Tag Archives: Foreclosure

Collecting Unpaid Assessments from the Association’s POV

This question comes from the Florida Condo & HOA Law Blog, published by Becker & Poliakoff, one of the most recognized condo & HOA association firms in Florida. A writer asked:

Question: We recently had a home sell in our community, which is governed by a homeowner’s association. However, the title company handling the closing only collected a portion of the amount we stated was due prior to closing. We were of the understanding that the title company would be required to collect all amounts at closing. Now, it appears that the new owner is trying to flip the property and leave the next owner holding the bag. We sent a demand letter to the new owner but must wait 45 days before filing a lien. Are we correct in believing that the title company should have collected all amounts we claimed in our estoppel, and if so, what recourse do we have? S.J. (via e-mail)

To summarize the question, the association wants to know which party is responsible for paying unpaid assessments- the old home owner, the new owner, or the title company?

As Joseph E. Adams explains in the article, the title company cannot be held responsible to the association because there is no privity of contract between the two parties. In other words, since the association and the title company did not have a contractual agreement of any sort, the title company cannot be held liable to the association.

We know that Florida Statutes provides in the Florida Homeowners’ Association Act that a current owner is responsible for all unpaid assessments on the property left by the previous owner. It would truly be a nightmare situation to purchase a property that had thousands of dollars in unpaid assessments on it and not have previously know about that liability. The liability is only capped by the Act if the new owner acquired title via foreclosure or by taking a deed in lieu of foreclosure and is a first mortagagee.

An association’s governing documents may alter the liability limits for a prior owner’s assessments when a new owner acquires title through foreclosure. They may also allow an association to pursue the old owner and/or the new owner for unpaid assessments, including filing a lawsuit for money damages against the old owner or recording a lien against the property (held by the new owner) and foreclosing the lien if it remains unpaid.

A new property owner can avoid being left holding the bag by making sure a lien search is conducted and estoppel information is obtained prior to taking title to the property in an association. This is equally applicable to those who take title through a foreclosure sale because, although their liability may be capped under the Act, there still will be liability.

Only by getting estoppel information from the applicable associations (there may be more than one!) will a purchaser know what unpaid assessments she would be liable for. How does one go about obtaining this estoppel information? By using a trusted, professional company that specializes in navigating the complexities of association ownership. One such company that does that and is relied upon by some of the largest title companies in the Florida is Premier Lien Research, LLC.

To read Joseph E. Adam’s full article, click here.


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Filed under Associations, Buyers, Foreclosures, Investors, Legislation, Lien Laws, Nightmare situations

Lee County home prices and permits on the rise

Although lenders filed more foreclosure actions in Lee County in January

English: Foreclosure Sign, Mortgage Crisis

Image via Wikipedia

than in December, the “foreclosure pipeline” is not producing enough homes for purchase. This low supply is creating a greater demand, which in turn is driving the price for Lee homes up, according to Jeff Tumbarello, director of the Southwest Florida Real Investment Association and an agent with Steelbridge Realty.

Foreclosures are not the only thing on the rise. More building permits were pulled by contractors for single-family homes in January than in December.  When purchasing a home it is important to check that there are no open or expired permits on the house. They can arise when a permit has been pulled but not properly closed out pursuant to municipality guidelines, usually by way of a final inspection within a certain window of time after receiving the permit.

Open and expired permits run with the property even if the property is sold and ownership changes hands. So, a new home owner will be responsible for  for remedying an open or expired permit, which can include fees, fines, completion of work, inspection of work, or even removal of improperly done work.

Unless a prospective property owner makes sure a search for open and expired permits is conducted pre-closing, she may be setting herself up for a costly and time-consuming situation as a new owner. And, no, title insurance doesn’t usually protect against unknown open and expired permits.

If you’re looking to purchase property, make sure you know whether there are any open or expired permits on the property; ask your title agent or attorney to contact Premier Lien Research to conduct a lien search, which always includes an inquiry into open and expired permits. You’ll be glad you did.

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Filed under Buyers, Florida Real estate, Investors, Open & Expired Permits