.jpg)
Is CA HOA lien senior to 1st mortgage? Discussion.
Good questions!!! Not me.
Best Regards,
Sharon C. Hughes
Hughes & Dunstan, LLP
21650 Oxnard Street, Suite 1960
Woodland Hill, CA 91367Tel: 818-715-9558x1
Fax: 818-715-9559
Email: schug98@aol.com
A/V rated by The Martindale-Hubbell Law Directory
www.hughesanddunstan.com
To: cdcbaa
Sent: Fri, Jan 20, 2012 11:14 am
Subject: Re: [cdcbaa] Is CA HOA lien senior to 1st mortgage? Discussion.
So who would ever pay say $10,000 for the HOA's lien at an HOA's sale for a house value say $250,000; when the existing mortgage is say $400,000? The buyer has just spent $10,000 to purchase the house from the HOA's foreclosure sales, but his/her purchased from the HOA is useless. What am I missing? Why would anybody buy it from the HOA foreclosure sale if the property is still subject to the 400,000 mortgage when house is only worth 250,000?
Paul Horn Attorney at Law Certified Public Accountant 850 E. Las Tunas Drive San Gabriel, CA 91776 800-380-7076
The post was migrated from Yahoo.
Perhaps somebody who could make the existing mortgage payments, assuming
the banks were willing to take them (a big assumption)
On Fri, Jan 20, 2012 at 11:14 AM, Paul Horn wrote:
> So who would ever pay say $10,000 for the HOA's lien at an HOA's sale for
> a house value say $250,000; when the existing mortgage is say $400,000?
> The buyer has just spent $10,000 to purchase the house from the HOA's
> foreclosure sales, but his/her purchased from the HOA is useless. What am I
> missing? Why would anybody buy it from the HOA foreclosure sale if the
> property is still subject to the 400,000 mortgage when house is only worth
> 250,000?
>
> Paul Horn Attorney at Law Certified Public Accountant 850 E. Las Tunas
> Drive San Gabriel, CA 91776 800-380-7076
> ------------------------------
> *From:* Sharon Hughes
> *To:* cdcbaa@yahoogroups.com
> *Sent:* Friday, January 20, 2012 11:04 AM
>
> *Subject:* Re: [cdcbaa] Is CA HOA lien senior to 1st mortgage? Discussion.
>
> When HOA forecloses its lien the sale is for the amount of its lien, and
> property is subject to the existing mortgages, tax liens, etc. I just
> obtained a judgment quieting title to property that my client's purchase at
> a HOA lien foreclosure sale.
>
> Best Regards,
> Sharon C. Hughes
> Hughes & Dunstan, LLP
> 21650 Oxnard Street, Suite 1960
> Woodland Hill, CA 91367Tel: 818-715-9558x1
> Fax: 818-715-9559
> Email: *schug98@aol.com*
> A/V rated by The Martindale-Hubbell Law Directory
> www.hughesanddunstan.com
>
>
> -----Original Message-----
> To: cdcbaa
> Sent: Fri, Jan 20, 2012 8:55 am
> Subject: Re: [cdcbaa] Is CA HOA lien senior to 1st mortgage? Discussion.
>
> Hi Jim,
> If HOA foreclosed, does the HOA get their portion of the $$$$ lien and
> the rest goes to the mortgage lender? Or is it that proceed has to satisfy
> priority mortgage lender first, then they get the remaining, if any?
>
> Thanks
>
> Paul Horn Attorney at Law Certified Public Accountant 850 E. Las Tunas
> Drive San Gabriel, CA 91776 800-380-7076
> ------------------------------
> *From:* Jim Selth
> *To:* "cdcbaa@yahoogroups.com"
> *Sent:* Friday, January 20, 2012 8:36 AM
> *Subject:* RE: [cdcbaa] Is CA HOA lien senior to 1st mortgage? Discussion.
