Florida HOAs Pick Up Pace On Lien Foreclosures; Reach Workouts With Unit Owners Seeking Payment Plans While Booting The Deadbeats

In Broward County, Florida, The Miami Herald reports:

• It’s not only lenders who are clogging the courts with foreclosures. Leaders at condo and homeowners associations say they have been forced to foreclose; many have then rented out the property. They need cash to pay for maintaining common areas and providing services.

• For years, many community associations rarely foreclosed. But that changed when the real estate crisis swept throughout South Florida more than three years ago and the rate of unpaid maintenance fees grew dramatically.

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• Don Urquhart and other association leaders routinely start foreclosure proceedings if owners don’t arrange to pay delinquent dues. Urquhart and other association leaders, however, say they will work with owners who try to catch up. “We will extend them time. It’s been a win-win,” Urquhart says. “We have avoided legal costs and they got back on their feet.”

• Association leaders, though, have to remain tough against those who won’t try to pay, he adds. The reason is simple: Someone has to pay to keep the lights on, the grass mowed. Urquhart’s association has already imposed a special assessment on the owners who have been paying – to cover for those who aren’t.

• Now some associations are even trying to beat banks to the courthouse to foreclose first on properties owned by deadbeat owners. The upside: They can get months – if not a year or two – of rent before the banks formally foreclose.

For more, see Homeowner associations step up foreclosure filings (Strapped for money to pay for property maintenance, many associations are foreclosing on owners who don’t pay fees, then renting the units to bring in cash).