Who’s Responsible to Pay Past Dues?
Who does the HOA (Home Owner’s Association) of a subdivision try to collect the outstanding past dues from when the owner forecloses on their home? Unfortunately, some are trying to collect from the new home owner. I have had buyers come to me with this situation so I suspect there are more consumers facing this issue.
It usually comes in the form of a letter to the new homeowner stating that now that they are the new owner of the home, they are the new owner of the past due HOA fees as well. This is not true. Do not pay off an HOA delinquency that doesn’t belong to you.
The HOA should not be contacting the new home owner regarding old dues. In fact, during the escrow period of the transaction to purchase the home, the title company requires the HOA to provide an updated statement of all dues which are to be disclosed on the settlement statement prior to closing on the purchase of the home. Any dues, costs or fees which arise after the new buyer takes possession of the property, is the responsibility of the previous owner or the HOA for not providing an accurate statement.
A.R.S. 33-1807 (B). At a foreclosure sale, all liens subordinate to the mortgage, including delinquent HOA fees, are generally extinguished. The lender nor the new buyer of the home are responsible for delinquent HOA fees. The delinquent HOA fees follow the owner, not the property nor it’s new owner(s). The HOA’s only recourse is to pursue the previous owner to collect their past due fees.