>
>
> Ive had several clients recently where the HOA recorded a Notice of
> Default and Notice of Trustees Sale, but the sale has just been repeatedly
> continued. Does everyone agree that an HOA is bound by the same
> anti-deficiency provisions of CCP 580d as a foreclosing lender? My sense
> is that HOA foreclosure proceedings are usually a bluff, since all they
> accomplish is taking title to a property with no equity above the existing
> liens, and under 580d they lose their ability to sue the homeowner for the
> unpaid HOA fees (except for prepetition fees discharged in bankruptcy).
>
> Jim
>
> James R. Selth
> Certified Bankruptcy Specialist*
> Weintraub & Selth, APC
> 11766 Wilshire Boulevard, Suite 1170
> Los Angeles, California 90025
> Telephone: (310) 207-1494
> Facsimile: (310) 442-0660
> E-Mail: jim@wsrlaw.net
>
> *Certified by State Bar of California as Certified Legal Specialist in
> Bankruptcy Law
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com]
> *On Behalf Of *Link W. Schrader
> *Sent:* Friday, January 13, 2012 5:10 PM
> *To:* cdcbaa@yahoogroups.com
> *Subject:* RE: [cdcbaa] Is CA HOA lien senior to 1st mortgage? Discussion.
>
>
> Hi Nicholas,
>
> Do you disagree that a chapter 13 discharge discharges prepetition debt
> and that the chapter 13 debtor must stay current on postpetition debt
> obligations?
>
> The Ninth Circuit BAP has rejected your argument,* at least where the
> Chapter 13 debtor continues to occupy the property postpetition. In re
> Foster (9th Cir. BAP 2010) 435 BR 650,659 we doubt the omission of
> Section 1328(a) in Section 523(a)16 or vice versa evinces a legislative
> intent to discharge postpetition HOA dues under Section 1328(a) when the
> debtor uses the cure and maintenance provisions under chapter 13 to stay in
> his or her property after the order for relief. *
> * *
> *Moreover, in most states (California included, see Calif. Civ. C.
> Section 1468), HOA fees and assessments are obligations that run with the
> land, and thus are secured claims that cannot be discharged in bankruptcy.
> In re Foster (9th Cir. BAP 2010) 435 BR 660-661 (decided under Washington
> law).*
> * *
> The above in bold comes directly from the California Bankruptcy Practice
> Rutter Guide.
>
> *Link Schrader, Attorney*
> Law Office of Link W. Schrader
> Mail: P.O. Box 3723, Tustin, CA 92781
> Office: 106 W. 4th Street, Suite #308, Santa Ana, CA 92701
> Orange County: (714) 542-5922; Los Angeles: (310) 413-6924
> San Diego: (619) 952-8342; Fax: (310) 878-4158
> www.schrader-law.com
>
> ______________________________________________________________________________________________________
> *This communication and any files transmitted with it contain information
> which is confidential and may be privileged and exempt from disclosure
> under applicable law. It is intended solely for the use of the individual
> or intended recipient. You are hereby notified that any use, dissemination
> or copying of this communication is strictly prohibited. If you have
> received this communication in error, please notify the sender. Thank you
> for your cooperation.*
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com]
> *On Behalf Of *Nicholas Gebelt
> *Sent:* Friday, January 13, 2012 5:00 PM
> *To:* cdcbaa@yahoogroups.com
> *Cc:* Nicholas Gebelt
> *Subject:* RE: [cdcbaa] Is CA HOA lien senior to 1st mortgage? Discussion.
>
>
> Dear Link,
>
> There is one error in your disquisition on HOA dues. Postpetition HOA
> dues are dischargeable in a Chapter 13 if the debtor completes the plan.
> The list of nondischargeable debts in a discharge under 1328(a) is found
> - unsurprisingly - in 1328(a), and does not include 523(a)(16) within
> its ambit. However, a hardship discharge under 1328(b) does not
> discharge HOA dues because 1328(c) includes all of 523(a) in its scope.
>
> Other than that one quibble, I liked your discussion.
>
> Nick
>
> Nicholas Gebelt, Ph.D., J.D.
