Foreclosing on Banks
Adams Stirling PLC
Menu

FORECLOSING ON BANKS

QUESTION: I've been hearing that HOAs are taking a hit when banks take over properties but do not pay their monthly dues.

ANSWER: It’s a problem for associations in areas suffering from high foreclosure rates. Some banks foreclose and then do nothing to pay their monthly assessments. This increases the burden on other owners who are forced to pay special assessments and/or higher dues to cover the lost income.

When a bank forecloses, boards should immediately contact the bank, find out who is in charge of paying the association's dues, and make sure that monthly statements are sent to that person. Otherwise, the billing statements will get lost in the bank's bureaucracy. If the bank becomes delinquent, boards should immediately lien the property. When the delinquency reaches $1,800 or one year, boards should promptly initiate foreclosure proceedings against the bank.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC