Castilian Hills Homeowners Association v. Chaffins, (Wash. Ct. App. Oct. 22, 2018)

The Facts

Homeowner bought home in 2004. In 2016, the homeowner failed to pay his $147 assessment.  The homeowners association (“HOA”) assessed a $20 late fee. The homeowner still did not pay, despite the normal language in the HOA governing documents about interest, the right to lien and reasonable attorney fees. After more notices, the HOA filed a lien for $525.52 and then a complaint against the homeowner seeking the $525, plus interest and attorney fees.   The homeowner argued to the court that the HOA was “required by statute to provide notice and an opportunity to be heard” prior to filing a foreclosable lien. Continue Reading How to Turn $147 into $10,000 – the WRONG Way

The Fair Debt Collection Practice Act (FDCPA) was enacted to protect consumers from unscrupulous debt collectors; as a shield against prohibited acts. However, it is now often used as a sword, by attorneys who are part of a “cottage industry” that simply look for even the smallest of violations and then claim thousands of dollars of attorney fees and damages in their first letter to the alleged violator. Continue Reading Foreclosing on a Unit When Owner Discharged in Bankruptcy

IMPRESSION: A recent Minnesota Court of Appeals ruling served as a stiff reminder to investor-purchasers of condominium units: request of association resale disclosure certificates should be undertaken as a matter of course (in Wisconsin this is essentially the Section 703.165(4) Wis. Stat. statement of the amount of unpaid assessments).

DETAILS: In Bridge Investments, LLC v. Lowry Ridge Townhomes Assoc., LLP, A17-1221 (Minn. Ct. App. 2018) the owner of a condo unit in the Lowry Ridge Townhomes community defaulted on association payments owing over $3,500.00 in assessments.  After foreclosure proceedings, the condo was purchased by the owner’s bank at a sheriff’s sale.  Later, the defaulting owner reacquired the condo via redemption and on the same day sold the unit to Bridge Investments (“Bridge”)—a venture capital and private equity firm.  Bridge recorded its purchase with no knowledge of Lowry Ridge’s assessment lien; which was junior to the bank’s mortgage, but not eliminated by the redemption, and remained attached to the condo when sold. By this time, the outstanding balance reached over $9,000.00 prompting Lowry Ridge to record a lien for the unpaid balance, late fees, attorney’s fees, and costs.  Lowry Ridge attempted to amicably collect its debt rather than foreclose on the unit; however, Bridge felt it was not responsible for payment since it had no notice of the preexisting lien prior to purchasing the condo. Continue Reading Request Resale Certificates Rather than Roll the Dice

When a mortgage company faces having its mortgage interest swept away in a quiet title action following an HOA lien foreclosure, the mortgage company comes up with all sorts of arguments as to why its mortgage should remain intact. This time, the arguments did not carry the day.

Facts.  In a 2017 Nevada case, a successful purchaser at an HOA lien foreclosure sale bought the condo for $35,000.  The fair market value of the condo at the time was $335,000. The unit purchaser filed a quiet title action against Nationstar, who held the first mortgage on the unit, seeking to extinguish Nationstar’s mortgage so the purchaser could have clear title to the unit. Continue Reading Can a Court Set Aside a HOA-Lien Foreclosure Sale Because the Sales Price Was Too Low?

Condominium associations generally have a number of legal remedies to pursue when an owner stops paying assessments. An Ohio court recently found that associations may collect assessments as they come due during a lien foreclosure action by and through a court-appointed receiver.

Facts.  In a 2017 case, an investor owner of a condominium unit, who had a rent-paying tenant living in the unit, failed to pay a special assessment to the association. The association filed a lien for the unpaid special assessment and started a lien foreclosure action. While the foreclosure action was in progress, the association also asked the court to appoint a receiver who would collect the rents from the tenant, as well as the current assessments as they come due. The unit owner argued that having the receiver collect assessments was a stretch of the statute, which only allowed a receiver to collect “reasonable rental” during the pendency of a foreclosure action. Continue Reading Can a Court-Appointed Receiver Collect Assessments Coming Due While a Unit is in Lien Foreclosure?

In New Jersey, the United Stated Bankruptcy Court held in In re. Smiley, 569 B.R. 377 (2017) that a Unit Owner/Debtor can modify the Association’s lien and strip off all but the six month super lien allowed under the state’s condominium act.  The facts at the time were that the Association was owed $9,000 for filed liens and another $4,700 that it recognized as unsecured.  At the time of the bankruptcy filing, the monthly assessment was $250.  The fair market value of the property according to the bankruptcy schedules was $142,000, but it was under water because of a $174,000 first mortgage on the property.  Based on these facts the Unit Owner/Debtor claimed, and the court found, that despite the proper lien filings, the Association only had security for $1,500 ($250 x 6 months). Continue Reading Chapter 13 Bankruptcy – Can the Association’s Lien for Unpaid Assessments be Stripped Off? YES

In Illinois, a Court recently ruled on a Condominium Association’s attempt to charge back an insurance deductible to one of its members (Gelinas v. Barry Quadrangle Condominium Association, 74 N.E.3d 49 (2017)). This particular association had a fire originate in an owner’s unit resulting in damage to not only the specific unit, but the entire building. The Association made a claim with its insurance company and received reimbursement for the necessary repairs to be made. The Association then held a hearing and levied an assessment against the Unit Owner in whose unit the fire originated. Continue Reading Special Assessing an Insurance Deductible Back to a Unit Owner

An association in southeastern Wisconsin is made up of condominiums that are also rented out for the owners (condotels). In this particular case, a unit owner, who lived in Illinois, was in financial difficulty and wanted to file bankruptcy and turn their condominium over to their bank.  The bank’s attorney prepared a deed in lieu and sent it to the unit owner, which the unit owner then had recorded.  The bank became the owner and was responsible for not only the dues from that date forward, but also what was owed by the unit owner.  The bank did not want to acknowledge this. Continue Reading Banks & a Deed in Lieu

A Milwaukee association took possession of a unit through foreclosure, but could not rent out the unit because of its condition and could not sell it because of a large mortgage. After the property is vacant for several months and the lender did not start a foreclosure, The Husch Blackwell Condominium & HOA Law Team brought a quiet title action against the lender. The purpose of this is to either get the lender to take a deed for the property or have the court order the mortgage to be quieted (wiped out) on the title. Continue Reading Quiet Title Actions

An association in southeast Wisconsin consists of plots of land upon which the various unit owners can park a mobile home or trailer. Under the association documents, unit owners cannot be in the trailer more than 60 days between October and April or a $10,000 monthly fine will be assessed.  A unit owner owed more than $13,000 in fines in addition to unpaid monthly assessments.  When the unit owner continued to refuse to pay, the association started foreclosure on its lien.  Continue Reading Collecting Large Fines