HOA dues, and foreclosure - what to expect

OK, so we had a delinquent homeowner, delinquent in dues for quite some time.

They ended up getting forclosed, and kicked out. Now a bank owns it - and continued to not pay the dues.

I got notice from a real estate agent the house is selling next week to new homeowners (hopefully not sleazebags like the last ones).

What HOA dues can we expect to get back? Do we 'loose' all the dues/late fee's prior to the bank taking it over? I would think the bank for sure would be responsible for the prorated yearly dues from when they owned it until they sell it to the new owners. Since nothing was paid, and our notices to the bank were ignored, late fee's continued.

HELP need advice asap.

There was no lien presented, as we didn't know the property even went into foreclosure until after it all occurred.

You should not be waiting until you hear that a home might be going into foreclosure to file a lien, because that is too late anyway.

Besides, at least in Kentucky, the law states that foreclosure will extinguish the lien as it is subordinate to the mortgage.

A lien should be placed on the property as soon as your local laws and CC&Rs allow after the delinquency occurs.

Our assessments are due on January 1 of the year for which the dues apply. If payment is not received by March 1, we can file liens on March 2.

However, again, because foreclosure extinguishes the lien, once a home has been foreclosed upon,

we would be starting from square one with the new owner (the bank). So we cannot collect assessments due and owing prior to the foreclosure, but the bank is now responsible for assessments from the date they took title.

If the bank does not pay and becomes delinquent, we can file a new lien. Now the bank will need to satisfy the new lien before they can sell or transfer title.

But any monies due and owing from the first lien are forfeit. Sorry.

IMO - I'm not so sure that a lien would ensure that you all would have collected your arrearages in this case. I believe that you're probably standing 4th or so in line. First IRS is going to get their money if the owner owes back taxes, then there's the First Mortgage and maybe a Second or Third trust. I believe that the lien might get paid if there were enough proceeds, but lately, what we're seeing are a lot of homeowners whose loans exceed the value of their home. We currently have about 6 forclosures in a community of 300 or so townhomes and they are all folks who purchased in the last 2-3 years and some of them got involved in those screwy interest only loans or something like it. In some states, you might be able to file a lien without an attorney, but if you do use an attorney, the legal fees can be pricey. Yes, you'll get the legal fees paid by the owner, but again, if there's not enough equity in the property, then you've wasted your time and money on an attorney.

Check your docs since some of this might already be in place, but you might suggest adopting a collections policy. IE - After someone is 10 days overdue, send them a late notice and charge them a late fee (like $25 or so). Also check you docs for "members in good standing as it relates to privileges, like voting, pool, parking, boat ramp access, etc). After they are 60 days in arrears, send them a second letter in this letter, set a date and advise them that you suspending their privileges. Good luck.