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MiikeP (California)
Posts: 3
Posted:
I am a board member of our HOA. Resently a condominium was was occupied by tenants or people who aquired the keys, that had be vacant for some time. The owner of the unit cannot be found, has declared BK, and owes the HOA more than $10K. The unit is being forclosed on by the bank.
What recourse options does the HOA have?
How does the HOA enforse the CC&Rs and R&Rs when the owner cannot be located?
Is there anyway to recoup any of the HOA fees that are owed from the tenants. The tanants are using HOA provided water, hot water, trash service, and the common area amenities and services that do not require an ekey passcard (we have turned that off).
JanetB2 (Colorado)
Posts: 4,219
Posted:
Hi Mike:

Welcome to HOAtalk. Here is an item from CA Davis-Stirling which will clarify some info for you:
http://www.davis-stirling.com/SpecialAssessmentsBankruptcy/tabid/3044/Default.aspx

The HOA should have policy in place and should have placed a lien before it reached this point.

Here is info on potentially suspending privileges:
http://www.davis-stirling.com/SuspendingPrivileges/tabid/1755/Default.aspx

MelissaP1 (Alabama)
Posts: 13,836
Posted:
The HOA should have the Lot # for the property. They can go to the Tax Assessor's officer to find last owner. However, you mentioned it being foreclosed on. How do you know this information? Foreclosures are published in the newspaper under the Legals sections in the classifieds. Some papers only publish the legals section a few times a week.

It's not too late to file the lien on the property as long as the bank foreclosure isn't complete. A lawyer isn't necessary to file a lien but you may want one this time around. The legal fees can be added to the lien amount owed.

I will warn you that don't expect getting the money owed. The best you can hope for is the bank to take over and eventually they may catch up on the dues owed during their ownership period when they finally sell the property. That is because the Bank ALWAYS gets paid FIRST and whatever (if any) funds is leftover is divied up to the debtors. Plus the process and waiting for the bank to sell can take up to a year or more. However, once it's done you may have a better owner who pays their bills.

The owner is responsible for their tenants NOT the HOA. Not much you can do about who lives there if they aren't the owner. Just try to find out who the owner is. It's the owner who's responsible to make sure their tenants abide to the HOA rules. If they don't, the HOA can come after the owner in addition.

Former HOA President
MiikeP (California)
Posts: 3
Posted:
Yes the HOA did place a lien on the property but the HOA's lein is in forth position behind the tax collector, the first mortgage and the second mortgage. The properties value is far less then what is owed. It is likely the owner is in jail or left the country. A person contacted the HOA manager stating he was the owers manager but when asked to provide proof of his agency with the owner he stated that was not possible. He contacted the HOA because he wanted access keys to the common area ammenities for the tenants. Our rules state that owner's ammenities access keys are turned off when HOA fees are are more than 60 days past due.
JanetB2 (Colorado)
Posts: 4,219
Posted:
Hi Mike:

It potentially appears that via Davis-Stirling you can deny privileges for non-payment of dues. The tenant can then potentially go after the owner to pay HOA fees to get privileges restored. The privileges are for in essence each unit as probably described in your documents, not for individuals/tenants. Be interesting to see how this goes.

MelissaP1 (Alabama)
Posts: 13,836
Posted:
There are 2 things assured in this world: 1. Death. 2. Taxes. You want to find someone you find their grave or their tax records. If the owner has owed property this long to be foreclosed on, then their identification should be registered with the tax assessor's office. You normally can expect about 6 months or so gap between new ownership for the tax records to catch up.

There's no reason at this point to find the owner. If they have violated the CC&R's, then their tenants don't receive the benefits either. The owner is held to the rules of the HOA which passes onto the tenants. However, some states like Florida do allow the tenant to pay the dues assesments on behalf of the owner IF they choose. If that were the case, then the tenants could be allowed access to the amenities.

These tenants are going to be in trouble soon once that property forecloses. They will no longer have the right to rent. This means the HOA could call the law to force the tenants out since they don't have a lease agreement. We had a renter who was illegally living in a house the owner didn't authorize. The law finally got involved and the HOA held as a witness of their occupency. He eventually was kicked out. This may be an option in the future once the dust settles.

Former HOA President
MiikeP (California)
Posts: 3
Posted:
Thank you all for your comments, as this issue progresses I will make up dates. at present our HOA manager is trying to obtain a rental/lease agreement from the so called owner's manager.
GlenL (Ohio)
Posts: 5,491
Posted:
Mike, your scenario is why Associations should have rental rules in place and one of the best I've seen is requiring language in the lease agreement which allows the HOA to collect past due fees directly from the tenant. The landlord must then accept the amount paid directly to the HOA as payment. Since you don't have that, I would contact the HOA's attorney about a court order directing the tenant to pay the HOA instead of the landlord's agent.

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