Homeowners Association Foreclosures in Orlando

Defending Association Foreclosures

Homeowner Associations in Florida are oftentimes very aggressive.  Thousands of foreclosure cases are filed by homeowner’s associations and condominium associations in Florida every year.  Many of these cases are filed when a homeowner is only a few hundred dollars behind on their dues and these relatively small balances can turn into thousands of dollars owed in a very short period of time.

What most consumers do not know is that the Association documents allow for Associations to foreclose and take their home.  Unfortunately, when we purchase our homes, homeowners received copies of their homeowner documents but they are very long and complicated documents.   Typically, we as homeowners, focus on what the regular homeowner’s assessment is.  We ask what the monthly, quarterly or annual dues are and determine if we can afford them.  We don’t read the Association documents and therefore we don’t understand the very broad powers the documents grant to the Associations.

It is very important that homeowners understand that if association fees and special assessments are not paid, the Association can foreclose and take their home even if there is a mortgage lien on the property.   The court can sell your home at the foreclosure sale and then the new owner can refinance or sell the home, if there is equity in the property, or they can simply rent out the home and make income from it until the mortgage company eventually forecloses on their interest.    

There is an additional and significant danger to the homeowner when being foreclosed on by an Association; when there is also a mortgage on the property, the homeowner loses the home to the Association or to a Third Party Buyer, but the homeowner remains personally liable for the debt on the home even if they no longer own it. What that means is that the homeowner is still liable to pay the mortgage payments even after they lose it in an Association’s foreclosure.   If the homeowner does not pay the mortgage after losing the home, the Mortgage Company will foreclose on the new owner, which may not sound like a big deal but, the homeowner will be named in that foreclosure suit and is at risk for a deficiency judgment if the mortgage company is not paid in full.   Because the homeowner has lost the home, there are no loss mitigation options available such as deed in lieu of foreclosure, a short sale, or a modification of your mortgage.  This situation can be dire for the homeowner.   This is why it is so important to consult with a knowledgeable, experienced foreclosure defense lawyer if you have overdue Association dues or have been served with a complaint in foreclosure by your association.