needing help from the Michigan Foreclosure Law
A house in our neighborhood was foreclosed upon and is being sold next
week. The HOA (I'm the treasurer) was never informed of the foreclosure.
The previous owners owe $205 (plus a late fee) of last year's dues.
Thinking those people still owned the home, we'd sent them a letter
informed them that a lien would be placed against the house on 02/24 if we
didn't get our money. The people at Fannie Mae seem to be of the opinion
that our HOA is out of luck--that we won't get that money. Anyone know if
this is true or whether we should proceed to file the lien?
From your headers, I'm assuming you are in Maryland.
I'm in Michigan, so what I am getting ready to tell you more than likely
has no relevance to you, although you may want to check Maryland law to
see if you find something similar.
Michigan law explicitly states that in the event that a condominium goes
into foreclosure, any unpaid assessments are discharged and become
general expenses of the association.
The exact wording from Rule 903 (dealing with disclosure statements) is:
"A statement similar to the following shall be included within the
disclosure statement: "Co-owner liability. Section 58 of the Michigan
Condominium act provides: If the holder of a first mortgage or other
purchaser of a condominium unit obtains title to that unit by
foreclosing that mortgage, the holder of the first mortgage or other
purchaser is not liable for unpaid assessments which are chargeable
against the unit and which had become due prior to the foreclosure.
These unpaid assessments are common expenses which are collectable from
all unit owners, including the holder of the first mortgage who has
obtained title to the unit through foreclosure.