Can I stop paying my HOA fees?

[justbroke]

I would invite any thoughts on this. Does anyone know of any law to the contrary?

[bob1esq]

Here is a link to a Request to Take Judicial Notice that I filed with the Superior Court of California. I believe that HOA dues post petition are discharged if the debtor has surrendered the collateral.

http://www.lemonattorney.net/HOA.htm

I would invite any thoughts on this. Does anyone know of any law to the contrary?

[krisolson7]

I am in California haven't made a payment since June 2008 on my rental property...Got an NOD filed Jan 4, 2010...It has now been 4 months since the filing & I am so worried when I'm getting the trustees sale date...I know it was usually 90 days after the NOD...Are you saying it could take a few more months until the sale date ? Should I wait until I get the sale date to file bankruptcy ? I have been trying to do a loan mod for over 18 months...My principle residence (right next door) has no NOD filed as I am trying to get a "HAMP" loan mod & they don't file an NOD until you are denied..My homeowners association has served me a summons to foreclose real property asessment lien & for damages..So far no lien on property from the association..A BK attorney told me all my past dues from association will be wiped out in Chapter 7 & as soon as I file BK I will be responsible for payment of the dues, which is fine with me...I guess I am asking if I should wait a while longer to file BK or do it now to stall the sale date ? I would rather stall everything as long as I could in order to get back on my feet...Any advice would be appreciated !!

THANK YOU ALL for the terrific posts & excellent information...By the way, I took out $400,000 equity out of my California condo's & bought 10 houses in FLORIDA...Made $70,000 on one & gave all the rest back to the bank...Paid all the payments for a year on ALL PROPERTIES in FLORIDA as they were going down in value like a "SINKING SHIP...It KILLED ME as I had them all rented out...with almost $1000 a month NEGATIVE CASH FLOW on each of them !!! So most of all my equity is gone in California & I am 64 years old...I want to keep my condo's if I can when I file for BK...Does anyone know of a good site where I can find a great BK Attorney that knows about California foreclosure laws while going through a LOAN MOD ??
Sorry to ask so many questions, but I am very scared & stressed out....PLUS, I have been a realtor for 33 years and have only made 2 sales in the past 12 months...The market is so difficult now.. my buyers aren't getting qualified by the banks to purchase property as banks are scared to lend...As Rosa Dana from Saturday night live used to say "Its ALWAYS SOMETHING"...ha ha ha !!

[krisolson7]

I am in California haven't made a payment since June 2008 on my rental property...Got an NOD filed Jan 4, 2010...It has now been 4 months since the filing & I am so worried when I'm getting the trustees sale date...I know it was usually 90 days after the NOD...Are you saying it could take a few more months until the sale date ? Should I wait until I get the sale date to file bankruptcy ? I have been trying to do a loan mod for over 18 months...My principle residence (right next door) has no NOD filed as I am trying to get a "HAMP" loan mod & they don't file an NOD until you are denied..My homeowners association has served me a summons to foreclose real property asessment lien & for damages..So far no lien on property from the association..A BK attorney told me all my past dues from association will be wiped out in Chapter 7 & as soon as I file BK I will be responsible for payment of the dues, which is fine with me...I guess I am asking if I should wait a while longer to file BK or do it now to stall the sale date ? I would rather stall everything as long as I could in order to get back on my feet...Any advice would be appreciated !!

THANK YOU ALL for the terrific posts & excellent information...By the way, I took out $400,000 equity out of my California condo's & bought 10 houses in FLORIDA...Made $70,000 on one & gave all the rest back to the bank...Paid all the payments for a year on ALL PROPERTIES in FLORIDA as they were going down in value like a "SINKING SHIP...It KILLED ME as I had them all rented out...with almost $1000 a month NEGATIVE CASH FLOW on each of them !!! So most of all my equity is gone in California & I am 64 years old...I want to keep my condo's if I can when I file for BK...Does anyone know of a good site where I can find a great BK Attorney that knows about California foreclosure laws while going through a LOAN MOD ??
Sorry to ask so many questions, but I am very scared & stressed out....PLUS, I have been a realtor for 33 years and have only made 2 sales in the past 12 months...The market is so difficult now.. my buyers aren't getting qualified by the banks to purchase property as banks are scared to lend...As Rosa Dana from Saturday night live used to say "Its ALWAYS SOMETHING"...ha ha ha !!

[justbroke]

If the debtor must perform within 30 days, then he could no longer be legal owner of the property after that 30 days.

Go re-read the statute (11 USC 521). It is very clear and unambiguous that it confers no "legal rights" upon anyone else.

Why can there just not be any legal owner of the property?

Because that would just destroy common law regarding property rights.

I think you're just grabbing at straws. Again, 11 USC 521 (a)(2)(C) clearly contemplated this dilemma and addresses it with the fact that property rights are not diminished. Not being obligated to pay a lien, doesn't magically transform a property right. Remember, the property right is entirely separate from the Promissory Note and the beneficial interest of the mortgage.

You only pledged the property as collateral. It's not a "possessory" lien.

