HOAleader.com - Tip of the Week - December 19, 2014
Published: Fri, 12/19/14
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Want to Report HOA Delinquencies to Credit Agencies? May Not Be Wise
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An HOAleader.com reader asks if it’s permissible for an association to
report delinquent assessments and property liens associated with
delinquent assessments to credit reporting agencies. In this week’s tip,
we explain that the answer is unclear in many states. But others sometimes
can, or do, on your behalf.
“In Illinois, the way the collection system works is an association will
issue delinquency notices and file suit for nonpayment,” explains Kelly C.
Elmore, a Chicago-based principal at Kovitz Shifrin Nesbit, which
represents thousands of community associations throughout the metro
area. “If the delinquency isn’t paid, the association will obtain a
judgment. The courts are the ones who then report that judgment to the credit
agencies. It’s my understanding that it’s not reported unless and until the
court system records the judgment. And I don’t know that our statutes
address anything with respect to reporting.”
If your state doesn’t address this issue, your property manager may be able
to do this on your behalf. “As a property management company, we can report,”
explains Jenny Key, the Austin, Texas—based vice president of RealManage,
a San Rafael, Calif., association management firm that oversees
properties in Arizona, California, Colorado, Florida, Louisiana,
Nevada, and Texas. “However, we as a company typically don’t. I don’t know if
it’s because of this, but we don’t have all the information needed because we
don’t capture things like Social Security numbers.”
Your lawyer may also be able to do this on your behalf. But if your lawyer’s
like Ben Solomon, it won’t happen. “In Florida, our law firm will not do
this,” says the attorney and founder of the Association Law Group in Miami
Beach, Fla., who for more than a decade has advised more than 500
associations and also represents developers through his second law firm,
Solomon & Furshman LLP. “And I don’t believe any my colleagues in the legal
field implement that procedure.”
Find out why our experts generally agree with Solomon that it’s not a tactic
you should pursue in our new article:
http://www.hoaleader.com/members/1109.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Can You, and Should You, Report HOA Delinquencies to Credit Agencies?
An HOAleader.com reader writes, "Are HOAs capable of reporting delinquent
HOA assessments and/or property liens associated with delinquent
assessments to credit reporting agencies?"
Here we discuss whether you can do that and, more importantly, whether it's a
good idea.
Click here to read full article:
http://www.hoaleader.com/members/Can-You-Should-You-Report-HOA-Delinquencies-Credit-Agencies.cfm
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Does Helping Owners Share Rides Drive Up Your HOA's Risk?
You've heard it here from our experts before: Again and again, they say,
"Stay in your lane!" By that, they mean that your HOA shouldn't undertake
activities that fall outside the scope of the association's stated and
legal mission.
Click here to read full article:
http://www.hoaleader.com/members/Does-Helping-Owners-Share-Rides-Drive-Up-Your-HOAs-Risk.cfm
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Florida Court Rules Against Bank: How Major is the Ruling for HOAs?
A Florida appellate court has held in Bermuda Dunes Private Residences v.
Bank of America that Bank of America took title as first mortgagee to a
property--and paid less in delinquent fees to HOAs as a result--though it
didn't have the rights as the first mortgagee. How big is this ruling for HOAs
in Florida and beyond?
Click here to read full article:
http://www.hoaleader.com/members/Florida-Court-Rules-Against-Bank-How-Major-Ruling-for-HOAs.cfm
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Florida Court Smacks Bank in Foreclosure Action: Will It Matter?
In this week's tip, we discuss a recent Florida case that may--or may
not--have implications for HOAs throughout the state and beyond.
The case is Bermuda Dunes Private Residences v. Bank of America. In it, Bank
of America brought a foreclosure action against an owner in the Bermuda
Dunes condo association. It also sought from the association a final figure
for past-due assessments, and the association claimed $17,987.84 was
owed. The bank, however, claimed that amount didn't take into
consideration Florida's law allowing first mortgagees a safe harbor.
They're required to pay no more than 12 months of past-due assessments or 1%
of the amount due, whichever is less. Factoring in the safe harbor, the condo
association would be due only $2,551.20.
Click here to read full article:
http://www.hoaleader.com/members/Florida-Court-Smacks-Bank-in-Foreclosure-Action-Will-It-Matter.cfm
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Can You Use Your HOA's Operating Budget to Pay a Loan?
An HOAleader.com reader writes, "The board of a condo in Maryland in which I
am a unit owner and a newly-elected director is proposing to take out a loan
for replacing expensive building items. And it's stating, 'The loan
payment will come out of the operating budget, so obviously we would need a
budget that would cover repayment of the principal and interest.'
Click here to read full article:
http://www.hoaleader.com/members/Can-You-Use-Your-HOAs-Operating-Budget-Pay-Loan.cfm
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