Saturday
September 20, 2014

HOAs Use Short Sales to Recoup Unpaid Dues

|
-A A +A

HOAs Use Short Sales to Recoup Unpaid Dues

Homeowner associations (HOAs) across the country have struggled during the foreclosure crisis, finding themselves up against an unprecedented number of owners who were not paying their association dues. 

In the past, HOAs would file liens and start foreclosures when owners failed to pay their dues. But HOAs found that after the time-consuming, costly process, they would rarely recover any money. This has prompted HOAs to try to different tactics in recovering lost dues. 

Some HOAs are postponing foreclosure auctions and instead trying to encourage delinquent home owners to do a short sale. While a short sale won’t always guarantee these organizations will reoup their unpaid dues, HOAs view it as a way to more quickly get in a new home owner who will pay dues. 

Some HOAs have found that the short-sale route can be more successful than foreclosures in getting some unpaid dues recouped over. For example, Elena Koshechko with Carolinas Metro Realty told The Charlotte Observer that she recently completed a short sale for a home on which the HOA was foreclosing. The short sale ended up getting the homeowners association back $9,000 in unpaid dues, which it otherwise would not have received if the foreclosure had proceeded. 

Source: “Homeowners Associations Find Short Sales an Option to Recoup Losses,” The Charlotte Observer (Feb. 28, 2013)