Q: Our condominium building has a unit where the owner died several years ago. No one has appeared to pay the real estate taxes or the homeowner association fees since the owner died. The association has a lien on the unit for the unpaid assessments.
Is this a situation where I could foreclose on the lien to obtain title to the property? If so, what type of lawyer would handle this case? Thank you.
A: When you ask whether you can foreclose on the lien on the condominium, the quick answer would be no. You can’t foreclose if you aren’t the lender and if the property hasn’t been pledged as collateral for the loan.
However, if your question is whether the condominium association has the right to foreclose on the lien it has on the unit, the answer is yes.
Each unit owner in a condominium association has an obligation to not only pay the billed assessments but also any real estate taxes billed on the unit. The local municipality will have a lien on the condominium for the unpaid real estate taxes, and the association will have a lien on the condominium for the unpaid condominium dues.
The condominium association can proceed to foreclose on the condominium for the unpaid assessments. The association may have to hire an attorney that concentrates their practice on residential foreclosures. The attorney would file suit against the deceased homeowner and proceed through the legal process to either force the sale or take possession of the condominium unit.
Your association will compete with the local municipality on the foreclosure, as local real estate taxes likely are a higher priority than the repayment of the condominium assessments. If there is a mortgage on the property, the association may also have to compete with any mortgage lender that holds a mortgage lien on the condominium.
It would be wise for the association to move quickly against the delinquent assessments or risk losing out to other competing interests in the condominium. If your association works with a good foreclosure attorney, your association may have the ability to clean out the apartment and rent it out until the foreclosure goes through, whether the association, the local tax authority’s tax sale, or the lender’s foreclosure prevails.
One last item: You, as an individual, could try to buy the home at any tax sale for unpaid real estate taxes. If you are able to buy the property in the tax sale, you may have to wait a year or two (or whatever time period required under the law in your state), but at that time you might wind up with the deed to the property. But this process takes time.
While you sense an opportunity, you simply can’t stand in the shoes of the association; nor can you stand in the shoes of the lender to foreclose on the unit.
(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through their website, bestmoneymoves.com.)