S.P. from Delaware writes:
Dear Mister Condo,
My condo Board says they can foreclose on my condo because I have fallen behind in my common fees and haven’t been able to make a payment towards a Special Assessment levied earlier this year for a new roof. I say they can’t foreclose on my unit because it is mortgaged and the bank takes priority. I have never missed a mortgage payment. Can the condo foreclose on me and take my unit?
Mister Condo replies:
S.P., I am sorry that you are struggling with your common fees and Special Assessment payments. Many folks who purchase into a condominium association don’t fully understand that the association has a great many rights built into the condominium association’s governing documents that you agreed to when you purchased your unit. Chief among those rights is the ability to garnish assessments and collect those fees. While foreclosure is not their first method of collecting the fees against your unit, it is available to them, regardless of the mortgage status of your unit. In other words, having a mortgage does not protect you from a foreclosure action from your association. In fact, if you aren’t keeping up with your common fees and assessments, it is quite possible that you are in violation of your mortgage agreement as well. A condo mortgage typically requires that you keep the unit insured, that you keep the taxes paid, and that you keep current on your common fees and assessments. Taxes and insurance are often escrowed by the mortgage company. As an owner, you are responsible for paying your common fees and assessments. Yes, the association can foreclose and may have to if you leave them no other choice. Many associations will turn to a collection agency or attorney to insure they get their money. A collection agency will work with you as long as you work with them. In other words, answer their letters, emails, or phone calls. Set up a payment plan if offered. Take a home equity loan if available but get those fees paid. An attorney will simply take legal steps such as lien and foreclosure to enforce the legal rights of the association. This can be expensive and lead to foreclosure. Reach out to your association. Offer some type of payment and keep the dialogue open. Otherwise, you may leave them little choice but to bring in a third party and collect their money by whatever means necessary, up to and including foreclosure. Best not to let that happen. Good luck!