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Condo, Strata and HOA News

The Use of Foreclosure to Collect Fees Needs To Change

We’ve recently seen the law firm that billed about $3000 so the HOA could collect $4.70, and the lawyer who billed $150,000 for a collection on about $24,000. Add to this the newest – an HOA suing for foreclosure on $2400 (including legal and filing fees) for an original amount outstanding of $120 bill.

HOAs and Condominium corporations get told by the little devil angel on their shoulder that courts award costs to the victor of a ruling. With that in mind, these organizations move a lot of their collections to lawyers with instructions to use the heavy-handed ability to start foreclosure (instead of civil suit) on outstanding amounts. These outstanding amounts, as indicated, can be as small as $4.70.

For Asher Essebag and his original $120 amount of missed contribution to the Boca Del Mar Improvement Association, the filing fee alone was about $360.

The ability to foreclose on miniscule amounts, and the costs involved – which outstrip the original amount by magnitudes indicates there is something wrong with this process.

Maybe there needs to be a rule that you cannot foreclose on a unit unless the amount outstanding (before costs) is 5% or more of the unit’s value. Even 2% would likely be acceptable. Just that we require something to strive off this criminal waste of court time, lawyer time, and aggravation cause by HOAs and condominiums using foreclosure to collect on insufferably small amounts.

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