HOAs Can Foreclose on Florida Homes

Alma Korshak answers a few frequently asked questions about Homeowner’s Association dues and their ability to foreclose for nonpayment of dues. Alma is the owner of Short Sale Facilitators in Casselberry Florida and has worked helping Florida sellers with the short sale of their property for over seven years.

Q: Okay I haven’t paid my HOA fees and now they saying they will foreclose on me. Can you sell the house or how does it work?

Okay, just say that you have a seller – the question is about HOA dues not being paid, delinquent HOA dues not being paid. I know I’ve answered this question but I’ll say it again. Number one. My best advice that I could give any homeowner is to not go delinquent on their HOA dues because you could owe them, be delinquent by a month, and your file, the Homeowner’s Association will send that to their attorney’s office.

And you’re going to have delinquent dues of $500 and once the attorney gets hold of that, they could be up to $2000 easily. Which does make the short sale more difficult, not that it can’t happen, but here in the state of Florida the Homeowners Associations do have a lot of power. They’re very powerful. If you have not paid your HOA dues you know, in a while, meaning it could be that you’re delinquent a year maybe six months or whatever.

Q: Can the HOAs foreclose on you?

Absolutely they can foreclose on the property if you have delinquent dues that you owe and you haven’t paid them. So you can still do a short sale. That doesn’t mean you can’t short sale the property. Sometimes it’s just going to make that short sale a little more difficult because now you’re going to be dealing instead of having delinquent dues of $200- $300 or $500 now all of a sudden they’re going to be up to $2000 or $1500 and the short sale lender may not want to pay that whole amount.

As I explained before, lenders, short sale lenders/investors nowadays are very – it’s not, I don’t want to use the word stingy, but they’re very strict on how much they can pay and they know the statutes here in the state of Florida that they only have to pay six months of delinquent dues to 1% of whatever those delinquent dues are. So then that always just makes the short sale trickier. Yes.

Q: Can you still do a short sale?

Absolutely. It’s just going to be a little more complicated because we’re going to have to try to negotiate down those HOA dues with the law firm or with the HOA with your Homeowner’s Association and a lot of times they’re just not very flexible at all.

So in that case what would happen is the seller would either have to come up with the rest of those dues that are owed meaning the borrower or the seller or then they would have to find a buyer that would be willing to contribute towards the delinquent HOA dues that the short sale lender is not willing to pay for.

Q: Can my lender my bank stop the HOA foreclosure?

Not that I know of, not that I know of. I don’t think they can do that. I really couldn’t answer that question. I’m not an attorney to be able to answer that question. That would be an attorney question.

I don’t think they’re able to. I know that I think we had a file like that where we did call because the homeowner’s association was ready to foreclose on the property and I know that Jackie from my office did call the lender and the lender said that there was nothing that they could do.

Q: Does that mean that all lenders are the same way?

I’m not sure. But you know once, you know if the short sale lender is ahead of the ballgame like the homeowner’s association is, their attorney, of course the homeowner’s association can foreclose on that property and then eventually you know.

Q: But the question is can they stop that foreclosure?

I couldn’t answer that question. My experience has been with one file that they weren’t willing to do it. We were talking in our office one day Jackie and I and this issue came up and Jackie did call that short sale lender to let them know that the homeowner’s association was foreclosing on the property.

And when she called them they said that there was nothing that they could do.

Q: So is it that way in all cases?

Again, I’m not an attorney. I’m not sure. Every lender is different. Maybe if a lender were to find that out and maybe it was a different lender maybe they would have had their attorney that represents them call the attorney for the HOA and maybe stop it but I don’t know. So I can’t answer that question.

If you have questions about how Homeowner’s Association fees can affect your short sale, call and make an appointment to meet with Alma Korshak in her Casselberry, Florida office.

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