Condominium Associations and Collections During Foreclosure
Although condominium associations and foreclosures have been a touchy topic for decades, most new homeowners have no idea how condominium associations work or just how much power they have. Condominium associations are often comprised of regular people, like yourself, with other paying jobs. These volunteers typically have no experience in real estate, property management, or other related field. What they do have is real estate condominium law governed at the federal level. If you do not understand condominium law, you may be unaware of a number of issues that can lead to foreclosure that have nothing to do with the bank.
Condominium associations have the right to fine an owner for something as simple as planting flowers without permission. If it is a violation of condominium rules, the association may assess a fine. If the fines accumulate, the association can place a lien on your property. If the fines go unpaid, it is perfectly legal for the association to foreclose on the property.
The same process applies if a condominium owner falls behind on his community association fees. If a condo owner fall behind on his fees, even once, they will have to pay a fine. If the owner falls 90 days behind, the condominium association has the right to place a lien against the condo and threaten to foreclose. Remember, this action is not a ploy to acquire the owner’s property. When a condo owner falls behind on community fees, the rest of the community must make up for the lack of payment through higher fees, reduced spending on amenities, maintenance, and upkeep, and special assessments.
By agreeing to the association by-laws and handing over the right of property trustee, condo owners waive a number of rights. In some cases, you even give up the right to go to court. For these reasons, among others, potential condo owners should always review the condominium by-laws thoroughly before moving into any condo building or community to get a clear understanding of exactly what is expected and the consequences of ignoring these expectations.
Always pay close attention to any documents that need to be signed. If something does not sit well with you or it seems unreasonable, you might consider purchasing a different condo property or even your own home. Homeowners do no have to follow the rules set by condominium associations or federal condominium law.