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?

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

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

A Wisconsin condominium association had a unit owner who was habitually delinquent in the payment of assessments. Neither the association or the property manager had ever spoken to the unit owner.  The association hired an attorney who filed one small claims action after another against the unit owner every time she became delinquent.  The association was awarded judgment each time, and was paid on the judgment debt each time through numerous garnishments  However, the attorney fees were awarded at the time of judgment, so the association was not able to recover the additional attorney fees it incurred for each garnishment.  After each garnishment the debt would again accumulate and the collection process would start over.  The unit owner was not paying assessments outside of garnishment. Continue Reading Why Foreclosure and Money Judgment at the Same Time?

When a Board or Property Manager sends a Unit Owner to its attorneys for collection, the Board or Property Manager should refer ALL communications from the Unit Owner relative to the debt, including the request for any pay off, to the attorney.  Discussion by the Property Manager or Board with the Unit Owner almost always leads to problems. Continue Reading Collections – Reconciliation of Unit Owner Ledgers and Conversations with Unit Owners

If you are a condominium association who is preparing to complete a lien foreclosure on a Unit, you are sure to have many questions about what to expect if you become the owner of the Unit through the foreclosure process. Should the Association rent, sell or hold the Unit and what are the risks associated with each?  Should the Association pay the taxes? What about the mortgage? Should the Association deed the Unit to the mortgage company or start a quiet title action?  What will/can our property manager help the Association do? These are all questions the Association will have to answer.

This white paper will walk you through your options, banish common misconceptions associated with foreclosure, and provide you the answers that will help you adequately prepare and make the best out of a bad situation.

The Board of Directors of a condominium association has a fiduciary duty to make sure that all owners pay their dues and assessments. It is important that associations develop a collection policy and follow it consistently, as a collection policy of doing nothing could be a breach of a board’s fiduciary duty. Having knowledgeable and experienced legal counsel is an integral part of any condominium association collection policy – it makes a difference.

The Husch Blackwell Condominium & HOA Law Team has a proven collection strategy. Since 2012, our team has collected over $8.4 million in dollars and property. You can learn more about why our collection strategy works in this white paper or radio spot.

 

It has long been recognized that liens are statutorily created rights and consequently are strictly construed. What this means in English is that you can’t simply substantially comply with the lien filing laws. If you want your lien to be valid it must meet all of the statutory requirements and be filed timely. The Florida Court of Appeals reaffirmed this long standing view when it held that substantial compliance with the Florida HOA Act was deficient. (See, Dwork v. Executive Estates of Boynton Beach Homeowners Association, Inc., No. 4D16-1698 (Fla. Dist. Ct. App. May 24, 2017).  Continue Reading Everything is “Fine,” So Long as You Strictly Follow Your Documents