Can I stop paying my HOA fees?

[BKcrazy]

My BK attorney told me that they had taken another case to Superior Court regarding HOA fees. He lost. He said the law is somewhat vague. But, yes, at least I was lucky about the pre-filing assessments.

One thing I can tell you, is beware of an HOA's attorney. Mine made mistakes in the initial demand letter. I have been going back and forth with them since August. They also checked my credit, and I am still trying to find out if that was illegal for their attorney to do that.

[fltoo]

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.

[fltoo]

Oh well, back to square one. I will have to try to find more info on it.

Maybe chap 7 and 13 are different?, although I find that unlikely.

I def discharged mine in chap 7. Will email lawyer and see what he says.

Can you, if time, post the link where the BK code addresses this?

As always, thanks for your input.

[justbroke]

I was assuming in post 5 that you meant, you can discharge previous fees unpaid, BUT have to start paying them after the BK filing. (since the new ones are not included in the BK)

I am confused too and there seems to be different results.

The BK Code clearly states that association fees and assessments are non-dischargeable.

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.

When filing a Chapter 13, where you are surrendering the home, the fees are non-dischargeable as well, but generally, the Bank foreclosing upon your home, will pay the fees. Some banks will only pay those fees up to the date of your petition, leaving you with the fees from the date of filing, until the deed changes hands. Other banks will pay all the fees to guarantee a clean title.

I didn't post any scenario for a Chapter 7, but it should work similarly as above for Chapter 13.

[fltoo]

Ok, I am totally confused now.

JB, in post 5 you said, "pay dues from the time you file BK to deed changing hands."

In post 13, you said, they are NEVER dischargable.

I was assuming in post 5 that you meant, you can discharge previous fees unpaid, BUT have to start paying them after the BK filing. (since the new ones are not included in the BK)

I discharged my unpaid dues prior to filing, in the BK. I am now liable for the new ones. But, I am definintely not paying, I am going to wait til they foreclose and try to unload the property, and try to force the lender to pay in order to pass clean title. I rather take the chance of paying them later, even with attorney fees, than to shell out money now.

[justbroke]

So since you prepay for the upcoming year how can they make me hand over 450.00 if I surrendered the home before 2009?

Surrendering is not a legal change of title to the property. It's all based on the deed and who is the rightful owner at the time of assessment. Of course, you can have this pro-rated if you don't use all of that year.

Also lets say it all depends on the forclosure date, not the surrender date and forclosure actually happens in... like feb. Are you responsible to pay the entire years worth of HOA or would it be prorated?

See what I wrote above. basically, you are right.

However, you could get some good luck like BKcrazy and the Bank may pay some or all of the fees.

[justbroke]

This is just my experience...not trying to say that you are wrong in any way...
My pre-filing assessments were discharged in my bankruptcy. My attorney listed them as unsecured. The president of the HOA even said that my attorney did that right. They argued about it at first. But, I am still negotiating with their attorney for the post-filing assessments. Ack.

Oh no... nothing taking wrong. I was just letting others know that they could be as lucky as you, BKcrazy. That is, that the Bank just pays everything! It does happen more often than not.

I still think the HOA portion of the dischargeability section of the BK laws, is still tenuous and will see more litigation as all these foreclosures flush out the market. I'm glad that you had a good experience on part of it. Hopefully, you can settle something on the post-petition portion.

[BKcrazy]

Well, even though Florida law sgtates that, you asked a question under Bankruptcy Law. In BK Law, you cannot discharge HOA fees and assessments (period).

The Florida law would work in a non-bankruptcy status and is basically how it works outside of bankruptcy.

As you have just learned and as I posted earlier, many Banks still pay the HOA fees and all taxes to get a clean title.

As for truckerswife, your HOA Rider is part of the mortgage documentation you signed. The HOA Rider is slipped in there and most people don't know that they signed it. That is, that you more than likely signed it when closing your loan. This is specifically why lenders ask if you are in a PUD or PUC or other planned community. They usually ask if you're in a Condo or Homeowner's Association. Generally, they find this out from the title agent anyhow, but they like to know up front.

This is just my experience...not trying to say that you are wrong in any way...
My pre-filing assessments were discharged in my bankruptcy. My attorney listed them as unsecured. The president of the HOA even said that my attorney did that right. They argued about it at first. But, I am still negotiating with their attorney for the post-filing assessments. Ack.

[Mark80]

Hmm I never even thought about this, my HOA are due for 2009 in mid feb, I surrendered the home in Dec of 2008 so I just ignored the bill that came. I didn't see at that point if I legally handed over the property before the 2009 HOA season how I could be responsible to pay them. Now even though I surrendered my home mid december the property has still not be forclosed, I have not even gotten a notice.

So since you prepay for the upcoming year how can they make me hand over 450.00 if I surrendered the home before 2009?

Also lets say it all depends on the forclosure date, not the surrender date and forclosure actually happens in... like feb. Are you responsible to pay the entire years worth of HOA or would it be prorated?

