[WSBARP] What is the best possible outcome in this situation? (HOA debt)

[Eric Nelsen]

Extra credit for sure! "Hey Rocky, watch me pull a rabbit out of my hat!" "Aw, that trick never works!"

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1417 31st Ave South
Seattle WA  98144-3909
phone 206-625-0092
fax 206-625-9040

From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Rob Wilson-Hoss
Sent: Friday, November 22, 2019 10:03 AM
To: 'WSBA Real Property Listserv'
Subject: Re: [WSBARP] What is the best possible outcome in this situation? (HOA debt)

Sorry to come late to this, but this is the evaluation I have been using on behalf of associations for years, regarding bankruptcies. Inge is very much right, but this is what I see practically. I refer to “banks” as if they are all the same, but of course they are not, this applies to the large national banks in particular, local credit unions can be much easier to work with, for example. Anyway:

·       BK cannot discharge either pre-filing or post filing debt HOA debt unless there is an exception that works for some 13s, such as, are they abandoning;
·       BK lawyers very, very often fail to tell their clients this, and I really don’t like it when the member says, I thought that was taken care of, and I have to say, didn’t your lawyer tell you?;
·       Banks can take years to move after discharge. Years. This is a national disgrace. Same is true with how long they can take after default, which is the very reason for the cases like the one Craig cites;
·       I have tried several times, and quit trying: you cannot get banks to move faster by bringing this to their attention. Even if the property, their equity,  is being destroyed by, for example, squatting meth cookers (I’m talking to you, BOA);
·       There is practically nothing the HOA can do about a lien, and about getting current payments, until the property gets a new owner;
·       This is not fair to the rest of the owners;
·       Making the BK member pay all of it is not really fair to that member, now, is it?

My clients’ decisions are made on such things as, is this a legitimate member who has had a run of really bad luck and is getting screwed; or a flipper who constantly pushed the limits of property condition violations and so on.

If I were advising the member looking at the bill from the HOA, I would talk to the HOA, emphasize the above, emphasize that, yo, there was a bankruptcy, if you sue them they don’t have any money anyway, how about taking a discounted amount, please. If I were advising the HOA and that communication came in, I would tell them to discount heavily and this is a cost of doing business – once in a while you don’t get 100% collection.

Warm and fuzzy all around. HOA gets to, rightfully, feel like they aren’t Snidely Whiplash; member feels like this is at least something that looks like a break; and member owner feels like she has done something for her client.

‘Tis the season to look for the warm and fuzzy, no? And extra credit on this reply for the Rocky and Bullwinkle reference, would be reasonable, I think.

Rob

Robert D. Wilson-Hoss
Hoss & Wilson-Hoss, LLP
236 West Birch Street
Shelton, WA 98584
360 426-2999
www.hossandwilson-hoss.com<http://www.hossandwilson-hoss.com>
rob at hctc.com<mailto:rob at hctc.com>

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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Craig Blackmon
Sent: Friday, November 22, 2019 9:09 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] What is the best possible outcome in this situation? (HOA debt)

Thank you, both. And yes, I considered this outcome and put it into the "ongoing catastrophe" category. Ah, life. Onward. If anyone derives a solution to this puzzle, please let me know. Thanks all.

Enjoy the Holiday week!

Craig
Craig Blackmon, Attorney at Law
Seattle Real Estate Lawyer<http://www.seattlepropertylawyer.com/>
92 Lenora St. (The Makers Space, a shared work environment)
Seattle WA 98121
Office/Cell: (206) 369-5949   Fax: (206) 770-7328
@LawyerBroker<https://twitter.com/LawyerBroker>
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On Thu, Nov 21, 2019 at 5:35 PM Inge Fordham <inge at fordhamlegal.com<mailto:inge at fordhamlegal.com>> wrote:
Something to be aware of if the clients opt for BK – there is often some lag time between the BK discharge and the bank foreclosing on the property and taking ownership.  The HOA can go after the clients for all dues assessed against the unit following the BK discharge for as long as they remain legal owners of the unit.  If the bank will accept a deed in lieu, the clients may be able to control the timeline (as opposed to just waiting for the bank to take ownership).  Many owners do not realize this and end up with a judgment against them (albeit for less than it would have been but for the BK) despite having filed for BK.


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Inge A. Fordham | Attorney
Fordham Law, PLLC
3218 Sixth Avenue | Tacoma, WA 98406
Office: (253) 348-2657 | Mobile: (206) 778-3131


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From: <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> on behalf of Ron Housh <ron at housh.org<mailto:ron at housh.org>>
Reply-To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Date: Thursday, November 21, 2019 at 4:24 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] What is the best possible outcome in this situation? (HOA debt)

Bankruptcy?
Sent from my iPhone

On Nov 21, 2019, at 3:44 PM, Craig Blackmon <craig at lawofficeofcraigblackmon.com<mailto:craig at lawofficeofcraigblackmon.com>> wrote:
Listmates, I have a very unfortunate case concerning a debt <$10k. In other words, it doesn't merit big legal fees (and the client doesn't have the money in the first place). So I am turning to this awesome community for some good insight on a possible path forward. Oh, and set me straight on my analysis, as needed. Thanks in advance.

Facts: Home is part of an HOA. In 2006, owner/client defaults on mortgage and HOA dues. 2009 lienholder initiates foreclosure; tenants vacate; lender changes locks to secure property. Lienholder then discontinues sale. Owners do not receive or understand the Discontinuance, and they believe they no longer own the home (as evidenced by the changed locks). They move on with their lives. Lienholder turns off utilities and eventually begins payment of property taxes.

Today, nine years later, HOA files suit. Surprise! Client still owns the place (and is thus liable for HOA dues). Home has an FMV of $285k. However, $30k is needed to get home in market/rental condition. Lienholder asserts $410k owed on lien, claiming all principal and interest due since default. In reality, though, per Cedar West Owners Assoc<https://links.casemakerlegal.com/docid/2325009?bookname=public_url>., the lienholder is owed $275k (the last six years of missed payments plus remaining principal).

HOA has no interest in taking ownership of unit and wants to be paid in full for dues owed to date (and those in the future, of course). Client obviously wants to resolve HOA debt forever -- past due and future amounts -- and finally be done with the millstone hanging from their necks.

Anyone see a happy ending here for my clients? Or really any ending, other than ongoing catastrophe? If you do, I am all ears. Thanks for taking the time to read this post!

Craig


Craig Blackmon, Attorney at Law
Seattle Real Estate Lawyer<http://www.seattlepropertylawyer.com/>
92 Lenora St. (The Makers Space, a shared work environment)
Seattle WA 98121
Office/Cell: (206) 369-5949   Fax: (206) 770-7328
@LawyerBroker<https://twitter.com/LawyerBroker>
How to Buy Without an Agent<http://www.seattlepropertylawyer.com/blog?category=Buy+without+an+Agent> | How to Sell FSBO<http://www.seattlepropertylawyer.com/blog?category=Sell+FSBO> | RE Glossary<http://www.seattlepropertylawyer.com/blog?category=Real+Estate+Glossary>
CONFIDENTIALITY NOTICE: This communication is a private, confidential electronic communication encompassed by 18 USC 2510. It is for the sole use of the intended recipient and receipt by anyone other than the intended recipient does not constitute a loss of its confidential or privileged nature.  Any review or distribution by others is strictly prohibited. If you are not the intended recipient please inform the sender and destroy all copies.
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