Tax Deed Question: When the HOA is the current owner.

[Robert Huizar]

A Tax Deed auction 

The property (condo) has an HOA listed as the current owner after foreclosing on a loan it made to the buyer (perhaps this is represenitive of fees not paid). The property has over $35k in property taxes - I assume this means that the HOA is responsible for this property's taxes and they are the ones who have not made the payments. ( Or does the owner of a home in an HOA tract have to assign the deed to the association, [I have no HOA experience]?).

If we bid and win on this property,  the situation becomes unclear... since the property sits in a housing tract from the association, it seems that we would be taking a property away from the same association we would need to work with after the sale.  Does that sound correct?  

What is likely to happen after we win the Deed bid?  Thank you. 

[Mike Hartzog]

@Robert Huizar Likely the prior owner failed to pay both property taxes and HOA fees. HOA foreclosed, leaving the tax lien (and possible other municipal liens) which are senior. HOA may not have the capital to pay off the tax debt, but in an auction scenario they would receive any overage after tax liens are paid.

I don't think the situation is unclear if you bid and win. HOA had the opportunity to take out the tax lien and they chose not to, so they would have no reason to hold your winning the bid against you. You would simply resume paying the HOA fees and taxes. I would, however, recommend getting in touch with the HOA to determine if you can swing a deal ahead of the auction. I think the chances of getting a good deal via this route are greater than in the auction scenario. You would also avoid the clouded title issues related to the redemption period which come into play with tax deed purchases.