Home, Land, Property Buying and Selling - Foreclosure Lien
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Marilyn803
04-03-08, 07:24 PM
I live in a condo in Michigan. A homeowner's unit is in foreclosure although the bank has not yet taken possession. The homeowner owes our association $3000.00. Can we put a lien on the unit or is it too late? The homeowner has also declared bankruptcy which preceded the foreclosure.
md2lgyk
04-04-08, 12:22 PM
Ask the Association's attorney. You DO have one, don't you? Having "been there, done that" I can say you're nuts if you don't.
Marilyn803
04-04-08, 05:19 PM
Yes, we do have an attorney, but I'm not getting much cooperation with our Board. They believe it's too late and not worth the money because we probably can't collect anyway, so I guess they're just going to let it go. Our representative from the Management Company we employ has led them to believe it's not worth the effort and there's nothing we can do at this point, but I don't believe anyone has contacted an attorney.
mdtaylor
04-05-08, 04:08 AM
Normally, like 99.9% of the time, a purchase money lien is superior to the homeowner association's lien for maintenance fees.
Rationale is, the homeowner association is paid if full at the time of original sale an therefore at that time it has no lien. The purchase money lien is then put in place. Subsequent to that the homeowner association lien accumulates on a monthly (or whatever) basis, but the purchase money lien is already there.
$3000 isn't worth the effort but you do have rights. First is, if the condo sells for more than is owed the mortgage company and the IRS the association will get what is left, up to what is owed. And second is, the association has the option of foreclosing it's lien ans assuming the position of the debtor. Probably something you would not want to do unless there balance owed the IRS and the mortgagee is less than the appraised value of the real estate. But remember that even if the association were to foreclose it's lien, any excess in funds received at the foreclosure sale must be paid to the debtor.
As always, this requires a thorough knowledge of your own state's laws, and that of the condo docs.
Attorney!
Rationale is, the homeowner association is paid if full at the time of original sale an therefore at that time it has no lien. The purchase money lien is then put in place. Subsequent to that the homeowner association lien accumulates on a monthly (or whatever) basis, but the purchase money lien is already there.
$3000 isn't worth the effort but you do have rights. First is, if the condo sells for more than is owed the mortgage company and the IRS the association will get what is left, up to what is owed. And second is, the association has the option of foreclosing it's lien ans assuming the position of the debtor. Probably something you would not want to do unless there balance owed the IRS and the mortgagee is less than the appraised value of the real estate. But remember that even if the association were to foreclose it's lien, any excess in funds received at the foreclosure sale must be paid to the debtor.
As always, this requires a thorough knowledge of your own state's laws, and that of the condo docs.
Attorney!