> Certified Bankruptcy Specialist
>
> [image: Description: cid:image003.jpg@01CC076B.B14D73C0]
>
> Law Offices of Nicholas Gebelt
> 15150 Hornell Street
> Whittier, CA 90604
> Phone: 562.777.9159
> FAX: 562.946.1365
> Email: ngebelt@goodbye2debt.com; ngebelt@gebeltlaw.com
> Web: www.goodbye2debt.com
> Blog: www.southerncaliforniabankruptcylawblog.com/
>
> *We are a debt relief agency. We help people file for bankruptcy relief
> under the Bankruptcy Code.*
>
> *Confidentiality Note*: This e-mail is intended only for the person or
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>
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On
> Behalf Of *Steven B. Lever
> *Sent:* Wednesday, January 11, 2012 6:32 PM
> *To:* cdcbaa@yahoogroups.com
> *Subject:* RE: [cdcbaa] Is CA HOA lien senior to 1st mortgage? Discussion.
>
>
> Link:
>
> I hope you dont mind, but I copied and pasted that email into my research
> file in case I ever need it. I assume there is no copyrighted material in
> there. Thanks for making all that clear. Im running into HOA issues left
> and right now.
>
> Steve Lever
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On
> Behalf Of *Link W. Schrader
> *Sent:* Wednesday, January 11, 2012 10:36 AM
> *To:* cdcbaa@yahoogroups.com
> *Subject:* RE: [cdcbaa] Is CA HOA lien senior to 1st mortgage? Discussion.
>
>
> HOA assessments are unsecured unless the HOA records a lien. The Davis
> Stirling Act trumps any language in the CC&Rs to the contrary. There are
> specific steps the HOA must perform to record a secured interest, a lien.
> If the HOA does not follow these steps they can be forced to release any
> lien filed in error, pay the homeowners attorney fees, and start the
> process all over.
>
> If the HOA does record a valid lien it still falls into line after
> previously recorded lienholders and, therefore, HOAs are more commonly
> turning to small claims court to collect rather than going through the
> process of lien recording.
>
> Unsecured prepetition HOA assessments are dischargeable in any chapter.
> Postpetition HOA assessments are not dischargeable in any chapter (see 11
> USC 523(a)(16).
>
> California Civil Code Section1466 provides that No one, merely by reason
> of having acquired an estate subject to a covenant running with the land,
> is liable for a breach of the covenant before he acquired the estate, or
> after he has parted with it or ceased to enjoy its benefits.
>
> This section is used by banks to avoid paying HOA fees after they take
> ownership of a condo through foreclosure. For this reason, lenders
> frequently avoid transferring title until they are ready to deal with the
> property. In some instances this can be a year or more after the homeowner
> has surrendered the property to the mortgage lender.
>
> Some aggressive HOAs file a state lawsuit against the former homeowners
> for all assessments from the date of filing bankruptcy to the date of
> transfer of title. The claim is that the assessments were not discharged
> in bankruptcy and are, therefore a personal obligation of the debtors.
>
> I have only found one California case on point, Cerro De Alcala Homeowners
> Association v. Burns, 169 Cal.App.3d Supp:1, 216 Cal.Rptr. 84 (1985). In
> this case, the homeowner merely vacated the property after the first lender
> notified the homeowner that it was enforcing the due on sale clause and
> would commence foreclosure proceedings. The San Diego Appellate Court held
> that the homeowner was liable for the HOA dues including those accruing
> after the homeowner vacated the property. The reasoning was that the
> homeowner continued to enjoy certain benefits (i.e. could have rented or
> re-entered the property) and could not avoid HOA assessments merely by
> physically removing himself from the property.
>
> A different decision might be found where the homeowners filed bankruptcy
> and surrendered the property as provided in their Statement of Intention,
> and left all keys according to the instructions of the mortgage lender. If
> the HOA was listed in the bankruptcy petition, they arguably had notice
> that the homeowner surrendered the property. In one case I know of where
> an HOA is trying to collect under along the lines as set forth above, the
> bank hired a management company to put notice on the property, but did not
> transfer title for 18 months after the debtors surrendered the property.
>
> A Florida case recently held that a bank that delayed transferring title
> after taking possession in order to avoid paying HOA dues, was liable for a
> portion of the HOA dues. Im not sure of the cite on that case, but it is
> recent.
