Q: We are about to close on a short sale in a condominium association. We understand that many of the condos are available on a short sale status in this building. We have heard that on our unit, the bank is negotiating with the builder on back HOA unpaid fees. Reading your column regularly, we see that the builder should have made efforts to foreclose on the delinquent units. Now we are concerned that when the property moves from the builder to the association all these short sale units that are not sold will be pending unpaid liabilities for the community. Can you help us to understand what the situation might be?

G.A., Naples

A: The unfortunate answer is that most of the delinquent amounts will be lost. The question is, can the developer survive the downturn in the market? The short sale has nothing to do with the delinquent amounts except that unpaid fees will be lost. When a unit is sold short, it means that a buyer will start paying fees and that is good. The sooner the units are sold, the faster the association will begin to collect fees and you will have fewer delinquent accounts. If you purchased the unit you like for a discounted price, be happy but expect a few months of hard economic times.

Q: I have recently been elected to the board and serve as president. I have run into a lack of cooperation from the other board members and members. I feel the need to quit. Since I am the president, to whom do I give my letter of resignation?

R.A., Naples

A: Normally such letters would be given to the secretary. However, if the other board members have not voted to replace you or asked you to resign, then you are doing something right. I have always said that an association operates and makes better decisions when there is opposition. It forces the directors to study and consider the best decisions. I would not resign until the directors ask you to step down. Become a better leader and motivate the directors. Give each of them a task to report on at board meetings and then praise them upon completion. Q: Hundreds of condominium associations are experiencing cash shortfalls and increasing assessments to make up the shortages. As a board member, I read every article and constantly request updates from our attorney and management company for existing liens. Your recent article stating ``you can ask the mortgage holder to take title to the unit'' is misleading to owners in lieu of today's banking crisis. Most units are heavily mortgaged with value below the first mortgage, so banks are dragging their feet to foreclose or canceling auctions. Liens can be filed but to spend additional cash that associations do not have for foreclosure proceedings in this scenario appears fruitless, yet you don't mention this alarming situation.

H.A., Tampa

A: You have a valid point. I strongly suggest fast and final action, including the expensive action of foreclosing. Your object is to get the unit paying as fast as possible and you will need an attorney's guidance. A bank will drag its feet and foreclosure can take more than two years, while the association can foreclose in a few months.

Once the association has title, it can rent, sell (possibly a short sale) or transfer the unit to the bank, if they will accept title. Why would a bank take the title? Foreclosure action is expensive and it can receive title and cut the losses. You are correct in that many banks will not accept title and will not agree to a short sale. You may be the lucky one. I recently received a question from a reader who said an owner vacated one unit and the board advised not to start action because the bank was in process of foreclosing. Then the owner moved back into the unit and declared bankruptcy. Neither the bank nor the association could apply legal action to force the owner out of his residency. What could the association do? Well, it was too late to take legal action because of the bankruptcy and now the owner is living in his home free of any debt obligation. If the board had taken fast action, it would have title to the home and could have stopped the past owner from moving back.

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