HOA Foreclosing on Deeply Underwater Condo Is this a =
Posted: Sun Nov 04, 2012 8:08 am
Hello:
Does an owner want to do a Chapter 13 if the property is underwater?
Q: What is the advantage of a C13 in the case it is underwater?
A: I believe any fully unsecured TD or TDs could be stripped in a C13.
Q: But can the accrued HOA fees be stripped too or their lien removed?
Q: What am I missing?
Thanks
Robert Suhajda
In a message dated 11/3/2012 5:55:21 P.M. Pacific Daylight Time,
lschrader@schrader-law.com writes:
I believe Steven is correct on Civ. Code Section 1367.4(c)(4) that the
owner would have a 90 day right of redemption (and appreciate Steven catching
this). I dont believe a right of redemption typically exists in a
nonjudicial sale and Section 1367.4(c)(4) thus requires the HOA to include in the
notice of sale a statement that the property is being sold subject to theright of redemption created by 1367.4(c)(4). There may be some risk if the
property is sold to a bona fide purchaser without such a statement. The
risk, in my opinion, would be that the HOA would be liable for damages butthe BFP might be able to keep the property.
Code Civ. Proc. Section 729.035 likewise says that the right of redemptionis subject to the conditions of Section 1367.4 of the Civil Codeleads me to believe the right of redemption would be contingent on the HOAincluding the required statement in the notice of sale.
There are several other requirements listed in 1367 and if the HOA has notfollowed the procedures correctly you might be able to slow down the
process. I dont have my Condo Bluebook with me, but Im aware that there is a
statute that provides that an HOA must pay the cost of removing an
improper lien (that didnt follow the codes procedures) and includes attorney
fees.
The pre-order link for the 2013 Condo Bluebook is
_www.condobook.com/pre-order_
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