This Is our Village

Wednesday, February 8, 2012

what can be done with a non paying unit?

We have a unit in foreclosure, the owner claimed bankruptcy and hasn't paid his dues in over 2 years.
The Unit is vacant.
What can the Association do? Can the Association rent the unit to recoup some of the fees?
Is hiring an Attorney advisable?
Thanks for any advice.


  1. Hi Marc,
    I believe that your Association should have engaged an attorney two years ago.

    There are some key facts missing from your question;

    1) Has bankruptcy actually been filed?
    2) Is there a mortgage on the unit?
    3) Have you filed a lien?

    Finally, the idea of renting out property that you do not own is not a good idea.

    Your Association needs legal advice to navigate these waters, and the sooner the better.

    Dave Israel

  2. Amen Dave! We have a similar situation here in our building. We even have a laywer in the bankruptcy court on our behalf and it has helped bring the situation to a conclusion faster. Lawyers are a necessity, not poolside or bus ride advice (all too common here at CV).

  3. Hi Dave,
    Thanks for your reply.
    1.Bankruptcy was filed!
    2.There is a $60,000 mortgage!
    3.A lien was filed but expired after one year!

  4. There was an excellent Pres/Res Council mtg this morning on all kinds of collections. Go see Roger at UCO for his handout material and read, read. There were new rulings and new ideas.
    Maybe you need a lawyer who actually monitors liens.

  5. Thank you all,
    I did attend this morning's meeting and learned we are not alone and that this delinquency problem is quite widespread.

  6. We had a similar situation except that the owner kept living in the condo. The owner had taken out a huge home equity loan from a bank when values of condos were high. We engaged an attorney. The owner filed for Chapter 13 bankruptcy, in which a repayment plan satisfactory to all creditors is set up. As I recall, no payments were made. The attorney advised us to not foreclose, because the bank that had made the home equity loan would gain all but something like 2% of the proceeds. It was the attorney's hope that the bank would foreclose, and the bank finally did foreclose when the owner died. Now the attorney is going after the bank to pay the current condo dues and trying to get as much as possible from the bank of the back dues and legal costs we are out. This may finalize when the bank sells the unit. The new owner, by the way (says our attorney), does NOT have to be approved by the board. This is an exception to the rule. So the new owner could be anyone from anywhere.

    It has not been a pretty picture, but at least it seems to be drawing to a conclusion.

  7. Lanny
    I would like to know why the new owner did not have to be investigated
    I understood that any resident (owner, tenant, etc.) must be.

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  9. According to our lawyer, in a judicial or tax deed sale, the association does not need to approve the new OWNER, but the OCCUPIER of the unit must comply with the association restrictions. If you are still in doubt, seek legal advice.

  10. we have a unit in foreclosure and have a problem in that owner hasn't been near the place in over a year. other unit owners are complaining about dirt of the place. board members checked out unit and it is dirty and messy inside. it needs a good cleaning. nearby owners say there is mold. none spotted by board members. have asked lawyer what to do next. anyone have any ideas.....

  11. I thought the same thing as you, Ken. It's apparently an exception to the usual rule, as Pl Cruise says. The attorney didn't say why and I didn't pursue it, because there was so much else to get straight at the time. I can guess why--that the courts have held that this would be adding too much to the burden of the foreclosing lending institution--but it is only a guess, and my guesses are often wrong.

  12. The exception is detailed in our Declaration of Condo Article XI, B, 6a. But I would not want to know what was in the minds of those who framed it.


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