Foreclosed property with assessment from 2007. HOA was negligent and did not place a lien on the property. Does that mean it is wiped out? Who pays the balance on this assessment? Is the new buyer liable? The CC&Rs says the new buyer pays any past assessment. Can they enforce it?

Is it still for sale as a foreclosure or have the new buyers bought it yet??

Usually the HOA can levy fines and sanctions per the CC and R's which you will have to read for specifics.If there is an HOA the buyers agent should have contacted the HOA to make sure no backpayments were due.

Usually the backpayments will be paid by the bank that owns the foreclosing property at closing.

There is no cut and dry answer and you would have to be involved in this transaction to be able to see the correct course of action to take.

The property is in escrow now, bank owned. The buyer wants Seller to pay for past assessments. Not sure how it will play out. Would have been simpler if HOA had placed a lien on the property.

Here the Listing Agent generally takes care of making sure its paid but its always wise for the Buyers Agent to ensure that its paid current.

The Owner (bank should pay the HOA current), thats no big deal. The HOA's rarely file leins on the condos here either.

do you know what the REO Addendum says...which the buyer presumably has already signed?

That is the problem. The addendum makes buyer responsible for upaid assessments unless it is already negotiated. Small HOA, was very difficult to get information from them. Buyers just discovered the existence of the assessments.

Should have had a stip that makes bank liable for it. If the assesments are small try to get you and the listing broker to split it to get it to close. Of course you can stick it to the buyers but they will feel like you didn't do your job and bad mount you to everyone.

If you take care of it you will be the hero.

I am the listing agent. However, I can see the buyer's point of view. They are paying over list too. Hopefully, will get it resolved quickly. Large assessment, much more than combined commission.

why should the bank eat the assessment? buyer agreed to pay any additional charges in the Addendum. Buyer should eat it or back out.

You are right, it would come to that since they signed the addendum. They are paying well over list, covers the assessment and more. Too late to negotiate.

This is why I always have buyers put down really small earnest money deposits especially if the bank is holding it. This way if they have to walk and the bank keeps the money you can always offer a credit off of there next home purchase on the earnest money say (500.00) that they lost.

If the house will appraise and is way underpriced why not as a last resort amend the contract and raise the sales price to a new amount and have the bank cover the assessment costs? This way the bank(seller) net's the same and the buyer finances the assesments into the loan. You could also offer to come up halfway and finance half the assesments and the bank covers the other half. Bottomline is even if the bank takes your buyers deposit they will have to deal with this issue with the next buyers AND have to disclose it as a material fact going forward.

If I was the AM I would try to work a solution on this deal.Hopefully they buyers did not put down a massive deposit.

If the house is a great value appraising shouldn't be an issue.

Not sure is the bank knew about the HOA fees being deliquent but they should have. I think that would be a fact that should have been disclosed. But then again the banks make up their own addendums to try to take all liability off them.

I have a client that has a offer on a condo that is an estate sale & short sale. The community has an assessment until the end of August of 2010 ($150 a month for new siding). Would she be liable for many missed payments of the estate?

There are two kinds of "assessments" here.

One is the monthly fee or assessment or whatever it is called locally. The association's right to collect this fee is recorded generally as part of the deed and is usually listed on the Schedule B of the title commitment. It is like any other lien and generally must be paid as part of the closing, otherwise the title insurance would not cover it. Title insurance is, in effect, saying the title was checked for liens and defects, here's what we found, and we will defend you if another defect surfaces later. In my experience, these are paid by the seller from the seller's proceeds. I know some states do limit the sellers liability of these fees that accrue to an institutional seller that acquires a property in foreclosure (like Florida, 6 months or 1% of the sales price.

The other kind are one time special assessments, such as roofs or new siding or paving or whatever. In my experience, these are seller costs as long as they are were "ratified" (in other words, voted on and approved) prior to the sale.

This isn't legal advice, just my personal experience dealing with HOA's, condo associations and PUD's for 14 years.