>
> The advice I give to debtors who will be surrendering property in an HOA,
> is to remain on the property and keep current with HOA dues until title the
> property is sold, or until some agreement is reached with the mortgage
> lender and the HOA. Otherwise, the debtors may be looking at a collection
> action by the HOA long after their chapter 7 bankruptcy discharge has been
> entered. The debtors can also take advantage of the cheap rent (HOA dues
> only) for a period of time after filing.
>
> Finally, and perhaps obvious to most, even if the HOA has recorded a lien,
> it is secured by the property and need not be paid if the property is to be
> surrendered.
>
> Cheers,
>
> *Link Schrader, Attorney*
> Law Office of Link W. Schrader
> Mail: P.O. Box 3723, Tustin, CA 92781
> Office: 106 W. 4th Street, Suite #308, Santa Ana, CA 92701
> Orange County: (714) 542-5922; Los Angeles: (310) 413-6924
> San Diego: (619) 952-8342; Fax: (310) 878-4158
> www.schrader-law.com
>
> ______________________________________________________________________________________________________
> *This communication and any files transmitted with it contain information
> which is confidential and may be privileged and exempt from disclosure
> under applicable law. It is intended solely for the use of the individual
> or intended recipient. You are hereby notified that any use, dissemination
> or copying of this communication is strictly prohibited. If you have
> received this communication in error, please notify the sender. Thank you
> for your cooperation.*
> ------------------------------
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Kirk Brennan, esq.
California Law Office, P.C.
calibankrutpcysite.com
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letters containing the signature of a director.
Perhaps somebody who could make the existing mortgage payments, assuming the banks were willing to take them (a big assumption)On Fri, Jan 20, 2012 at 11:14 AM, Paul Horn <attorneypaul2000@yahoo.com> wrote:
So who would ever pay sa
The post was migrated from Yahoo.
So who would ever pay say $10,000 for the HOA's lien at an HOA's sale for a house value say $250,000; when the existing mortgage is say $400,000?oreclosure sales, but his/her purchased from the HOA is useless. What am I missing? Why would anybody buy it from the HOA foreclosure sale if the property is still subject to the 400,000 mortgage when house is only worth 250,000?
Paul Horn
Attorney at Law
Certified Public Accountant
850 E. Las Tunas Drive
San Gabriel, CA 91776
800-380-7076
________________________________
To: cdcbaa@yahoogroups.com
Sent: Friday, January 20, 2012 11:04 AM
Subject: Re: [cdcbaa] Is CA HOA lien senior to 1st mortgage? Discussion.
When HOA forecloses its lien the sale is for the amount of its lien, and property is subject to the existing mortgages, tax liens, etc. I just obtained a judgment quieting title to property that my client's purchase at a HOA lien foreclosure sale.
Best Regards,Sharon C. Hughes
Hughes & Dunstan, LLP
21650 Oxnard Street, Suite 1960
Woodland Hill, CA 91367Tel: 818-715-9558x1
Fax: 818-715-9559
Email: schug98@aol.com
A/V rated by The Martindale-Hubbell Law Directory
www.hughesanddunstan.com
To: cdcbaa
Sent: Fri, Jan 20, 2012 8:55 am
Subject: Re: [cdcbaa] Is CA HOA lien senior to 1st mortgage? Discussion.
Hi Jim,
If HOA foreclosed, does the HOA get their portion of the $$$$ lien and the rest goes to the mortgage lender? Or is it that proceed has to satisfy priority mortgage lender first, then they get the remaining, if any?
Thanks
Paul Horn Attorney at Law Certified Public Accountant 850 E. Las Tunas Drive San Gabriel, CA 91776 800-380-7076
________________________________
To: "cdcbaa@yahoogroups.com"
Sent: Friday, January 20, 2012 8:36 AM
Subject: RE: [cdcbaa] Is CA HOA lien senior to 1st mortgage? Discussion.
