Home Owner's Association - Past dues.

[moneytrouble]

Does anyone know if HOA's report past dues to credit bureaus? My bankruptcy has been discharged, and my home has no sheriff's sale date. My understanding is that we may responsible for the dues each month after the discharge date, unless they are paid during the foreclosure process by the bank to have the HOA's lien lifted. For anyone who has lived in a condo, and had a Chapter 7 discharge without reaffirming their home, my questions is: Should I pay the HOA now, or wait until after the deed is no longer in my name, and they bill me for any left over balance?

[denisejohn65]

My lawyer told me to pay them. I have my hearing July 20th. I have to go see him soon. I don't know if I keep paying them after a discharge or not...I have to ask. Maybe we have to pay till they forclose and take the condo back?? Did you stay in the condo?? I moved in with bf. I canceled the insurance and I still pay the hoa and electric bill.I'm going to keep paying cause I won't have that in a lump sum. Anyone out there please help!!

[poorold]

I filed chapter 7 on May 27, 2009 and included my Statement of Intention surrendering our home with the filing.

I moved out of the home the day before and had the utilities shut off. I left the home clean.

I filed a Suggestion of Bankruptcy with the court handling the home's foreclosure on the same day I filed bankruptcy. I then called Citi's attorney handling the foreclosure and informed her I filed chapter 7 and surrendered the home and moved out. She thanked me, wished me well and said Citi would have the locks changed to secure the property.

My HOA dues (2 associations) are almost $600 per month and I am very nervous about being held responsible for them.

So I did the following (I AM NOT AN ATTORNEY AND HAVE NOT RECEIVED THE ADVICE OF AN ATTORNEY, I AM SIMPLY TRYING TO ESTBLISH MY DEFENSES).

First, I filed a Notice of Surrender with the court (foreclosure). This form clearly is not "official" because the Court labelled it "Notice of Bankruptcy." However, I wanted it officially on record and the "Notice" was mailed to plaintiff's attorney and the 2 HOA Assoc. attornies (as required).

In it I stated the following:

1. Effective with the bankruptcy filing, Defendants XXXXXXXXX, H/W (Defendants) filed a Statement of Intentions with the Bankruptcy Court surrendering the property identified by XXXXXXXXXX, FL Tax Account Number XXXXXXXX and having the following legal description: XXXXXXXXXXXXXXXXXXXXXXXXXX (Property.)
2. Also effective with the bankruptcy filing, Defendants no longer resided at the Property. All utilities were shut-off effective with the Surrender and the Property was left clean.
3. The Plaintiff’s Attorney was notified by phone and Defendant, XXXXXXXXX, was informed that Citimortgage, Inc. would go ahead and have the locks changed, further securing the Property as Plaintiff appears to have the superior claim of ownership following the Defendants’ Surrender of the Property and pending abandonment of the Property by the US Trustee (in the bankruptcy case) and final determination by the Court in this foreclosure proceeding.
4. Effective with the bankruptcy filing and consistent with Defendants Surrendering of the Property, Defendants gave up all rights, interests and responsibilities in the Property effective with the bankruptcy filing and Surrender and that the Property is currently under full and complete control of the US Trustee assigned to the Bankruptcy case and current ownership of the Property will be determined by the courts..
5. Defendants further declare that the owners of record of the Property as evidenced in the XXXXXXXXXXXXXX Property Records is incorrect as of May 27, 2009, the day the Defendants filed bankruptcy and surrendered the Property, and the owner(s) of record should read “pending resolution by the Court,” or some other more accurate description.
6. Further, Plaintiff or any other claimant to the Property should take whatever measures necessary to secure not only their interest in the Property, but secure the Property against any future claim(s). For example, Plaintiff may desire to purchase insurance on the Property and turn on the utilities to prevent climate and climate-related damage.



