Richard White: Can condo and master association start foreclosure action?

Q. I have two associations that I pay fees to each month. I fell on some hard times and became delinquent in my condominium fees. I tried working out payment arrangements with the association, however, to no avail. I was, up until recently, current with the master association fees. The condominium association has now started foreclosure. While this was occurring, I stopped paying the master fees due to the fact that foreclosure was started. I just received a 10-day notice letter from the master association. What can the master association do if I am already in foreclosure with the condominium association? Too many associations.

— K.I.

Miami

A. Yes, both associations can foreclose. In fact, it is required. Sorry about your hard times. You will lose your home unless you can find the funds to bring the fees current. Maybe you can sell your home fast and avoid the foreclosures. Regardless of what is said in Washington, you are in a depression as are many others. I see this situation in many letters and e-mails that I receive. I wish you luck and hope you can find the funds to avoid a foreclosure on your credit reports. I offer you this one hope write your congressman a letter and tell him/her your situation and ask that they take a closer look at the economic conditions.

Q. I am on a HOA board and am wondering if the president has to sign all board approved contracts, or if other officers on the board can legally sign a contract even when the president is available to sign? Nothing is stated in our bylaws regarding who is required to sign contracts.

— K.A.

Tampa

A. This is more of a business operational question, contract law rather than an association statute requirement. The answer is also dependent upon the type of contact. In any contract approval, the contract must be approved by the board of directors in a legal meeting. In some situations, the board would approve who signs the contract. As the manager, I have been approved by a motion to sign the contract. Some contracts may require the secretary to sign. Any legal age qualified person can sign a contract when approved by the board of directors.

Q. I read in your column that you recommend that the board foreclose on any delinquent account. Many of the delinquent accounts are upside down and to foreclose would be wasted money. How can you advise why the board should take legal action when such action is very expensive and will not result in eliminating the mortgage obligation?

—B.C.

Miami

A. It has been my recommendation that the board working with an attorney develop a collections and delinquent policy. That policy would include a fast action to eliminate large delinquent amounts. The major objective is to get the delinquent accounts paying faster. Thus, an owner in bank foreclosure would have the knowledge that the association would act faster to obtain title to the property than the bank’s actions. Once the association has title, they have several options. They can notify the bank that title can be passed back to the bank as deed to stop foreclosure. Once title is passed to the bank that would require the bank to start paying the fees. The association can rent the property to generate income. The association could sell the property short sale with the approval of the bank. Keep in mind that I recommend fast action. If the board delays legal action then it can be too late because the legal fees and delinquent fees become enormous. The establishment of a fast action policy may result in preventing an owner from just sitting in a home with no mortgage payment and not paying association fees. This is serious and the board needs to create or modify a fast action collection’s policy as a top priority. My answer and objective is based on trying to get the unit or home paying fees as fast as possible.

Q. My condominium unit was placed in foreclosure and I am not living in the apartment. The furnished apartment was unoccupied and payments to the association were not made, so the association decided to remove the furniture and allowed someone to move in. Can an association evacuate a foreclosed apartment and allow someone else to move in?

— J.V.

Miami

A. There is a part missing in this question and that is who is foreclosing and has the unit had the final foreclosed taken place? If it is a bank foreclosure, then the association does not have title and cannot use the unit or remove the personal property. If the association has been successful and foreclosed on the unit, then they have title to the unit and can rent the unit. As for personal property, unless you remove the furniture, they can do with it anything they want. If an eviction notice was served, then the items would be placed on the street. The key is who has title to the unit.

Q. Two units in our small condominium are not paying their fees. At a recent board meeting it was announced that a special assessment would be approved at the next board meeting to fund the shortage caused by these units. Are the other owners responsible for paying these fees? Why are we responsible to pay other unit delinquent fees?

— C.L.

South Pasadena

A. Your board of directors is responsible for the maintenance and operations of the condominium. If some units do not pay, then the funds necessary to pay for the maintenance and operations must come from other sources. Guess who is the other source? You and the other members must pay. Unless you can generate other funds from another source, you must pay.

Richard White is a licensed community association manager in Florida. Questions should be mailed to him at 6039 Cypress Gardens Blvd. # 201, Winter Haven, Fl. 33884-4415; e-mail CAMquestion@cfl.rr.com. To be considered, questions and comments should include the author’s name and city. Questions should be about association operations, not legal matters.

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