H.O.A. foreclosure then Bank foreclosure

[Chris Copenhaver]

I'm purchasing a bank owned home from homesearch.com which is occupied.  The h.o.a. foreclosed back on 1/10/2015 then the bank foreclosed 1/12/2016. The bank is saying I need to pay back h.o.a. fees for the past year. My question is isn't the lien from the h.o.a. wiped out once they foreclosed? Furthermore the h.o.a. rented the property immediately after taking possesion in 2015 at $1600 a month. I'm buying the home with the current tenant they placed in the property. The bank says since it is occupied I'm responsible.  Anyone ever had this happen or have any thoughts??

[Wayne Brooks]

A couple of different issues/laws in effect. Neither you, nor the bank, is liable for the dues during the time the association owned it, the association is, period, and that is not in question. The other issue is the past debt, that led to the HOA foreclosure. That debt still existed when the HOA took it over, and my attorney says rents they received while they rented it out (less the ongoing monthly dues, any maintenance/repair costs, a reasonable management fee) gets applied to the past debt. There is another BP member going thru this exact situation in Miami right now. Also, I assume the bank named/served the association in their foreclosure.....if so, as to the past debt, the association is only due the lesser of 12 months of dues, or 1% of the original mortgage. The association is likely to bluff and not sign off on the debt being paid, and the bank will exclude that from their title insurance coverage. Assuming the bank properly named/served (and didn't do any Mtg assignments after the final judgment) I'd buy it knowing your max exposure would be that 1%.