Ive had several clients recently where the HOA recorded a Notice of Default and Notice of Trustees Sale, but the sale has just been repeatedly continued. Does everyone agree that an HOA is bound by the same anti-deficiency provisions of CCP 580d as a foreclosing lender? My sense is that HOA foreclosure proceedings are usually a bluff, since all they accomplish is taking title to a property with no equity above the existing liens, and under 580d they lose their ability to sue the homeowner for the unpaid HOA fees (except for prepetition fees discharged in bankruptcy).
Jim
James R. Selth
Certified Bankruptcy Specialist*
Weintraub & Selth, APC
11766 Wilshire Boulevard, Suite 1170
Los Angeles, California 90025
Telephone: (310) 207-1494
Facsimile: (310) 442-0660
E-Mail: jim@wsrlaw.net
*Certified by State Bar of California as Certified Legal Specialist in Bankruptcy Law
From:cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] On Behalf Of Link W. Schrader
Sent: Friday, January 13, 2012 5:10 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] Is CA HOA lien senior to 1st mortgage? Discussion.
Hi Nicholas,
Do you disagree that a chapter 13 discharge discharges prepetition debt and that the chapter 13 debtor must stay current on postpetition debt obligations?
The Ninth Circuit BAP has rejected your argument,at least where the Chapter 13 debtor continues to occupy the property postpetition. In re Foster (9th Cir. BAP 2010) 435 BR 650,659 we doubt the omission of Section 1328(a) in Section 523(a)16 or vice versa evinces a legislative intent to discharge postpetition HOA dues under Section 1328(a) when the debtor uses the cure and maintenance provisions under chapter 13 to stay in his or her property after the order for relief.
Moreover, in most states (California included, see Calif. Civ. C. Section 1468), HOA fees and assessments are obligations that run with the land, and thus are secured claims that cannot be discharged in bankruptcy. In re Foster (9th Cir. BAP 2010) 435 BR 660-661 (decided under Washington law).
The above in bold comes directly from the California Bankruptcy Practice Rutter Guide.
Link Schrader, Attorney
Law Office of Link W. Schrader
Mail: P.O. Box 3723, Tustin, CA 92781
Office: 106 W. 4th Street, Suite #308, Santa Ana, CA 92701
Orange County: (714) 542-5922; Los Angeles: (310) 413-6924
San Diego: (619) 952-8342; Fax: (310) 878-4158
www.schrader-law.com
The post was migrated from Yahoo.
When HOA forecloses its lien the sale is for the amount of its lien, and property is subject to the existing mortgages, tax liens, etc. I just obtained a judgment quieting title to property that my client's purchase at a HOA lien foreclosure sale.
Best Regards,
Sharon C. Hughes
Hughes & Dunstan, LLP
21650 Oxnard Street, Suite 1960
Woodland Hill, CA 91367Tel: 818-715-9558x1
Fax: 818-715-9559
Email: schug98@aol.com
A/V rated by The Martindale-Hubbell Law Directory
www.hughesanddunstan.com
To: cdcbaa
Sent: Fri, Jan 20, 2012 8:55 am
Subject: Re: [cdcbaa] Is CA HOA lien senior to 1st mortgage? Discussion.
Hi Jim,
If HOA foreclosed, does the HOA get their portion of the $$$$ lien and the rest goes to the mortgage lender? Or is it that proceed has to satisfy priority mortgage lender first, then they get the remaining, if any?
Thanks
Paul Horn Attorney at Law Certified Public Accountant 850 E. Las Tunas Drive San Gabriel, CA 91776 800-380-7076
The post was migrated from Yahoo.
Hi Jim,
If HOA foreclosed, does the HOA get their portion of the $$$$ lien and the rest goes to the mortgage lender? Or is it that proceed has to satisfy priority mortgage lender first, then they get the remaining, if any?
Thanks
Paul Horn
Attorney at Law
Certified Public Accountant
850 E. Las Tunas Drive
San Gabriel, CA 91776
800-380-7076
________________________________
To: "cdcbaa@yahoogroups.com"
Sent: Friday, January 20, 2012 8:36 AM
Subject: RE: [cdcbaa] Is CA HOA lien senior to 1st mortgage? Discussion.
