Place An End To Bank Owed Debt!
As a result of increasing numbers of foreclosures, associations now have to deal with collecting delinquent balances against not only its individual homeowners but also against the foreclosing lenders/banks. With the sheer number of foreclosures that any given bank must deal with, a depressed economy and a saturated and slow moving real estate market, it is currently not uncommon for banks to retain ownership of a property following a foreclosure sale for up to a year or more. I am not aware of many associations that can carry that kind of debt for such an extended period of time.
Because associations must often expend a good sum of money pursuing collections against its individual homeowners, many are reluctant to commence collections for delinquent assessments/super liens against the bank owned properties. I have heard more than a few times that "the association will eventually get paid, so why spend the money on legal fees to collect?"
An association, first and foremost, has a fiduciary responsibility to enforce its covenants. The covenants typically require that all homeowners pay assessment fees and further set forth the rights and procedures for collecting unpaid assessments. Since banks have deeper pockets and better cash flow than all of the individual owners combined, it stands to reason that they should be pursued as aggressively, if no more so, than other delinquent owners. Having an attorney collect the debt promptly and aggressively ensures that the association meets its requisite fiduciary obligation in collecting delinquent debt against all owners. Many banks will quickly dismiss invoices or collection notices, but few are interested in prolonging litigation on a debt that they owe. A strongly worded legal demand letter or lawsuit almost always results in a prompt monetary recovery (including recovery of attorneys’ fees and costs incurred) and continued payment of assessment fees until the property is sold.
If your association is experiencing cash flow issues and/or is unable to budget for additional attorneys’ fees to pursue delinquent bank owners, you should immediately consult with your attorney to see if they can offer a cost effective manner of collecting the unpaid debt.