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Association Fees - who pays?

Posted by Dave Sulvetta on April 25, 2010 at 10:25am in Short Sale Discussions

My question is this. When there are back condo/assoc. fees that are owed by the seller, who pays when the home is a short sale. Obviously the seller does not have a dime. I guess i am also asking if the association will let the house close with fees due?

 

Thanks

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Replies

  • Michael Schneider May 1, 2010 at 8:51am
    Unlikely that the HOA will agree waive or reduce, in my experience.

    HOAs are tough to deal with in a short sales, along with water bills and tax liens.

    You will need to figure out a way to get them paid by the seller, buyer, or investor.

    Else, you may end up with a lower net commission......
  • Jill Medigovich April 30, 2010 at 6:55am
    There are options for the seller to request from the HOA property manager and board of directors to either reduce or waive the fees if they are financially unable to pay for these prior to closing, if the fees are not a part of the approval, they are the sellers costs incurred during ownership and it would be very rare that you could find a buyer to absorbe these cots, unless you or the other agent have a variable agreement and reduce your commission, an approval is not impossible to obtain from an HOA it is the sellers responsbility to at least try though.
  • Dave Sulvetta April 28, 2010 at 3:16pm
    Hi Everyone and thanks for replying to me. Since it was not a lien on the property it turns out that Citi refused to pay it.
    However Citi did give a complete release including no deficiency judgement too!

    Thanks again.

    Bryant Tutas said:
    Dave, If it's a lien on the property it will need to be removed at time of closing. This means it needs to be paid. HOAs will normally negotiate. The lender may agree to pay some of it. The rest will have to be paid by someone. HOA liens are a real pain in the rear. This is one thing the seller needs to try and keep current if there is any way possible.
  • Bryant Tutas April 28, 2010 at 10:22am
    Dave, If it's a lien on the property it will need to be removed at time of closing. This means it needs to be paid. HOAs will normally negotiate. The lender may agree to pay some of it. The rest will have to be paid by someone. HOA liens are a real pain in the rear. This is one thing the seller needs to try and keep current if there is any way possible.
  • Len McGuirk April 26, 2010 at 9:58pm
    Dave,

    It all depends on your state laws. Here in Nevada, we are a superlien state, so the HOA lien actually survives foreclosure if the property gets foreclosed on. Because of this, most banks don't have a problem with paying the past HOA dues/fees/liens to get the short sale closed. We cannot sell the property if all liens are not cleared from title. I have never really had a major problem with a bank paying the HOA dues in a short sale.

    Hope this helps.
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