Homeowner’s Associations and Liens - Posted by Rich[FL]
Posted by Rich[FL] on January 30, 2001 at 12:21:31:
We have a situation in the neighborhood where I live and I’d like your expert opinion on this question.
The developer of our residential area is currently not available, probably out of the country, and most likely in jail somewhere in Europe (according to latest reports we have). He hasn’t paid his assocation dues on the 44 lots he still owns and we guess he won’t. Our assocation will probably file liens on his properties for the assessment. I’m also guessing he won’t pay the property taxes he owes either. I’m going to keep a close eye on the tax lien sale later this year to see of these properties come up.
The question is this: if the association files liens on his properties and proceeds to foreclosure, would the tax liens remain on the properties (I’m guessing they would)? Would it make sense for the current association to try to purchase the tax liens if they come up at the sale as additional leverage (besides the assessment liens) to gain control of the property? (We’re hoping no other unscrupulous developer comes by and tries to take over like he did!)
I’m thinking that if the association gains ownership of the properties, they can sell off only 2 per year and have the same amount of operating income as if the developer were still paying on his lots. If we sold off more we could begin building a capital improvement reserve which, for reasons only the developer knows, hasn’t been done. I see many possibilities here but more importantly I don’t want to overlook the downsides.
Therefore, any helpful pointers, suggestions, etc. you can provide would be most welcome. Thanks in advance.