Friday, March 2, 2012

Nautilus Cove Condo Foreclosures against delinquent Owners

With Owner delinquencies over $100,000 for the last 1 1/2 years, NCC is now in the process of foreclosing on 11 units, 9 of which have already had foreclosures filed on them by various banks and mortgage companies.   Due to the nature of foreclosures in Florida, it is much easier and quicker for an association to prove an Owners indebitness than it is to put through a foreclosure for non-payment of a mortgage. (ie: 3-4 months v. 2 yrs +)
Such condo foreclosure tactics to recover delinquent dues have been in use in Florida for some time, and it has become popular by lawyers for the condo associations to encourage this litigation, probably because it generates approx. $2,500 profit for the lawyer per case (11 x $2,500 = $27,500)

Whether this filing by our prior Board will result in improving our delinquency situation or opening up other problems for us remains to be seen. The first 4 of the 11 foreclosures will be sold electronically March 30th via:  2 of those condos have existing foreclosures already filed by banks, 2 do not.

Note:  In Florida a condo association foreclosure has no effect on the first mortgage.  The first mortgage holder has a lien that always survives the condo association's foreclosure.

Below are some considerations to our taking over the units via these foreclosures. In effect NCC is giving some major players, who have already filed their foreclosures, a poke in the ribs by cutting into line to get our foreclosure before they can obtain their judgment.

It seems that the Foreclosure idea is:
1) to toss out by eviction any owner or tenant in residence,
2) fix up the unit,
3) rent it out and collect the rent

The flip side of this coin seems to be:
1) How long will this unit be 'ours'? (a couple of months or a couple of years?)
2) How much 'fixing up' is required to make it rentable, (if the bank takes it from us we have in effect 'donated' any repairs, carpet, fixtures etc)
3) How much legal expense will we incur when the first mortgage holder litigates to get back their condo?
4) During the time we are in possession we:
    a) are responsible for taxes and any utilities consumed,
    b) we lose out on the $225 monthly assn. dues

You might wonder just how realistic is it for us to initially take over these units if the first mortgage holder is going to come after us to take it away?   If we  end up with some or all of these condos and have Bay County issue us with a title then we have full but temporary responsibility for the units. As I understand it we can not sell them.

I believe the new BOD will have some information for us in the near future.   Over the course of the next six months we will learn first hand whether or not this was a good idea.

Additional reading at: 'Another Option for Recovery
Against Delinquent Owners' By K. Joy Mattingly, Esq.:

and 'What Happens After the Association Acquires Title by Foreclosure?' at:

For dozens of interesting condo articles from the Sun Sentinel go to