In addition to the above, I filed the following with the Clerk of Courts in my county to be recorded against the property. I will find out next week if the County allowed it to be recorded because when I went in Thursday to record it, the computer systems were down and it could not be immediately recorded. The employee looked at my form every which way but it clearly met the "requirement" for recording. She even attempted to get someone on the phone to review it but no one answered and she finally hung up and charged me the $18.50 recording fee. I asked her if she had a question and she said she had never seen the form before and just wanted to make sure. She then said she thought they'd just reocrd it as a Notice. So, hopefully, it gets recorded.

The form is titled NOTICE OF NO FURTHER CLAIM OR INTEREST and the text is as follows:


THIS NOTICE OF NO FURTHER INTEREST OR CLAIM, effective on this date of May 27, 2009, by XXXXXXXXXXXXXXXXXXXXX, (Husband and Wife) of XXXXXX County, State of Florida.

WITNESSETH, that XXXXXXXXXXXXXXX (Husband and Wife) have filed Chapter 7 bankruptcy and have filed a Statement of Intention surrendering, and effective May 27, 2009 have in fact surrendered, all of the right, title, and interest in the following described land situated in Brevard County, Florida:

Legal Description: XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
_
Physical Address: XXXXXXXXXXXXXXXXXXXXXXXXXX
Property Appraiser's Parcel I.D. No. XXXXXXXXX

Further, any Deed or Record, public or other, evidencing any right, title and interest in the above-described land by XXXXXXXXXXXXXXXXXXXXXX presented after May 27, 2009 is not valid. On May 27, 2009, The U.S. Trustee for the United States Bankruptcy Court for the Middle District of Florida took complete control of the above-described land and the above-described land is also subject to foreclosure proceedings. The ownership of the property is indeterminate as of May 27, 2009 and will be determined by the United States Bankruptcy Court for the Middle District of Florida or the Circuit Court of the Eighteenth Judicial Circuit in and for XXXXXXXXX County, State of Florida.




Whether this works or not, I am trying to show I have no interest in the property and am not accruing any benefit either (the home is vacant).

[HHM]

Unless Florida has some funky HOA's laws, it won't work. The sad fact is, a debtor is still responsible for any HOA dues that come due AFTER the bankruptcy is filed and until the deed of the house actually changes hands (i.e. recorded at the county). As a practical matter, once the home does foreclose, the bank takes care of those post filing, past due HOA dues, but in the mean time, you as the debtor, can be subject to collection activity.

[poorold]

thanks HHM.

I don't expect Florida has any funny HOA rules.

If the county records my "Notice", I'm still going to forward it to the two HOA's and ask them to remove me from their "billing" records, claiming I no longer have an interest in the property and am not the owner.

My contention is my "Notice" is half of a quitclaim deed, me giving up title to the property but not transferring it because the property is subject to court action to determine the owner...and that person will clearly not be me..

[HHM]

thanks HHM.

I don't expect Florida has any funny HOA rules.

If the county records my "Notice", I'm still going to forward it to the two HOA's and ask them to remove me from their "billing" records, claiming I no longer have an interest in the property and am not the owner.

My contention is my "Notice" is half of a quitclaim deed, me giving up title to the property but not transferring it because the property is subject to court action to determine the owner...and that person will clearly not be me..

. Creative, a nice theory, but no real legal basis. No harm in trying it to see if the HOA will back off as a result. But right now, as of today, YOU own the home and no notice you can file can change that. The only thing I can think of would be some sort of abandonment, but you would have to look at your state's law regarding how and when a property is considered abandoned and whether, in fact, you can file anything that shows that property abandoned. A bankruptcy and a foreclosure do not "limit" your ownership interest in the property until the foreclosue is "complete", or the bankruptcy issues an order to surrender the property.

Out of curiosity, did you come up with this yourself, or did you find it on some website?

[poorold]

hhm,

I came up with it myself. basically I was looking to quitclaim to either Citi or one of the HOA and, in FL, quitclaiming would cost me over $3k (because it TRANSFERS ownership and the "seller" has to pay doc stamps and transfer tax.)