Ive had several clients recently where the HOA recorded a Notice of Default and Notice of Trustees Sale, but the sale has just been repeatedly continued. Does everyone agree that an HOA is bound by the same anti-deficiency provisions of CCP 580d as a foreclosing lender? My sense is that HOA foreclosure proceedings are usually a bluff, since all they accomplish is taking title to a property with no equity above the existing liens, and under 580d they lose their ability to sue the homeowner for the unpaid HOA fees (except for prepetition fees discharged in bankruptcy).
Jim
James R. Selth
Certified Bankruptcy Specialist*
Weintraub & Selth, APC
11766 Wilshire Boulevard, Suite 1170
Los Angeles, California 90025
Telephone: (310) 207-1494
Facsimile: (310) 442-0660
E-Mail: jim@wsrlaw.net
*Certified by State Bar of California as Certified Legal Specialist in Bankruptcy Law
From:cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] On Behalf Of Link W. Schrader
Sent: Friday, January 13, 2012 5:10 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] Is CA HOA lien senior to 1st mortgage? Discussion.
Hi Nicholas,
Do you disagree that a chapter 13 discharge discharges prepetition debt and that the chapter 13 debtor must stay current on postpetition debt obligations?
The Ninth Circuit BAP has rejected your argument,at least where the Chapter 13 debtor continues to occupy the property postpetition. In re Foster (9th Cir. BAP 2010) 435 BR 650,659 we doubt the omission of Section 1328(a) in Section 523(a)16 or vice versa evinces a legislative intent to discharge postpetition HOA dues under Section 1328(a) when the debtor uses the cure and maintenance provisions under chapter 13 to stay in his or her property after the order for relief.
Moreover, in most states (California included, see Calif. Civ. C. Section 1468), HOA fees and assessments are obligations that run with the land, and thus are secured claims that cannot be discharged in bankruptcy. In re Foster (9th Cir. BAP 2010) 435 BR 660-661 (decided under Washington law).
The above in bold comes directly from the California Bankruptcy Practice Rutter Guide.
Link Schrader, Attorney
Law Office of Link W. Schrader
Mail: P.O. Box 3723, Tustin, CA 92781
Office: 106 W. 4th Street, Suite #308, Santa Ana, CA 92701
Orange County: (714) 542-5922; Los Angeles: (310) 413-6924
San Diego: (619) 952-8342; Fax: (310) 878-4158
www.schrader-law.com
The post was migrated from Yahoo.
I've had several clients recently where the HOA recorded a Notice of Default and Notice of Trustee's Sale, but the sale has just been repeatedly continued. Does everyone agree that an HOA is bound by the same anti-deficiency provisions of CCP 580d as a foreclosing lender? My sense is that HOA foreclosure proceedings are usually a bluff, since all they accomplish is taking title to a property with no equity above the existing liens, and under 580d they lose their ability to sue the homeowner for the unpaid HOA fees (except for prepetition fees discharged in bankruptcy).
Jim
James R. Selth
Certified Bankruptcy Specialist*
Weintraub & Selth, APC
11766 Wilshire Boulevard, Suite 1170
Los Angeles, California 90025
Telephone: (310) 207-1494
Facsimile: (310) 442-0660
E-Mail: jim@wsrlaw.net
*Certified by State Bar of California as Certified Legal Specialist in Bankruptcy Law
The post was migrated from Yahoo.
Dear Link and Steve,
My reasoning was connected to 1305(a)(2) (which I neglected to include in my previous email):
A proof of claim may be filed by any entity that holds a claim against the debtor- . . . (2) that is a consumer debt, that arises after the date of the order for relief under this chapter, and that is for property or services necessary for the debtor's performance under the plan.
I agree that the debtor is supposed to remain current on postpetition obligations. However, if the debtor were to fall behind on HOAs postpetition, and if the HOA filed a proof of claim for those unpaid postpetition dues, I reasoned that that debt would be dischargeable under 1328(a) due to the exclusion of 523(a)(16) from that subsection. In other words, the HOA's claim would be paid at the same percentage as the general unsecured creditors and the unpaid portion would be discharged upon plan completion.
