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Who Pays HOA Dues in Foreclosure?
Question:
The mortgage on my condo was completely upside-down, so I stopped paying my mortgage, let the condo go into foreclosure, and moved to a rental in another city. Now I’m getting phone calls and letters from an attorney representing the condo association, saying I still owe HOA dues plus late fees and attorney fees. Am I responsible for the HOA dues? I thought they’d be paid off in the foreclosure sale.
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The short answer? Yes, you are responsible for the HOA dues until your condo is sold and you are no longer the owner of record. HOA dues and assessments are a personal liability of the property owner, like credit card bills. If you don’t pay, the HOA can take whatever legal measures are available to try to collect, including hiring an attorney or collections agency or suing you in court.
The HOA can also seek repayment of their dues by placing a lien on your condo. Your condo can’t be sold until the HOA releases the lien, and the HOA won’t release the lien unless they get their past-due fees. In that case, the HOA fees will be paid off in the foreclosure sale. Until then, however, your HOA can go after you personally for repayment.
If you’re thinking about filing for bankruptcy, keep in mind that most, but not all, HOA fees can be discharged in bankruptcy. HOA dues and fees assessed up to the time of the bankruptcy filing can be discharged. But you are still personally liable for HOA dues and fees that are assessed after the filing of your bankruptcy, until you are no longer the legal owner of the property. If your lender drags its feet in foreclosing and selling your home, those HOA dues and fees can pile up. To get around this, you might want to wait to file until just before the foreclosure sale is scheduled to take place to wipe out most, if not all, of those past due HOA fees.