So, I decided to modify the quitclaim form (which transfers ownership) to what you read above, simply giving up all my rights, interests, etc.

Is there any law that states I cannot do what I am trying to do?

If the above fails and the main HOA goes for me, I have a little letter from their attorney wherein they filed a lien and stated unless I brought the dues current, they WILL commence foreclosure proceedings in 45 days. That was 6 months ago. And just for giggles, the attorney has some big type print that says in all capital letters: PLEASE GOVERN YOURSELF ACCORDINGLY. bold-face type too.

So, given they did not commence...it appears their attorney violated FCPA by threatening me.

Anyway, I really just want it all to be done.

[HHM]

There is no law that says you CANNOT do it, but that is not the right question to ask. The key is whether the law allows such an action to be effective, and it doesn't. Think this through for a second, the law does not allow you to simply quiteclaim your interest to anyone you want to without their consent.

Also, there is no FDCPA violation. They can threaten foreclosure, it is how they enforce their HOA security interest.

[poorold]

HHM,

they did not "threaten foreclosure." They told me they would "commence foreclosure proceedings if I did not pay within 45 days."

I agree with regard to quitclaiming to someone, but what prevents me from "disavowing any continuing ownership interest" especially in the case of a foreclosure proceeding by Citi wherein Citi desires to perfect their lien to the property?

Also, given my surrender of the property and the "fact" that Citi will file to lift the stay to proceed with the foreclosure (and I've already filed with the foreclosure case that I have no defense and have surrendered the property), I think it is reasonable that it is only a matter of timing via determination by the Court, that I, in fact, no longer own the home. And that "fact" is evident as of the date I filed BK.


You've also made me think of something else. Chapter 7 bankruptcy clearly has as its intent that a debtor discharged of their debts via a chapter 7 is given a fresh start, so much so that debtors are not allowed to reaffirm debt determined by the Courts to be a burden to the newly discharged debtor that might get them back into the horrible financial straights they just were in.

HOA dues are clearly an oversight in the BK laws, but that is not to say "common law" cannot be reasonably established to deal with HOA dues.

I am still in a position to amend my schedules. Shall I amend Schedule B6G, Executory Contracts and Unexpired Leases, and list the HOA Associations and my contract with them to pay HOA dues until the Deed is transferred and request the Trustee to negate this contract?

I understand the "contract" may be established under the "law," but it is still a "contract."

I'm simply trying to avoid a successful Chapter 7 proceeding only to have my life immediately screwed up by nearly $600/month association dues payable till the foreclosure is complete.

As I previously stated, I surrendered the home effective with my bk filing and moved out the day before and left the home quite clean and bleached up because the humidity in Florida is rather conducive to mold. I then notified Citi's attorney of the exact circumstances and she said Citi would go ahead and change the locks. That seems to me to be a clear step by Citi to protect the collateral for their loan and the acknowledgement on their part that they are the "true owner" of the property, especially given they got a Broker's Price Opinion last September and it had to show the fair value is at least $150k below what they are owed.

[HHM]

You are WAY over thinking this. STOP. The BK code specifically exempts post filing HOA dues from being included in BK.

Right now, you are talking like those people that think income taxes are "voluntary". There is NO common law issue when it comes to real estate...real estate is all STATUTE. HOA is all statute. HOA's are created and regulated by statute, there is no common law about it.

BK is federal law...property law is State Law. BK merely supercedes state law with the ability to prevent the lender from enforcing their state law remedy (foreclosure) while the BK is pending, i.e. the automatic stay. However, once the stay is lifted, (either by motion or discharge), the lender is free to exercise it's state law remedy, foreclose. As to HOA's, since post filing HOA dues are specifically excepted from the BK, you are Sh*t out of luck.

As already mentioned, short of abandonment, you are unable to simply relinquish your ownership. Even in the abandonment scenario, vis-a-vis the HOA, as the last owner of record, you are on the hook until the deed goes out of your name either by sale or foreclosure. Accept it.