[bob1esq]

If the debtor must perform within 30 days, then he could no longer be legal owner of the property after that 30 days. The statute makes it clear that the debtor has no option than one of the three. The debtor has no control over what the bank may or may not do. By your analysis, the bank would control whether the debotor could surrender the property or not, and if so, when that surrender would be, whether it be in 30 days, or in 30 years. The law would be saying, he can surrender the property only if the bank or HOA or other lienholders let him. California law has a maximum of jurisprudence that says, "What is required to be done, is presumed to have been done." Just because the bank is not required to take owership to the property does not mean the debtor is required to hold onto ownership or has any legal ownership rights in the property. Why can there just not be any legal owner of the property? I am not in Florida, but in California, regardless, a state legislature cannot trump bankruptcy law (in California, there is no 1 year HOA dues rule). Although the law says the debtor's or trustee's rights to the property are not affected, it does not say that his obligations are not affected. Arguably, if his rights are not affected, then his right to surrender the collateral should not be affected. In my jurisdiction, when a debtor surrenders collateral, he is no longer obligated to pay the liens and executory contracts or leases securing that collateral. Post-petition HOA dues may not be discharged, but that does not mean the debtor is obligated to pay for expenses on collateral he has surrendered.

[justbroke]

I agree. However, the mere indication of "surrender" on a bankruptcy statement of intentions, does not suddenly make the debtor no longer the owner. So much so, that Florida added a Statute making creditor responsible for 12 months (or 1% of the balance of the mortgage) of HOA/CA dues/fees/assessments that occur after bankruptcy and before the creditor takes legal title. But only 12 months.

You cannot force a creditor to exercise its rights under the security instrument or the UCC so, likewise, a mere "indication" that you want to "surrender" a property, doesn't magically make it belong to the creditor. There is nothing in 11 USC 521 (a)(2) which reads "he loses all rights to ownership of the property". It only indicates that the debtor much perform the action. Most Circuits haven't found that there is anything to do in a surrender except, I would suppose, not fight relief from stay actions or other non-bankruptcy court actions.

So much so that the debtor's property rights are uneffected by what you just wrote, 11 USC 521 (a)(2)(C) goes on to say that... "nothing in subparagraphs (A) and (B) of this paragraph shall alter the debtor's or the trustee's rights with regard to such property under this title".

Congress did not say "so long as title is held in debotor's name, his HOA dues are not discharged." I believe the statute makes it clear that the debtor must have more than just title held in his name in order for his HOA dues to not be discharged.

Well, they should have fixed 11 USC 521(a)(2)(C) then. However, that would go against all principles of equitable title.

I don't believe Florida would have written the new Statute if it were not for the shortcomings in the plain and unambiguous language in Title 11. The real problem with bankruptcy law, is that it must coexist with underlying State non-bankruptcy law. Unfortunately, there's nothing in State non-bankruptcy law which allows a mere statement of "surrender" as losing title.

[bob1esq]

[BKman]

HOA fees are a part of the property. They never go away and you must keep paying the monthly assesments as long as you keep the property. A BK "may" remove the back debt but not the fees paid each month. If you dont pay the assesments when they are due you will get another lien or in some cases the HOA can foreclose on your property.

[qsr]

I need to know the answer to this as well. I'm planning to file Chapter 7. I'm in a payment plan with their attorney's now, but I want to discharge the debt. I don't mind if I have to start paying the fees again after filing, since I intend to stay in the house. I'm wondering if they will legally be able to come after me after I file.

[Flowers]

I am confused as well. I owed a total of $4k, they filed a lien, I filed 7, and then was discharged, keeping the condo.
My lawyer told me I was no longer responsible for the debt and that the lien stays until the property is sold. Wondering if my BK discharge papers presented at the sale (whenever that is) will cause me to have to pay or not????

Oh, and YES I began paying again after I filed just not before because my lawyer told me not to.

[RainMoM]

not trying to hijack this topic, but has anyone heard.. YES OR NO.. Can HOA be discharged in Chapter 7 , and if so, do you continue to pay after you file ??? Please someone let me know !!!

[BillyRip]

Well I'm glad I brought these fees up, but I'm just as confused now as I was when I posted.

[fltoo]

In the last few lines of (16) that you posted, it says, "nothing shall except........the debtor's debt to be discharged before filing" I paraphrased.

So, it does make it clear that before filing fees are discharged.

Thanks for finding and posting that.

[justbroke]

Ok, I checked a bunch of info, mainly addressing FL, (HOA hell) too much to post, and all say the same.

Saying that one of the changes of the new BK code, 2005, is that it now addresses HOA dues.

Unpaid dues up to date of filing are discharged. After filing, it becomes the responsibility of the homeowner again.

Funny, when googling, JB post came up saying "HOA dues are not discharged."
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JB states, "When filing a Chapter 13, the fees that are included in the Bankruptcy are paid, when you are keeping your home. These fees represent a secured claim and are spread out over your plan duration."

But JB, keep in mind, only if the HOA puts a lien on your house, otherwise, they are unsecured.

Exceptions to discharge

(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt--
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(16) for a fee or assessment that becomes due and payable after the order for relief to a membership association with respect to the debtor's interest in a unit that has condominium ownership , in a share of a cooperative corporation, or a lot in a homeowners association, for as long as the debtor or the trustee has a legal, equitable, or possessory ownership interest in such unit, such corporation, or such lot, but nothing in this paragraph shall except from discharge the debt of a debtor for a membership association fee or assessment for a period arising before entry of the order for relief in a pending or subsequent bankruptcy case;

Fancy and confusing wording.

My read is that it means that you cannot discharge any fee which becomes payable after you file. However, it's unclear as to those before filing. Since these fees may be statutory liens under non-bankruptcy law... it's up in the air. If the HOA has also recorded a lien, this makes it much more difficult to discharge as well.

So, yes, the HOA would have to have filed and recorded a lien in Florida. In other States, the difference will be in the underlying non-bankruptcy law.

It's just not a generic answer.