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Condo | HOA Lawyers

Banks & a Deed in Lieu

An association in southeastern Wisconsin is made up of condominiums that are also rented out for the owners (condotels). In this particular case, a unit owner, who lived in Illinois, was in financial difficulty and wanted to file bankruptcy and turn their condominium over to their bank.  The bank’s attorney prepared a deed in lieu and sent it to the unit owner, which the unit owner then had recorded.  The bank became the owner and was responsible for not only the dues from that date forward, but also what was owed by the unit owner.  The bank did not want to acknowledge this.A lien on behalf of the association and proceeded with a foreclosure against the bank.  Ultimately, the association was paid more than $31,000 and recovered everything it was owed, including attorney fees and costs.

Lesson: If a bank takes ownership by a deed in lieu of foreclosure, the bank becomes liable for ALL unpaid assessments.

A collection attorney who specializes in condominium law can best pursue all the remedies allowed the association under the governing documents and state law.   If your association is having difficulty collecting unpaid assessments from a bank, our team can help.

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