Hi, Shawn Polston with Tucson Short Sales; we are your leading short sale team in the Tucson area. I wanted to talk to you today about homeowner’s associations and what happens with them in the event of a short sale or a foreclosure.
As a member of an HOA, you are obligated to pay the dues. If you do not pay the dues, the HOA has two options to pursue these unpaid dues. The first of these options is that they can formalize the lien against your property and attempt to foreclose it. The problem with this option is that there’s usually a mortgage on the property, and if they put a lien on it, they actually have to pay off the mortgage before they can foreclose on the property. Simply put, if the house is worth less than what the mortgage is, the HOA is not going to do that.
The other option that the HOA has is to pursue you personally. They can do this even after a foreclosure. A few of my clients have come to me a few weeks before their foreclosure date, they haven’t paid their HOA dues for the past few years and now there’s an enormous HOA lien on their home. The lenders in short sales, generally speaking, are receptive to paying that lien. But, sometimes, they aren’t because the lenders know that if they foreclose on the property, the HOA loan gets wiped away from the property and the HOA’s only recourse is to come after you personally.
Typically I recommend my clients that no matter what happens with the property, they need to keep paying their HOA dues because it could come back to haunt you. If you keep your dues current, it’s going to help you in getting a short sale done. I’d love to talk to you more about this subject, or anything related to short sales or foreclosures, so please give me a call today.