So, recently I heard a comment from another agent that there should be no problem with a Homeowners Association if you are trying to short sale your property. The comment was that “they will take what is left” in settlement of Homeowner’s fees that are due and will release the lien.
Well that hasn’t been my experience when dealing with a Homeowners Association and in fact they can stop your short sale in it’s tracks if they are unwilling to negotiate a settlement of what is due. At times the Homeowners Association fees can be included on the HUD and the bank may pay a part of the amount or the entire amount depending on the what is owed, who the investor is and what current laws or programs are in place at a particular time.
Often a Homeowners Association is unwilling to negotiate or accept less than the entire amount because “if they do it for one they will have to do it for all”. They can find themselves in a situation where homeowners simply want to pay less and are not in financial distress at all. The argument is if you don’t cooperate and accept the payment the bank offers that will lead to a foreclosure and that is worse for the building however it may not be worse for the other homeowners….
If possible keeping your HOA fees paid and up to date is the best practice…if you can’t pay them they may interfere with your ability to move forward on a short sale because the lien won’t be lifted and you will not be able to provide clean title.