This is not uncommon. Since the HOA lien remains with the property unless it is settled, the new owner would be liable. I would recommend you see if the BUIYER is willing to pay it. This one item is truly your deal-killer. Here in CA, this is very typical. I actually have a current transaction with BofA where the HOA delinquencies are over $20,000 and BofA will contriute nothing. The Listing includes verbiage that clearly states Buyer will pay for all delinquent HOA fees which are approximately $20,000 - $25,000. The buyer reduced their offer by the amount of the HOA delinquencies and is paying it directly to the HOA through escrow at closing. BofA approved the lower price.
In your case, if you can get the Buyer to pay the 3rd, get it approved by the 1st and 2nd, show it on the HUD and you will be good to go.
If you can't get this settled, everyone needs to move on and let it go to foreclosure. The bank will have to pay the HOA after they take the property. Also, HOA fees do not get discharged in Bankruptcy.
Best of luck,
Broker / Negotiator
Newport Beach CA
The seller can pay down the lien too 2000.00 before closing, where he gets the money is his business ,then the escrow can close showing only 2000.00 to the HOA. In foreclousre the law now only allows the banks to have to pay the HOA 9 month back dues,so that is why the lenders know this and won't pay anymore than that in short sale now.
Hoa will sometime reduced some fees ,such as late fees etc. ,but the seller has to go to the next board meeting to request it. I always tell the seller in the listing to pay the HOA if nothing else if they can.
In regards to Jennifer's comments, in NJ the law is the HOA can get a max of 6 months at foreclosure so I don't think that it is a federal law. Betsy, you should check the laws in your state. However, I would approach the sellers about contributing some of their $3,000 relocating fees to come up with the difference.
The point others are making is that anyone can pay the HOA fees ... just not through escrow where it shows on the HUD. The payment needs to be made directly to HOA and not thru escrow.
Nevada has their own rules for how many months a bank must pay past HOA fees, so I believe it is a state-by-state law, not federal.
And for the idea of the homeowners using their HAFA $3,000 to pay the HOA, they won't get that $3,000 until COE so it won't be available to pay the HOA. BUT, a family member or really good friend could loan them and THEN use the HAFA money to pay back.
Good luck!!! Personally, I'm working on keeping one out of Trustee Sale set for tomorrow!
I was actually working on a short sale today with past due condo fees- I am researching another issue so I'm going to cut and paste from an email I sent- you can see the relevant parts- I would see if the state the property is located in has similar "statutory lien" rules/laws- if the fees are liens they are attached to the property and that would be a good direction for you to take your battle--- here is what I sent- hope it's helpful.
I have one with Bank of America right now with the same issue (not HAFA, though). HOA is getting $4000 - more than the 2nd lien even, and they want another $1415.00! The HOA suggested we cut commissions by another percent (investor has already cut us to 5%). That's not a precedent I'm willing to set, though. Not sure what theses HOAs are thinking!