it up at the time. I don’t think this would have much effect on our particular situation.
I sure would like to attend Bob Marshall’s seminar on foreclosures but will be in the hospital for knee surgery at the time. Will the session be taped or transcribed by any chance?
For what it is worth, this is a little more "grist for the mill" on the subject.
Lanny
I doubt that it will be recorded as we have tried in the past to do this for Channel 63 viewing. Because of Legal Issues, Attorneys, etc. do not want the seminars or lectures recorded.
Payment of a WPRF fee comes first! Your kidding aren't you?
WPRF and their Master Recreation Lease on CV property ALWAYS comes first. That's how this place has always worked.
Comes first over what?
A tax sale?
A bankruptcy?
Payment on mortgage?
All of the above...
That's funny I have a situation concerning a tax sale and possible foreclosure on a commercial property. My attorney tells me that the town comes first and then me.
The property has a number of leans etc and guess what their out of luck.
I suppose if WPRF is a federal operation they might win out.
Your attorney is WRONG. Check your deed to see WPRF always comes first. Apparently you did not understand that when you bought here.
This has nothing to do with Century Village! It is a Commerial property in New Jersey.
I never heard where a Deed rules over a towns claim on taxes.
By the way the property deed to the property states that my corporation is owed the debt and it doesn't matter.
It does matter if its a CV condo. WPRF comes first, before PB County, Florida, the IRS or ANYBODY else.
Since when does a private entity come before a public entity (government).
It would be nice to here from a real attorney and not a WPRF employee.
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