Had a question.. I'm thinking about buying a washington DC condo at the foreclosure trustee auction.. It's a first mortgage foreclosure but there is a condo lien recorded after the 1st mortgage.
I've read some places that I would be responsible for $1,000 of the condo lien and other places that the whole lien would be wiped out. Anyone know for sure?
Also are property taxes and condo fees pro-rated from the date of sale on DC properties? I buy in Maryland all the time but realize DC may be different.
Thanks for your help
Condos in DC have supremacy over mortgage liens. So even if it is recorded in 2nd position, it is in actuality in 1st position.
I second what @Russell Brazil said. Recently purchased a condo in Washington DC that was foreclosed on, and although it was listed as REO on the MLS, a lien by the HOA had also been placed. For the deed to be properly transferred to me, that lien had to be paid off in full (the HOA would not allow the sale to go through otherwise). Fortunately I was able to force the bank to cover that cost since they were desperate to get it off their books.
To answer your other questions: property taxes should be pro-rated, HOA fees wouldn't necessarily be. If you close on the 5th of the month, then by default the seller should have already paid the fees for that month (assuming they are due on the 1st) and you wouldn't be responsible until the following month. That was my experience though, I suppose each HOA and/or seller could treat things differently.
This doesn't really make sense. Any DC attorneys in the group? I found some information from 2014 stating that only 6 months of assessments are super priority. Meaning that 6 months would need to be paid at a foreclosure sale of the first mortgage and the remaining would be wiped in 2nd position.
What year did this change?
I did some research. Below is from the DC code. Check out the Bold/underlined sentence. As it reads look like I would only at the most be liable for 6 months of condo fees.. and maybe none since the 6-month super priority reads like it's mostly about when a condo association foreclosures on a unit not when a first mortgage forecloses.
(i) Upon any voluntary transfer of a legal or equitable interest in a condominium unit, except as security for a debt, all unpaid common expense assessments or installments thereof then due and payable from the grantor shall be paid or else the grantee shall become jointly and severally liable with the grantor subject to the provisions of subsection (h) of this section. Upon any involuntary transfer of a legal or equitable interest in a condominium unit, however, the transferee shall not be liable for such assessments or installments thereof as became due and payable prior to his acquisition of such interest. To the extent not collected from the predecessor in title of such transferee, such arrears shall be deemed common expenses, collectible from all unit owners (including such transferee) in proportion to their liabilities for common expenses pursuant to § 42-1903.12(c).
Don’t know about your HOA lien priority there but property taxes are Not prorated in a foreclosure auction.....they stay with the property and buyer will be responsible for All past property taxes. Proration only happens in a normal sale where the seller is paying their proper portion.
Read the DC code all you want and misinterpret it. The fact is condo associations have priority in DC. A condo association can foreclose and wipe out all other ownership interests including the mortgage. This is not some big secret, but a well known fact in DC.
Chase Condo Association v. JP Morgan Chase, Liu v. Us Bank, US Bank v. Greenparks.
Lenders continue to try to fight this fact and continually lose.
@Russell Brazil "Read all the DC code you want and Misinterpret it? " Wow, condescending much? The case of Chase Condo Association v. JP Morgan Chase, Liu v. Us Bank, US Bank v. Greenparks was a condo association foreclosing Not a first mortgage foreclosing. They are treated differently.
Sorry if it sounded condescending. Call any title attorney and ask them if they would issue title insurance on the condo if the association lien is not released. The answer will be no, because that associations lien does not get wiped out, they will still have the ability to foreclose.