Should Buyers Pay Back HOA Dues?

By
Real Estate Agent with Prudential Calfornia Realty

What do you mean the HOA dues aren't current?

Here's another hot topic of debate for all of you out there thinking of buying a condominium or any type of property that has HOA dues every month.

 If you're looking at a property that's listed as a short sale you'd better pay specific attention before you agree to something you're not going to be happy with.

Properties listed as a short sale sometimes require the buyer, as part of the purchase, to pay the back HOA dues of the seller. Does this sound fair?

Let's take a closer look at this for a minute.

We know that the seller has stopped paying the mortgage. He would have had to because this is the only way that the bank might agree to short selling the property.

So let me now pose this questions to all of you, if the seller isn't paying the mortgage every month, what is the seller(s) doing with that money?

This now beckons another question. Why can't the seller keep up with the HOA dues since he's not making his mortgage payment? I'm confident that the HOA payment is considerably less than the mortgage payment in almost all of the cases.

Sellers are still receiving services that are paid for out of the HOA dues that they're failing to make. Does it sound fair to make someone who hasn't lived in the complex to have to come in and pay for services received by the sellers?

In my opinion sellers have a financial, ethical and moral duty to their neighbors and community to make all efforts to stay current on HOA dues.

It isn't fair to ask a buyer to pay for back HOA dues as part of the purchase of a condo or home with said monthly fees associated with the property. Do we honestly think that if the roles were reversed the current sellers would be willing to pay back HOA dues?

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delinquent hoa dues

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Rainmaker
303,021
Martin Kalisker
Synergy Metrowest, Inc. - Brookline, MA
Synergy Metrowest, Inc.: MA Real Estate & More

In Massachusetts, delinquent HOA fees have priority against the primary lien-holder (usually the lender).  Therefore, a home owners association could theoretically force the sale of a condo or home after 6 months of deliquent or non-payment.

Back-owed condo fees are always paid out of the proceeds at closing - whether it is a short sale or a foreclosure.  The buyer rarely pays for these costs.  As short sale agents, we need to be sure that we list these HOA fees on the estimated HUD-1 settlement statement showing net proceeds to the lender upon acceptance of a distressed or REO property.

Jul 01, 2010 11:01 AM #1
Rainer
101,865
Jane Pacheco
Pacheco Realty & Financial Services - Fremont, CA

Jane PachecoI've had several deals fall through because the short sale lender requires HOA past dues to be paid by the buyer, and the amount is no joke. Some lenders would absorb these past dues, it's a better alternative than foreclosure, as far as their books are concerned. But lately, more and more lenders are not touching HOA past dues, and instead are passing this to the buyer.

 

 

Jane Pacheco

Jul 01, 2010 11:14 AM #2
Rainmaker
146,806
Krista Lombardi
Prudential Calfornia Realty - San Diego, CA

Jane, yes it is crazy!  A buyer in my condo came up with 10K for past dues.

Weichert, yes HOAs can foreclose, but then they take over the mortgage....

Jul 02, 2010 09:31 AM #3
Anonymous
Anonymous

Well, as my wise old grandmother taught me, "If you don't ask for it, you surely won't get it." So I see no problem asking the Buyers to pay for back HOA dues as part of the purchase. If the Buyers don't agree, then they can renegotiate or move on to a different condo complex.

Jul 11, 2010 06:00 AM #4
Anonymous
disgruntled

We were never asked to pay them. I just found them amongst a ton of information, that we'd paid over $1000 for delinquent HOA fees. We didn't own the place, we didn't live there. Why should we get stuck with the bill? It was bank owned. THe bank OWNED it. THey should be responsible for paying it.

Jan 18, 2011 02:22 PM #5
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Rainmaker
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Krista Lombardi

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