People on Property Deed and Condo Association After Chapter 7

[mjengineer]

I filed for bankruptcy back in 2011 and was discharged, in the process I included a condo that was used to live in and the associated debt. My parents were listed on the deed because I had the property in college, but their names were never on the bank loan for the property. Well the other day my parents get a letter from the condo association suing them for $15,000 I don't have a copy of it since it wasn't sent to me but apparently my name is listed on the suit?

I am assuming it's for back association fees since the property has sat empty for several years and BOA has been in no rush to foreclose. I was always told that they only thing the association or Bank can take is the actual property itself, but not any money from the individuals unless they property was auctioned and there was a deficiency balance. Since my parents names were not on the loan that isn't possible, so I am not sure if they are suing to get the property (which is perfectly fine) or if my parents would be liable for some sort of cash payment.

I am going to consult with my BK attorney, but wanted to ask here to see if anyone had a similar situation.

[btbeme]

Regardless of the "law" I know one thing to be true - people can sue you, or anyone else, for whatever they feel they have standing to sue for. When and if that case goes to trial, the judge will decide if there is indeed a lawful reason or precedent to allow the case to continue. But many times it is nothing but a money grab.

Many lawsuits are 100% without standing...meaning the people being sued have no legal obligation to answer said suit or even to be sued...unless they provide a reason to be made available.

In other words, sometimes entities sue other entities as nothing more than a fishing expedition. And HOAs are famous for hiring attorneys to send threatening letters that look, smell, and taste like a lawsuit but are really nothing but a collections letter.

Others may well jump in here, but I find it hard to believe that an HOA can sue or lien a shareholder - I am of the understanding that the HOA fees and charges and liens are attached to the property and not the title holders. But I could be wrong. Condos and timeshares sometimes have some twisted regulations. I am also cautious of your statement "I am assuming...", because until we know the real and absolute basis for the lawsuit - as well as lot of the underlying actualities - it is impossible to parse and advise a path of remedy.

Find out what the suit is about, if it is really a suit, and I suggest contacting your prior BK attorney to get their read. That would be a starting point that we might be able to help pull the thread and see where it goes.

[despritfreya]

Ok, I will jump in. . .

HOAs have lien rights as well as law suit rights just like any lien holder, unless the CCRs preclude reducing the claim to a judgment (unlikely). In addition, HOAs have statutory rights established under State law.

The problem MJ has is two fold. . .

1. Parents, as titled owners of the property are responsible for all HOA dues/fees/assessments.

2. MJ, as titled owner of the property is responsible for all HOA dues/fees/assessments that came/come due after the date of the filing of his/her bk.

The obligation to pay the above referenced dues/fees/ assessments ends when the property is no longer titled to MJ and/or the parents - typically when the property is lost to a foreclosure or is sold through a traditional or short sale. MJ's bk attny should have fully advised him/her of this. Once the property's title changes then the new owner becomes responsible for all dues/fees/assessments going forward.

As to the lien on the property, unless Florida has a priming statute (which it might) the lien is subordinate to the senior mortgage. It will be wiped out when the senior lien holder forecloses. This does not eliminate the debt associated with the lien, just like if you had a second mortgage. What survives is the right to collect the money from the prior owners (subject to any bankruptcy discharge of pre petition amounts). If the property is sold in the normal course by the current titled owners (short sale or not) the lien will have to be cleared at close of escrow. If it is not, the new owner will not get a warranty deed.

Bottom line is that the suit is proper for all HOA dues/fees/assessments against the parents. It is also proper as it relates to post petition dues/fees/assessments against MJ.

Des.