[DeadManCrawling]

Also:

My understanding is this:

FDCPA would not apply in any case to HOA. They are the original creditor and are not governed by those statutes.

Push comes to shove, you will pay.

Creative thinking, but it will take an attorney for the HOA about 3 seconds to shred it in court, if it comes to that.

[franken55406]

Why did you not stay rent free until the process of foreclosure ran its course? You could of use the mortgage payments to pay your HOA fees..

HHM,

they did not "threaten foreclosure." They told me they would "commence foreclosure proceedings if I did not pay within 45 days."

I agree with regard to quitclaiming to someone, but what prevents me from "disavowing any continuing ownership interest" especially in the case of a foreclosure proceeding by Citi wherein Citi desires to perfect their lien to the property?

Also, given my surrender of the property and the "fact" that Citi will file to lift the stay to proceed with the foreclosure (and I've already filed with the foreclosure case that I have no defense and have surrendered the property), I think it is reasonable that it is only a matter of timing via determination by the Court, that I, in fact, no longer own the home. And that "fact" is evident as of the date I filed BK.


You've also made me think of something else. Chapter 7 bankruptcy clearly has as its intent that a debtor discharged of their debts via a chapter 7 is given a fresh start, so much so that debtors are not allowed to reaffirm debt determined by the Courts to be a burden to the newly discharged debtor that might get them back into the horrible financial straights they just were in.

HOA dues are clearly an oversight in the BK laws, but that is not to say "common law" cannot be reasonably established to deal with HOA dues.

I am still in a position to amend my schedules. Shall I amend Schedule B6G, Executory Contracts and Unexpired Leases, and list the HOA Associations and my contract with them to pay HOA dues until the Deed is transferred and request the Trustee to negate this contract?

I understand the "contract" may be established under the "law," but it is still a "contract."

I'm simply trying to avoid a successful Chapter 7 proceeding only to have my life immediately screwed up by nearly $600/month association dues payable till the foreclosure is complete.

As I previously stated, I surrendered the home effective with my bk filing and moved out the day before and left the home quite clean and bleached up because the humidity in Florida is rather conducive to mold. I then notified Citi's attorney of the exact circumstances and she said Citi would go ahead and change the locks. That seems to me to be a clear step by Citi to protect the collateral for their loan and the acknowledgement on their part that they are the "true owner" of the property, especially given they got a Broker's Price Opinion last September and it had to show the fair value is at least $150k below what they are owed.

[denisejohn65]

HHM What do you mean abandonment? I moved out of my condo, I still pay hoa and electric.

[poorold]

thanks for slowing me down HHM.

I'm still bothered by the logical discrepancy with regard to HOA dues though. Dischargeable pre-petition, but not post-petition.

Fortunately I have back-up Plan B.

Apparently in FL, if the HOA is part of the foreclosure suit as a defendant, they become legally entitled to up to 12 months unpaid dues and assessments.

Well, only one of my HOA's was named as a defendant and I read their answer to the suit (that's how I became aware of the 12 month deal for HOA's). So, last week, I sent that Answer to both the other HOA and their attorney suggesting they become defendant's to the foreclosure.

Fingers crossed that they do, then Citi forecloses and pays them their 12 months (out of 15 months late so far).

Then if the HOA's decide to pursue me for the difference, all I will have to argue is the unpaid portion they are seeking from me was discharged in my BK because my contention is that Citi pays unpaid HOA dues from the date of sheriff's sale back 12 months.

Regardless, a pain in the butt.

[HHM]

I'm still bothered by the logical discrepancy with regard to HOA dues though. Dischargeable pre-petition, but not post-petition.

Yes and no. In a general sense, it is not logically inconsistant becasue HOA dues that come due after the case is filed are post filing obligations just like your post filing electrict bill is not part of your BK, as new bills come in, you pay them after the case is filed. However, I concede that in the surrender scenario, it is inconsistant with the fresh start goal of BK-7 to allow the HOA to collect even post petition HOA dues when the debtor is surrendering the home.