If an HOA forecloses on a property and it is sold what rights, if any, does the mortgagee still have against the property?

UPDATED: Jun 2, 2011

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If an HOA forecloses on a property and it is sold what rights, if any, does the mortgagee still have against the property?

HOA foreclosed on the property and property is now coming for sale at county auction. HOA did obtain final judgment. There is still another case pending against homeowner which was brought up by their 1st mortgage holder, but they were unable to foreclose. If I buy property as a third party bidder at the auction what are my rights in respect to the ongoing case between the lender and the homeowner? Also, what happens if the case between the lender and homeowner gets dismissed? If I obtain a certificate of title does the 1st mortgage holder have a right to pursue action against the property?

Asked on June 2, 2011 under Real Estate Law, Florida


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

The homeowners association foreclosed for the homeowners fees that were due, correct? The foreclosure judgment does not generally give the HOA title to the property.  It gives the association the legal right to have the property sold by a sheriff at one of those auctions.  The sale allows payment of the debt;  it also gives the association the right to apply for a deficiency judgment against the home owner - you know: the amount left over if the money from the sale does not cover the debt. But here is the thing: the mortgage usually has the first priority in all foreclosures so I would be leery about the transaction here. Get someone to look at all the paperwork before you purchase and that includes the suit between the home owner and the lender.  Good luck.

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