Ugh, something I really didn't consider until now!

[limage]

I am planning on filing a Ch 7 at the end of Feb/beginning of March. I will be surrenering my condo. My once 360k condo is now worth less than 180k, but my taxes are 4k a year and my association fee is $550! I wish I could do a mortgage modification, but I can't even afford the taxes and HOA!

I have been paying my association fee as recommended by my attorney.

Florida (thanks Florida- I can't wait to leave this f***ing state!) just passed a law requiring condo owners to purchase hazard, liability and assessment insurance. If not paid by January 30, the association will charge for it and pass it on as an assessment. This policy will cost me 2000. Yep, 2000- because I would be forced to get flood insurance too. I don't have it. At this point I just don't care anymore. I'm tired of getting financially raped by everyone.

My attorney told me to ignore any assessment and blow off the insurance, because I will be surrendering the home before the can file the assessment. I hope he is right!

[relief13035]

I stopped paying HOA fees in Oct. on both of the condos we are surrendering.

Funny - our HOA fees were $165 too. LOL - maybe in the same place as BillyRip. Now wouldn't that be a riot.

[justbroke]

I checked with gf that did the two short sales. The lender ended up paying the fees and unpaid prop taxes in order to pass unclouded title.

Well, even though Florida law sgtates that, you asked a question under Bankruptcy Law. In BK Law, you cannot discharge HOA fees and assessments (period).

The Florida law would work in a non-bankruptcy status and is basically how it works outside of bankruptcy.

As you have just learned and as I posted earlier, many Banks still pay the HOA fees and all taxes to get a clean title.

As for truckerswife, your HOA Rider is part of the mortgage documentation you signed. The HOA Rider is slipped in there and most people don't know that they signed it. That is, that you more than likely signed it when closing your loan. This is specifically why lenders ask if you are in a PUD or PUC or other planned community. They usually ask if you're in a Condo or Homeowner's Association. Generally, they find this out from the title agent anyhow, but they like to know up front.

[fltoo]

Thank you Starting Over.

That is exactly what I was looking for.

I checked with gf that did the two short sales. The lender ended up paying the fees and unpaid prop taxes in order to pass unclouded title.

[truckerswife]

As far as a "contract" I never signed one from the Home Owners Association. We are almost a year behind on dues. We have moved out of the condo. A few months ago, when we were getting ready to move, the associate manager stopped by. He asked if we were going to be able to pay anything. My husband told him no and that we were getting ready to move and the house was going to end up in foreclosure. The manager said "I haven't received notice". Hubby told him he would eventually. We never heard anything else from him. He just said okay and walked away. I know that in the past we had received notices from the Association threatening to foreclose. When that didn't work they were threatening to turn off the water. Last year, I tried to catch up the past due fees in February the manager told me not to worry about they wrote them off.

[StartingOver08]

fltoo, there is a new law that just was passed effective July 1, 2008 that changes who the HOA and condo associations can go after in the case of foreclosure. I will look it up and post it as soon as I find it - but basically it says the owner is responsible until the deed transfers to the bank. If there are outstanding fees by the time the bank takes the property over, the HOA or Condo Assn can go after the previous owner (the one that lost the property) or make the bank pay. But the bank now is limited to 12 months of fees.

I 'assume' that the banks had that provision written in the law because it never was there before.

Ok. Did not find that law yet...but found an attorney article commenting on it, see below:

Several people who are contemplating voluntary foreclosure have asked me whether they should continue paying their homeowner or condominium dues during the foreclosure process. I have recommended that homeowners stop paying homeowner dues if they are voluntarily surrendering their homes to their mortgage lender. I believed that the homeowners due would be paid by the party who ultimately purchases the property from the mortgage lender in order to clear the HOA’s lien on the property. I have changed my opinion after another attorney pointed out a Florida statute that may impose personal liability for homeowner’s dues. Florida Statute 718.116(1)(a) states that homeowners are personally liable for assessments by a condominium association. Florida Statute 720.3085 states that homeowners are personally liable for assessments by a homeowners association.


I do not practice law in the area of homeowner association law. I am unaware of any condo or homeowner association which has pursued a judgment against a former owner for unpaid assessments or dues after the unit has gone through the foreclosure process. I am concerned about this liability because the condo and homeowner statutes provide for awards of attorneys fees to the association’s lawyers for their collection of unpaid dues and assessments. A relatively small association debt could become a substantial judgment when potential attorneys fees are included. Therefore, the more conservative strategy for someone anticipating foreclosure is to continue paying homeowner’s association dues through the date of sale.

Real estate taxes are different. Tax liability is usually much greater than the amount of association dues, and I am unaware of laws permitting the government to pursue personal liability for unpaid property taxes. I continue to recommend that people who are voluntarily surrendering properties to their mortgage lender through foreclosure not pay real estate tax bills.