We had 4 units go to auction.
First the 'Good News' - One seems to have had a favorable result as far as we are concerned. This is the Smith unit #306. It sold to a 3rd party Jeffrey J. Osterhout for $14,300. We were looking to recover $11,566 so those funds will now come to us. The amount is not all coming to us, we do get our $6,580 in past due assessments, but the lawyers Hess/Applebaum get their fee of $2,250 and there are costs of $495, if the lawyer advanced them he gets that and if we paid it comes to us. So we have gotten at least the past due of $6,580 paid to the association.
Now the 'Bad News' - the other 3 units went to us on a temporary basis. We have temporary title to them but can not sell them. We are responsible for the taxes for whatever time we hold them. We are responsible for any refurbishment of them (paint, carpets etc) to get them ready to rent. We do not get the $225 association fee per month. Any money spent on the units will not come back to us when the first mortgage holder takes them from us. We may have to evict anyone currently in a unit.
Let's take just one as an example. Thomas unit 401. We were looking to recover $11,566; broken down as $8,836 in past due assessments, $2,225 in attorney fees and $505 in costs. It went to us for $200. We are now in the hole for the $2,225 in attorney fees and the $505 in costs, or -$2,730 in total for this unit. And roughly -$8,190 if you consider all 3 units.
I would have to say that things did not work out very well by our auctioning off the 3 units we ended up with.
The best result is if someone else takes temporary title, we get paid the past due assessments, lawyers fee and costs, as happened with 306. The worst result seems to be if we end up with the units ourselves. We end up eating the lawyers costs and court costs.
When the dust settles on all 11 units the Hess/Applebaum firm is going to make in profit about $24,500. It is going to come either from some 3rd party buying the condo as happened in 306 or Hess/Applebaum is going to bill us for the money and if they paid the costs initially that also.
Worst case is if we end up with 10 of the 11 units, makes for easy math, we
will pay $22,250 to Hess/Applebaum and will be out court costs of $5,000,
perhaps we prepaid this or perhaps we have to cut a check to Hess/Applebaum if
they advanced those funds.
The information cited above is available at the web site for the Bay County Clerk of Courts at: http://records2.baycoclerk.com/oncoreweb/Search.aspx
The first mortgages are still valid and eventually the banks and mortgage companies will come after us for these units. We may end up in litigation 10 times or simply make agreements to surrender them to the holders of those mortgages.
In any event we will be out additional attorney fees for each of those 10
units (assuming that we end up with all the remaining 7). Also we have no idea
how long we will be able to control those units before we have to surrender
them, perhaps we will break even if the banks/mortgage companies are slow on the
uptake.
It was a poor decision to start with and has started us down a long road of
needless litigation which in the end may not benefit us and may end up costing
us money.
What it will do without any doubt is give a very nice profit to the
Hess/Applebaum firm of at least 30K and probably another thousand each
per unit when the time comes to relinquish these condos to the
first mortgage holder.
I hope that the 'new' Board:
1) gets a decent lawyer to
replace Hess/Applebaum who I have said all along is in the hip pocket of the
Developer and Concord Management, and
2) does not proceed with any
further foreclosures on additional condos over and above those already filed
on.
Bill Harris
