Condo Associations need to think twice before foreclosing out its lien for past due assessments

Condominium Associations Foreclosing Out Liens for Past Assessments

On January 23, 2013, the 3rd District Court of Appeals rendered a decision in a case called Aventura Management, LLC v. Spiaggia Ocean Condominium Association, Inc. Case No. 3D11-2545,. In this case, a condominium association foreclosed its lien for past due assessment and began renting out the unit prior to the first mortgagee’s foreclosure of its mortgage lien. Upon the first mortgagee completing its foreclosure, an investor (Aventura Management- hereinafter called “new owner”) acquired the unit at the foreclosure sale. The association attempted to collect from the new owner all the past due assessments etc. that had accrued from the original unit owner, maintaining that as a third party purchaser, the new owner was responsible for all past due assessments that were owed from original owner. The new owner objected to the association’s attempt to collect these monies and sued. The result: The 3rd DCA ruled that the condo association upon taking title to the property through its own foreclosure became an intervening owner and was therefore also jointly and severally liable for the past due assessments during the time it was the owner. Accordingly, the new owner was not required to pay the past due assessments and fees that had accrued since the time the original owner defaulted.

TIP. The law has now changed – if you are an association, you may no longer be made whole by foreclosing on your lien. Therefore think twice before going down that path and discuss with your attorney the risks of foreclosing out your assessment lien. This recent case has now established that when an association takes title to a unit via its own foreclosure, the association will now become jointly and severally liable for past-owed assessments and cannot collect the past due assessments from the new owner.

The facts of this case are limited to a new owner’s obligation to an association for past due assessments when the association acquires title to that property prior to new owner. However, when the association does not first acquire title to the property, the general rule that a third party purchaser at a mortgagee’s foreclosure sale is liable to the community association for all past due assessments accrued through the date the Certificate of Title remains unchanged. It is also unclear from this ruling if a mortgagee acquires title to the property after the association already owns it, would the mortgagee be subject to the ruling of this case and not owe past dues.

When it comes to managing your single and multi-family residential properties, Octazon Management has got you covered. Our full-service property management company can handle everything from maintenance and landscaping, to screening potential residents, marketing, advertising and managing your properties online with our advanced technology that allows us to stay connected and maintain transparency with our clients.

With Octazon, rest easy, because we bring order to residential property ownership.

Call us 888-324-9528 or email us at info@octazon.com today.

Check us out @ www.octazon.com

“Single Family Residential – REO – Multifamily”

Single Family Renters Continued Growth Creates Need for Good Property Management

According to David Brickman, SVP of multifamily at Freddie Mac, more than one-third of U.S. households are renters, the largest share since 1997. Additionally, the nation has seen 5.4 million new renter households between 2004 and 2011, and growth is expected to continue. John Tashjian, principal at Centurion Real Estate Partners in New York City, explained the housing decline has “left a deep and lasting impression on the psyche of Americans as potential homeowners. This drop in consumer confidence has caused a rush toward rental housing which, in turn, has caused rents to rise nationwide and a decline in affordable rental housing stock.”

According to a new survey from Premier Property Management Group, the fast-growing population of single-family renters is more likely to dwell in their home for longer periods of time compared to multifamily occupants. This suggests the demand for single-family rentals offers greater stability than the multifamily market. One reason single-family renters might be more prone to stay longer is their higher satisfaction with property management, according to the survey.

Chris Clothier, director of sales and marketing and partner of Premier Property Management said that “Single family rentals can be found in virtually every community today and more and more families are choosing single family rentals either as a temporary stop on the road to becoming homeowners or as a permanent solution to their housing needs.”

When it comes to managing your single and multi family residential properties, Octazon Management has got you covered. Our full-service property management company can handle everything from maintenance and landscaping, to screening potential residents, marketing, advertising and managing your properties online with our advanced technology that allows us to stay connected and maintain transparency with our clients.

With Octazon, rest easy, because we bring order to residential property ownership.

Call us 888-324-9528 or email us at info@octazon.com today.

Check us out @ www.octazon.com