Another foreclosure question

Started by DianeW • 3 replies • 1235 views

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DianeW (Maryland)
Posts: 147

Posted:

Our developer is no longer in control and was required to begin paying dues/assessments. Although he has paid some money on some lots, he is behind on everything. We have placed liens on 15 of his most valuable lots. Now we are working with a lawyer and an intent to foreclose letter has been sent. At our annual meeting last week, one individual said at a foreclosure sale, the Association could only recoup the monies owed on each individual lot separately. I was really hoping just the sale of one lot might pay the developer up on all his lots.

Does anyone have experience in this and how does it actually work?

MaryA1 (Arizona)
Posts: 7,043

Posted:

Diane,

I think you need to ask your attorney these questions. IMO, it may be dependent upon how the lots are mortgaged. The developer most likely does not have a mortgage for each individual lot but rather one large mortgage for the whole s/d. If the latter then I would think the HOA MAY be able to recoup the delinquencies for all the lots specified in the foreclosure action. Your attorney should be doing credit check on the developer to ascertain whether or not it would even be beneficial to foreclose.

DianeW (Maryland)
Posts: 147

Posted:

I believe the property is not mortgaged and owned free and clear by the developer.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Diane,

In that case I believe you would have to enter into a foreclosure procedure for each individual lot and could only recoup the outstanding assessments for that lot.

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