HOA’s are causing problems in my neck of the woods. I think I am seeing the beginning of all sorts of new challenges that I will face the rest of this year.

The HOA or Condo Association re-keying, cleaning, and renting out the vacant units. Also some HOA’s are acting on past due dues by foreclosing, which is normal but they are not notifying the bank and ultimately getting the units deeded in the HOA’s name. Obviously there is no title search being completed and HOA would never be able to sell the unit. But the problem comes once the bank decides to foreclosure on the unit. The first foreclosure that HOA completed is not valid and the unit will go through another foreclosure process where the unit will be deeded to the bank. From what I understand this activity is being encouraged by attorneys and property managers.

In Florida the bank is only required to pay 6month – 12 month of past due dues for condo’s and HOA’s. And from what I understand attorneys and property managers are educating HOA’s on how to collect additional money from the bank through creative practices (ex while the unit is in vacant and in the foreclosure process --damage the unit – then fix the unit – then charge the bank 10X the amount that was required to fix the damages that never existed)

HOA - denying access to condo’s - even after the unit is deeded in the banks name.

anyone else seeing anything like this?

Not seeing anything like that in my area-yet.
FLorida law is the banks owe 6 months of HOA Dues or 1% of the value of the prior purchase price (whichever is less). It doesnt limit attorney fees which many times are twice the HOA fees. Unless the HOA liened repairs I dont think the bank is required to pay those fees. If there was an assessment for all units its a different story.
What I have seen is Condo developers renaming the units/addressess and confusion actually which unit was F/C'd on...prior purchase price consistant with a 3 bedroom unit but new address is a 1 bedroom..etc.

Haven't seen anything that bad yet, but it's not surprising. A HOA is probably one of the most abusive entities in real estate.

I had a friend have one foreclosed on last year. The HOA closed the doors for back dues. One of the board memebers was braggin' to some of the owners how they got it for $8k. I hate to bust his bubble, but there's a $150k first and a $8k property tax lien on the property....market value on a good day is $80k.....Rents in that area are $1,400 mo.......hmmmmmm.....divide that into $8k equals just over 57 months to break even. I you factor in lost dues, it's even worse.......lol. It was already 18 months out from the mortgage being paid. I'm going to have to check the county records to see if CW did a NOD.......life can be fun.....

Actually it is 1% of the loan amount instead..... And yes they are lately foreclosing on properties and of course for a good reason...they quit claim it back to the previous owner as long they paid if full, why the previous owner would do so? I have a situation were they foreclosured we are under contract (short sale) now we have the bank approval and they are requesting the full payment if we want to close the transaction, they are in better position getting paid when they escrow the short sale than after the bank foreclosure it....

We have some going to foreclosure sale for HOA dues. What the buyer does not know is they are only buying the HOA debt. We had one where someone bid $80K on a condo that went to sale for a $20K HOA arrearage. They did not know that they were not buying the condo. Just the $20K worth of debt.

Bank still gets to foreclose and all they can do is put a lien on it for the $20K.

Condo will sell for about $5K. Past due HOA dues for 6 months are about $2K. Attorney fees are another $2K. And the HOA had to pay a contractor $10K to remove “damaged” carpet from the unit. In this particular situation the HOA is getting about $15K from banks on foreclosed units that are only worth about $5-7K. What’s strange is all of the Bank owned units in the complex had to have “damaged” carpet removed for the low low price of $10K.

Now the other one I am dealing with right now, is an HOA that is foreclosing on units for past due HOA dues. In this situation the lenders are not getting notified of the foreclosure and the HOA gets the deed and then rents out the units. Like I said before the HOA would never be able to sell the unit because the title company would discover foreclosure was completed fraudulently and is not valid. Ultimately the bank will re-foreclose and the unit will be deeded to the Bank for the bank to sell. Tenant signed 1 yr lease with HOA and now I can’t evict because the tenant has rights. Why should the bank have to offer CFK if the HOA rented the unit. And why should the bank have to pay for the damage that this tenant is causing. Tenant thinks he can take is taking the appliances, carpet, and kitchen with him.

Did an interior for a short sale and the agent told me when he called me back to give me the combo - the HOA was not forgiving the $4500 in back condo dues. He indicated that the buyer of the property has to pay that at the table - wow -

I do not understand why these idiot HOA people don't just put a lien against the property for the full amount of HOA due when they hear the word foreclosure. It is cheap and easy to do in FL and gets them the full amount instead of the 6 months worth or 1%. (which ever it is) Anyone in FL that can direct me to a definitive answer (like a link to the law) on the 6 mo vs 1% I would be most appreciative.
Nifunifa, STEW, ???

Grampa= imho I've never seen a hoa that didn't have ego and power issues with pack mentality.

I live in one and there was a foreclosure going on next door. Big farming guy owned it as a rental, older couple, he was 84 and golfed every morning. They had rented there for 15 years.
HOA told them they were going to shut his water off and he was not allowed to use any of the facilities, golf, pool, etc.

Grampa,

This is what I got from one of my seller's lawyer
" demand validation of the debt pursuant to Section 718.116(1)(b), Florida Statutes provides that “Bank” has liability for past due assessments to the lesser of six months of unpaid common expenses and regular periodic assessments or 1% of the original mortgage debt whichever is less" here the link..

http://www.flsenate.gov/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=Ch0718/SEC116.HTM&Title=-%3E2009-%3ECh0718-%3ESection%20116

Grampa,
For some reason I having problems cutting and pasting it here section # just google and it will take straigh to it.
#718.116 Assessments; liability; lien and priority; interest; collection.

BTW, congratulations on you 1.M offers, I can't wait for mine to come ; )

In our area in NY coops are not a big hit, never have been. At this point they all have HOA's that are promoting ironclad investor exclusion. Here's the rub, all of them have financials that show them to be in dreadful shape. Some actually go to incredible lengths to hide this, but it's pretty evident. So any end user purchaser, that employs an attorney worth their salt, is advised to run for the hills. More units going down the tube, more common charge defaults, no one buying in. At some point the HOA will go into receivership and one of our deep pocketed RE entities will be appointed to take over by the receiver. For about 5 to 10 cents on the dollar, this entity will acquire 50 to 60 rentals, change the locks, paint them and rent them. Only in America.

Nif the link works OK, next time hit the space key or hot enter after you paste it.

Even better go to the advanced mode and create a link like this
718.116 Assessments; liability; lien and priority; interest; collection

In your case it needed to truncate the link so it looked for an end to the sentence and found the question mark

Thanks Pine, I'll try it next time. WTB how the advance mode works?