How To Avoid HOA Dues and Other Liability After Surrendering House

ByJon Alper Mortgage Foreclosure

A homeowner who  their homes to their mortgage company face costs and liability other than mortgage payments and possible deficiency judgments. In addition to mortgage payments the homeowner is liable for homeowner association dues and assessments that come due after the homeowner stops paying the mortgage but before the mortgage lender completes the foreclosure process. A homeowner who surrenders their home to their mortgage company face costs and liability other than mortgage payments and possible deficiency judgments. In addition to mortgage payments the homeowner is liable for homeowner association dues and assessments that come due after the homeowner stops paying the mortgage but before the mortgage lender completes the foreclosure process.

The homeowner is also personally liable for anyone who may be injured on the property until the bank completes the foreclosure process. Because it can take over a year for a mortgage lender to foreclose a homeowner who wants to abandon a property may accrue HOA for a long time.

The HOA or other party can file a lawsuit after the foreclosure sale to recover some of the unpaid  HOA payments and special assessments. Some people move out of a property before or during foreclosure thinking they have “turned over the keys” to the bank. These people are surprised when they are sued for bills and liability that accrued even after they gave up possession prior to the foreclosure sale.
 Bankruptcy does not solve the problem. A homeowner who files Chapter 7 bankruptcy and intends to surrender property to mortgage lenders may be sued by the HOA for dues and assessment which come due after the bankruptcy filing date.
There is a group of Florida investors who are working with homeowners  to protect the homeowners from these unexpected costs involved in surrendering their property. The company will pay the homeowner cash to cover some moving expense in consideration for the homeowner transfer title to the investors when the homeowners are ready to move out of their home and abandon it to the bank. After the title transfer to the investors the homeowners have no further liability for HOA dues and assessments and they have no further exposure to lawsuits from third parties injured on the property.
This seems like it could be mutually beneficial program that protects the homeowners as well as pay some expenses incurred in moving to a new residence.

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About the Author

Jon Alper is an expert in asset protection planning for individuals and small businesses.

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