ASSOCIATION FORECLOSURE

Condominium and homeowners associations, many of which are struggling to keep their coffers from running low when owner(s) quit paying maintenance fees, have a tool to collect some of what they are owed. It is a hardball tactic called a reverse foreclosure. Here is how it works: When a home or condominium owner becomes delinquent on their mortgage payments, the bank files a foreclosure lawsuit. Frequently, the bank will then delay the foreclosure process because the delinquent unit is worth much less than the mortgage. Through a reverse foreclosure, the association files its own foreclosure lawsuit against the delinquent unit owner and at judgment time takes legal title. The association cannot sell the unit because of the bank’s lien, but it can renounce its title in court and request the judge to give the title back to the bank. The bank then has to pay the maintenance fees. Under existing Florida statutes, the bank is required to pay 12 months of past-due association fees or 1 percent of the overall mortgage amount, whichever is less.

We at Swimmer Law Associates, P.A., are experienced in issues such as those described above. Should your association wish to discuss their owner delinquency situation, please feel free to contact us for help.