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ElizabethF3 (Michigan)
Posts: 1
Posted:
I am curious about something. If a condo owner in MI is in foreclosure are they still responsible for paying the montly association fees? I would think after the sheriff's sale happens and the bank owns the condo then the bank is responsible for paying the fees. Are the laws different in MI because we have a 6 month redemption period?
TimB4 (Tennessee)
Posts: 21,059
Posted:
Elizabeth,

From what I've gathered in reading information from the Foreclosure University website, the sheriff's sale isn't final until the redemption period expires. Therefore, during that time frame, the current owner (person who was foreclosed on) would be responsible for the Assessment payments to the HOA.

I've been fortunate enough and never had to deal with a foreclosure, so my knowledge is limited in this area.

Here is a link to Michigan Foreclosure laws

Tim

MelissaP1 (Alabama)
Posts: 13,836
Posted:
It depends on if the HOA has a lien on the property or not. I assume the situation isn't a HOA foreclosure. If the HOA had an existing lien during the foreclosure process, then those dues would continue to be added to the amount owed the HOA. Once the foreclosure process is finished, then the lien still exists. However, it most likely won't get paid until the bank sells off the property. They aren't in no hurry to pay liens off.

Whatever monies recieved when the foreclosed property sells will go to pay off the debts owed the bank. Which would include the lien. Don't get excited yet...If they bank doesn't get enough money to pay it off in the sale, the HOA sees nothing of it. It's then pretty much erased/settled.

This isn't bad news either. It means the HOA has a chance to start over from scratch and stop the bleeding of the non-payer. If the HOA had done the foreclosure. The bank would still get paid first and share any profits with the HOA. It's not a winning situation either way. It's just a way to have a stop gap from wasting HOA money on a property that's not contributing.

Former HOA President

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