Owner Has “Two Property Plan” – Are There Ways To Prevent Her Strategy?

Q: We have an owner in our condominium who now owns two units. Her original unit is “under water” on the mortgage and she has told neighbors that she is going to let it go back to the bank. She inherited the new unit, which has equity. She is going to move into the new unit and pay maintenance fees on it, and we believe she will stop paying maintenance fees on the original unit when it goes into foreclosure. Can we still lien the new unit? If not, are there any ways to prevent her “strategy”?

A: We cannot fully answer your question without reviewing your condominium documents, but our guess is that your documents probably do not allow the association to place a lien on a unit that is current on maintenance fees. Certainly, the association will be able to lien the delinquent unit, in addition to imposing suspensions on the unit owner’s rights if she becomes delinquent. A better strategy in this case might be to obtain a money judgment against the owner with respect to the delinquent unit.   That judgment could become a lien against the other assets of this owner, including the new unit with equity. Depending on whether the new unit qualifies as the owner’s “homestead”, this judgment lien could result in significant pressure and force the owner to consider other alternatives such as a payment plan or short sale for the original unit.

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