Q: No different than most condominiums, we have been forced to make collections our hot button. We have filed liens and now have these units delinquent for over two years' fees. We have made attempts to contact the financial institution as to foreclosure dates with no response. Last month one of the owners being foreclosed upon moved back into the unit. He now is driving a new car and has a new large screen TV and cable connected. What is the problem and how can we force payment of our delinquent fees?

C.A., Miami

A: In past columns, I have urged boards to have quick and active collection policies. That included filing liens in 60 or so days and then starting foreclosure as soon as possible. In most situations, the association's foreclosure can be completed within six to eight months. If you wait for the bank to foreclose, you can wait for years. If you are able to force title transfer to the association in six to eight months, then you will have options such as renting the unit, selling it (maybe in a short sale) or possibly transferring title to the bank.

The owner is using the system. He knows the banks have flooded the court system with foreclosures and it can take years to evict him. He is living free from rent and mortgage payments, maintenance fees and now can buy the nice things with the extra money. My guess is that the bank is paying the taxes and insurance. Your board failed to take strong collection action in the beginning of his delinquent problems. Q: You recommend that the board take strong and fast action on delinquencies. We have placed liens on properties in which the first mortgage exceeds the market value of the property. We are reluctant to take them to foreclosure because a purchaser would be responsible for the mortgage, delinquent fees and other costs. Under these conditions a successful foreclosure by the association seems impossible. The association could not afford to pay off the mortgage and the bank has little interest in acquiring the properties. Is there a way out of this dilemma?

W.I., Marco Island

A: You will need an attorney's advice but here are some options: you could rent the property; ask the bank to accept the deed, thus saving it the legal cost of future foreclosure; or you could sell the property if the bank is amenable to a short sale. Proper fast action by the association can result in acquiring title in six to eight months and you are one step closer to having the property start paying.

By taking title the association is not responsible to pay the mortgage because it did not sign the note. Yes, the property is encumbered and the first mortgage in most situations will not be affected by your foreclosure, but second mortgages and home equities should be eliminated. This can mean that the first mortgage may in fact be worth less than the value of the home and the home could then be sold without a short sale.

Q: We have our insurance fund in our reserve account. Our insurance premium is due in April and we do not have the total premium collected. We would like to use the other reserve accounts to pay. Do we need to have the members approve the transfer from the other accounts since we will repay before the end of the year?

H.R., St. Petersburg

A: Understand that a reserve is for expenses in future years and not an annual expense. Therefore, insurance should be included in your annual budget and not in the reserve budget. If you read the statute involving reserves, you will not find insurance one of the items to be included in the reserve budget. If you do use reserves for the payment of premiums, the members must vote on the transfer of the funds.

Join the discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. In order to post comments, you must be a registered user of MiamiHerald.com. Your username will show along with the comments you post. Thank you for taking the time to offer your thoughts.

     Showing: Oldest first Newest first Most-recommended first Least-recommended first

@Nyx.AuthorDisplayName@ wrote on @Nyx.PostedAtTime@:

@Nyx.repliedToText@

@Nyx.replyAnswerText@

Reply to this Comment @Nyx.Recommender@ @Nyx.AbuseReporter@