Clarification of Responsibility For Debt of HOA or Condo Assn After Foreclosure

 I received an email asking a question about a former blog I did. Here it is – along with the clarification:

“I recently read one of your blogs…and one thing wasn’t clear. Here is a copy of the Question and your Answer as it appeared:

Q2: If the HOA does not record a lien for unpaid fees, and if there is a Trustee’s Sale by the 1st mortgagee, do those unpaid HOA fees just evaporate forever and become a permanent loss to the HOA?

Answer: No, again, the HOA can proceed against the owner. If they file bankruptcy however, then the bankruptcy “rules” kick in.

In your answer, are you referring to the previous ‘owner’ who defaulted, or the new ‘owner’ that purchased the property at the foreclosure sale? Because my questions is whether, under California State Law, the ‘new owner’ is liable for the previously unpaid HOA fees (i.e. those incurred prior to the sale date) “

 

Thanks, my answer is – it is the former owner. The HOA or Condo Association can pursue the individial former owner who was subject to the assessment debt that was evidenced by the lien. The lien against the property is usually extinguished in a first mortgage holder’s foreclosure, but the debt is not.

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