Homeowners Associations Should Cooperate and Negotiate Short Sales

short sales 

SHORT SALES are tricky for sellers and buyers, and working to resolve unpaid homeowner association assessments and liens can be challenging.

A "SHORT SALE" is when an owner of a property seeks to avoid foreclosure by selling the property for less than is owed on the home loans (mortgage).  Because the lender (lienholder) would take a loss on sale of the property, a short sale requires the lender's approval. HOA lien rights

In California, if the HOA fails to lien the property for the delinquent assessments, it will receive nothing from the sale.  The HOA board can still pursue the delinquent owner in court for a money judgment.  However, that judgment might be uncollectible.

If the HOA files its lien, then it has a chance of getting paid.  However, the board can expect to be pressured to waive its delinquent assessments and release the lien on the short sale, because there would be no equity and no extra money in the short transaction to pay the HOA.

The HOA has no legal duty to release its lien in California until the association's claims have been satisfied. 

negotiations are essentialHowever, the HOA being stubborn about that could result in the short sale falling apart. 
And that could also leave a non-paying owner in possession and more delinquent assessments to accumulate, which would trigger a foreclosure sale (wiping out the HOA's lien).

It's better for the HOA to negotiate for proposed approval of a short sale.  HOA lien negotiationsThe HOA board could waive late fees, interest and collection costs, and the seller could move forward with the short sale.  

avoid foreclosureThat short sale would allow the HOA to get something out of the deal and prevent foreclosure. 
HOAs and lienholders should negotiate short sales and help owners avoid foreclosures.  


This is information about short sales and homeowner association liens in California only.  If you have a question about lien rights and responsibilities of HOA in your area, you should contact an attorney.  

For homes and real estate at Orange County, Californiaplease contact us. –  Harrison K. Long – solutions for real estate and business – REALTOR® and broker associate, Coldwell Banker Residential Brokerage – 949-854-7747 (phone) – ExploreProperties@gmail.com (email) – CA DRE 01410855 – SFR short sale and foreclosure resource certified by the National Association of REALTORs®.

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Contact us about short sales and homes and properties at Orange County, California.  

Posted via email from Explore OC Homes

About Harrison K. Long

Honored as “REALTOR® of the Year 2016” by the Orange County Associations of REALTORs®. Professional real estate representative, Realtor, GRI, Broker associate, Evergreen Realty HomeSmart, Irvine and Orange County, CA – CALBRE 01410855 – Helping property owners, estate trustees, executors, administrators, fiduciaries, bankers, investor group managers, with listing and sale of properties. California Association of Realtors (now serving on its board of directors); National Association of Realtors. Attorney member of the California State Bar Association #69137 – Contact by cell or text at 949-701-2515.

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