This might be a silly question , but does anyone know what would happen if an investor don't pay the condo fees and continue to rent out the property , besides have the properties being put on lein when selling
HOA, in most states, can initiate foreclosure after putting a lien on the property. Not something I would personally mess with.
First, know it could affect your buyer's eligibility for buying it. Most programs don't allow more than 15% of the units to be late on their HOA dues as a sign of the HOA health.
In terms of how they'd pursue it depends on your HOA's CC&R's and what you or the tenant signed. Depending on that, they can sometimes:
- Pursue the tenant
- Withhold services
Then they might also, depending on their written procedure:
- File a claim for the unpaid dues and use the judgment to garnish funds or wages.
- File a lien against the property
- File a foreclosure suit, which would obviously notify your mortgage servicer of the delinquency and be a violation of your note, which could trigger other unhappy things like the servicer paying it and forcing you to pay it back with penalties - or simply calling the note due then.
@Byron Ma I would pay the HOA. They can foreclose on you. Some investors including myself look for these types of investment opportunities.
you would go from investor status to deadbeat status
two words: RENT INTERCEPT.
Most associations these days have a provision in their CC&Rs that allow them to send the tenants a rent intercept demand in addition to filing a lien. The next step would be a personal lawsuit and foreclosure steps or some combination thereof.
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