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JudyA2 (New Mexico)
Posts: 1
Posted:
Condo owner has contract for purchase of real estate with two individuals but still holds warranty deed to unit with balloon note due in March 2011. Condo owner himself had tendered all payments but the first $1,000.00 installment of $3,000.00 special assessment that was due December 30. 2009 (this paid by check from one of two individuals to contract for purchase of real estate).

Condo owner purchased unit without any money down and thus has 2 mortgage liens on condo. Condo owner filed petition for Chapter 7 bankruptcy protection April 18, 2010, and bankruptcy court advised no claims be filed unless notified to do so.

As of June 7, 2010, Condo owner's stated intention for condo is neither to reaffirm debt nor surrender but "Other", i.e., to continue to make payments. Condo Owner claims this intention per USC Sec. 522(f).

At time of filing petition in April, 2010, condo unit was current in fees; however, May, 2010 routine monthly dues not tendered by condo owner until June 7, 2010, and as of June 30, 2010, $1,000.00 second installment of $3,000.00 special assessment due but unpaid as well as July routine monthly dues as of July 8, 2010.

Any others out there with similar scenario and what action, if any, have you taken?

MaryA1 (Arizona)
Posts: 7,043
Posted:
Judy,

I believe what has happened is that under the bankruptcy code, USC522(f) the condo owner is declaring an exemption to pay the assessment lien against the condo. This means this delinquency will not be paid through the bankruptcy proceedings. And since the owner is declaring bankruptcy I don't know that it would be practical to sue in small claims. IMO, it may be better to just write off this delinquency as a bad debt.

I'm not an attorney; this is just my opinion. The BOD should seek the advice of an HOA attorney.

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