Purchase of Lien and Foreclosure Rights on Delinquent Condo Owner

S.A. from South Florida writes:

Dear Mister Condo,

Can an individual purchase the lien and foreclosure rights on a delinquent condo unit? Second, is there a situation where a condo association can foreclose and take possession without going through the auction process? The unit in question has no mortgage and the owners have abandoned the unit. Sorry, one more question, is it the responsibility of the Association to keep the electric on if the unit is abandoned, to protect the neighbors from mold. This is a South Florida condo association.

Mister Condo replies:

S.A., those are all great questions. As you know I am not an attorney and offer no legal advice in this column. You should likely check with one of the many fine community association law forms in your state before taking any actions listed in your question. Let me offer the following friendly advice. Delinquent condo owners, even those who abandon their units have rights, both from the association’s governing documents and state law. If the unit owner is amenable to any of the methods of disposal for their unit as you have outlined, I can’t imagine there being a problem. However, it doesn’t sound like the unit owners are even around to agree with any proposed disposal of their unit. This is where the lawsuits typically begin and the process of foreclosure gets under way. Typically, a unit owner would offer a defense to the action of foreclosure. However, if the legal papers are served and they choose to simply ignore them, the process continues. If the association follows the law, there should be no problem. As far as an individual purchasing the lien and foreclosure rights in order to take possession of the unit, I would personally have a problem with that. The association is the aggrieved party. They should be the recipients of the proceeds from proper resolution of this matter. However, I am not aware of any law that forbids this. Once again, I would suggest speaking with the association attorney about the legality and proper filings. If the attorney says “yes” and you have a willing and able buyer, I would think it would expedite the process and save the association a good bit of time and money. They key to either of these transactions is making sure the association doesn’t violate any of the unit owner’s rights. Otherwise, multiple lawsuits could ensue. Please check with the association attorney before taking any action.

As for the electric that the association needs to decide whether or not to keep on, my guess is that they should be able to charge back the cost of any electric to the unit and make it part of the lien. Again, the expense of the electric service likely outweighs the potential damage that could be caused by mild so the best business judgment rule should allow the association to make that decision. Even if they can’t collect on the electric cost, that amount should be paltry in the overall scheme of things. All the best!

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