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About John Souerbry
Expertise
I'm a broker/consultant specializing in real estate investment. Whether you're currently an experienced investor or just getting into the business, I can help with investment strategies, business planning, deal analysis, negotiating, financing, and property management issues. Regardless of whether the property is residential, commercial or bare land, large or small, I help you increase profitability through sound decision making and effective business management. I also work as part of your estate planning to team (estate attorney and tax pro) when you are planning to leave real estate to your heirs or when you are receiving real estate as part of an estate disposition.

Experience
I have experience in buying/selling residential and commercial real estate, property management, financing, and assistance with estate planning and disposition.

Organizations
National Association of Realtors; California Association of Realtors; Silicon Valley Association of Realtors

Education/Credentials
BS, Business Administration MBA, Global Management

Past/Present Clients
I have worked with individuals holding one or two properties and with clients and estates holding over 40 properties of many different types (apartments, condos, single family homes, land).

You are here: Experts > Cities/Towns > California > Real Estate: California > Foreclosure Sale in condo; HOA owed money

Real Estate: California - Foreclosure Sale in condo; HOA owed money

Expert: John Souerbry - 10/26/2009

Question
John,

I am in an 18 unit condo with CCRs dating from 1978 when it was converted to condos from an apartment building. In three locations, our CCRs say that the mortagor is subordinate to the HOA for dues, which would indicate, we think, that the HOA should be paid out of escrow on any sale or foreclosure for dues owed. We had a foreclosure in our building in April, 2009 (NOD posted) and engage a collection agent in April. The bank then delayed the foreclosure sale in May, June, July, August saying they had a short sale in progress. We filed a lien in June; they foreclosed on the First Deed of Trust on September 15, 2009. Since then, the bank has not issued a Trustee's Deed, has hired a realtor, put the unit on the market for 1 day, sold it and hired a new escrow company. Our collection agent says she cannot issue a demand letter to anyone but the owner of record and since no new deed has been issued, that is the guy that was foreclosed upon. Should we retain an attorney to immediately issue a demand letter to the bank, realtor, and escrow company that are handling the rather fast sale that has been made? what is the minimum escrow time period in California?

Thanks,

Pat

Answer
Pat,
If your HOA fees do subordinate all mortgages, your claim may be against the escrow and/or title company that held the first sale for the mortgage company that foreclosed. When a condo sells, the escrow offer is supposed to request a report from the HOA that includes a questionairre with lots of information about the property, including a statement saying the property to be sold is current or behind on their monthly HOA fees.
Also to consider...
As soon as HOA fees were delinquent, your assocation manager should have filed a lien that the title company would see when they ran a title report when the bank foreclosed and prior to first bank sale. If they didn't file a lien, you could be out of luck.
If the owner no longer owns the property, you probably can't put a lien against it. All you can do is ding their credit report and take them to small claims court.
You will certainly need a lawyer to figure this one out. As always, before you hire a lawyer you should consider whether or not what you hope to recover is worth the expense, and whether or not the person you are going after has the money to pay you.
I hope this helps,
John

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