Foreclosure Problems

Hello,

I have a similar issue in my community (we're in GA), although not quite as severe - you have my sympathies. I don't think that raising late fees will help these issues - it might make slow payers more diligent, but if they don't have the money to pay the dues they don't have the money to pay the penalties either. Might help with the banks, though. Our delinquent owner bounces between foreclosure and listing the property in a short sale - at this point we just want someone in there who will pay the dues, even if we can't collect the overdue amounts once the property gets sold on the courthouse steps.

First, have an attorney slap a lien for the back assessments and their legal costs on any unit that has been foreclosed on and is now owned by an institution. They are responsible for those assessments, at a minimum, from when they took title. It will also let the institution know you're serious about collecting, because the lien will have to be cleared before they can sell the unit, and you could possibly even begin foreclosure against them, in which case they would lose everything. If they see the legal fees piling up, they'll probably try to work out some way of catching up. You may even have some standing to collect the original assessments, but you're going to need a good attorney to sort through that one.

At some point in the future you may want to consider making the assessment an annual assessment, payable in monthly installments, but due in full if delinquent past a certain point.

Here is the statutes relative to assessments and collection in case you need to see them.

559.208 Assessment lien; priority; foreclosure; bid; actions; receiver.
Sec. 108. (1) Sums assessed to a co-owner by the association of co-owners which are unpaid constitute a lien upon
the unit or units in the project owned by the co-owner at the time of the assessment before other liens except tax liens on the condominium unit in favor of any state or federal taxing authority and sums unpaid on a first mortgage of record except that past due assessments which are evidenced by a notice of lien, recorded as set forth in subsection (3), have priority over a first mortgage recorded subsequent to the recording of the notice of lien. The lien upon each condominium unit owned by the co-owner shall be in the amount assessed against the condominium unit, plus a proportionate share of the total of all other unpaid assessments attributable to condominium units no longer owned by the co-owner but which became due while the co-owner had title to the condominium units. The lien may be foreclosed by an action or by advertisement by the association of co-owners in the name of the condominium project on behalf of the other co-owners.
(2) A foreclosure shall be in the same manner as a foreclosure under the laws relating to foreclosure of real estate
mortgages by advertisement or judicial action.
(3) A foreclosure proceeding may not be commenced without recordation and service of notice of lien in accordance
with the following:
(a) Notice of lien shall set forth:
(i) The legal description of the condominium unit or condominium units to which the lien attaches.
(ii) The name of the co-owner of record thereof.
(iii) The amounts due the association of co-owners at the date of the notice, exclusive of interest, costs, attorney fees and future assessments.
(b) The notice of lien shall be in recordable form, executed by an authorized representative of the association of coowners and may contain other information as the association of co-owners may deem appropriate.
(c) The notice of lien shall be recorded in the office of register of deeds in the county in which the condominium project is located and shall be served upon the delinquent co-owner by first class mail, postage prepaid, addressed to the last known address of the co-owner at least 10 days in advance of commencement of the foreclosure proceeding.
(4) The association of co-owners, acting on behalf of all co-owners, unless prohibited by the master deed or bylaws,
may bid in at the foreclosure sale, and acquire, hold, lease, mortgage, or convey the condominium unit.
(5) An action to recover money judgments for unpaid assessments may be maintained without foreclosing or waiving
the lien.
(6) An action for money damages and foreclosure may be combined in 1 action.
(7) A receiver may be appointed in an action for foreclosure of the assessment lien and may be empowered to take
possession of the condominium unit, if not occupied by the co-owner and to lease the condominium unit and collect and
apply the rental therefrom.

559.211 Sale or conveyance of condominium unit; payment and statement of unpaid assessments; liability for
unpaid assessments.
Sec. 111. (1) Upon the sale or conveyance of a condominium unit, all unpaid assessments against a condominium unit
shall be paid out of the sale price or by the purchaser in preference over any other assessments or charges or whatever
nature except the following:
(a) Amounts due the state, or any subdivision thereof, or any municipality for taxes and special assessments due and
unpaid on the condominium unit.
(b) Payments due under a first mortgage having priority thereto.
(2) A purchaser or grantee is entitled to a written statement from the association of co-owners setting forth the amount of unpaid assessments against the seller or grantor and the purchaser or grantee is not liable for, nor is the condominium unit conveyed or granted subject to a lien for any unpaid assessments against the seller or grantor in excess of the amount set forth in the written statement. Unless the purchaser or grantee requests a written statement from the association of co-owners as provided in this act, at least 5 days before sale, the purchaser or grantee shall be liable for any unpaid assessments against the condominium unit together with interest, costs, and attorney fees incurred in the collection thereof.

Joe