I was unaware of the case mentioned by Link off-list. He wrote:
The Ninth Circuit BAP has rejected your argument, at least where the Chapter 13 debtor continues to occupy the property postpetition. In re Foster (9th Cir. BAP 2010) 435 BR 650,659 - "we doubt the omission of Section 1328(a) in Section 523(a)16 or vice versa evinces a legislative intent to discharge postpetition HOA dues under Section 1328(a) when the debtor uses the cure and maintenance provisions under chapter 13 to stay in his or her property after the order for relief."
I therefore stand corrected, at least in the case of the debtor remaining in the property.
However, the BAP's caveat: ". . . when the debtor uses the cure and maintenance provisions under chapter 13 to stay in his or her property after the order for relief," suggests to me that if the debtor surrenders the property, the postpetition HOAs are discharged under 1328(a), even if there is a considerable time lag between surrender and title transfer. This is in contradistinction to the unfortunate Chapter 7 situation where a debtor surrenders the property in bankruptcy, but remains liable for postpetition HOAs that come due prior to title transfer.
In sum, my statement was too sweeping, but not all of its content should be swept away by the Foster holding.
All the best,
Nick
Nicholas Gebelt, Ph.D., J.D.
Certified Bankruptcy Specialist
[cid:image001.jpg@01CCD222.44C4A200]
Law Offices of Nicholas Gebelt
15150 Hornell Street
Whittier, CA 90604
Phone: 562.777.9159
FAX: 562.946.1365
Email: ngebelt@goodbye2debt.com; ngebelt@gebeltlaw.com
Web: www.goodbye2debt.com
Blog: www.southerncaliforniabankruptcylawblog.com/
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Nick;
That makes no sense to me. According to your reading of the Code, a Debtor can just shine off his HOA dues while in Chapter 13, and so long as the HOA makes no administrative claim, or does not go for relief from stay to foreclose on this postpetition default, they are discharged, and the Debtor gets to live there dues free throughout the pendency of the Chapter 13 case.
If you're right, a snoozing HOA is toast, but I'm having difficulty fathoming this scenario.
Steve
Law Offices of Steven B. Lever
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Hi Nicholas,
Do you disagree that a chapter 13 discharge discharges prepetition debt and that the chapter 13 debtor must stay current on postpetition debt obligations?
The Ninth Circuit BAP has rejected your argument, at least where the Chapter 13 debtor continues to occupy the property postpetition. In re Foster (9th Cir. BAP 2010) 435 BR 650,659 - "we doubt the omission of Section 1328(a) in Section 523(a)16 or vice versa evinces a legislative intent to discharge postpetition HOA dues under Section 1328(a) when the debtor uses the cure and maintenance provisions under chapter 13 to stay in his or her property after the order for relief."
Moreover, in most states (California included, see Calif. Civ. C. Section 1468), HOA fees and assessments are obligations that run with the land, and thus are secured claims that cannot be discharged in bankruptcy. In re Foster (9th Cir. BAP 2010) 435 BR 660-661 (decided under Washington law).
The above in bold comes directly from the California Bankruptcy Practice Rutter Guide.
Link Schrader, Attorney
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Dear Link,
There is one error in your disquisition on HOA dues. Postpetition HOA dues are dischargeable in a Chapter 13 if the debtor completes the plan. The list of nondischargeable debts in a discharge under 1328(a) is found - unsurprisingly - in 1328(a), and does not include 523(a)(16) within its ambit. However, a hardship discharge under 1328(b) does not discharge HOA dues because 1328(c) includes all of 523(a) in its scope.
Other than that one quibble, I liked your discussion.
Nick
Nicholas Gebelt, Ph.D., J.D.
Certified Bankruptcy Specialist
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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
Confidentiality Note: This e-mail is intended only for the person or entity to which it is addressed and may contain information that is privileged, confidential, or otherwise protected from disclosure. Dissemination, distribution, or copying of this e-mail or the information herein by anyone other than the intended recipient, or an employee or agent responsible for delivering the message to the intended recipient, is prohibited. If you have received this e-mail in error, please notify us immediately at 562.777.9159 or e-mail info@gebeltlaw.com and destroy the original message and all copies.
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