Legal Question in Bankruptcy in Florida

If you do not plan on keeping the condo and surrendering it in bankruptcy, then you can put the HOA fees in your bankruptcy.

This is a difficult issue. Yes, if you surrender the condo you can list the back fees in your bankruptcy as a debt to be discharged.

The problem is that until the title to the property is taken out of your name (presumably in favor of the foreclosing lender) you still can have personal liability for post-petition (i.e. after you file) ownership. The HOA liability runs with the title to the property, whether or not the title holder uses the condo at all. Your "surrendering" the condo in your Chapter 7 case does not stop this liability from continuing.

Normally the lender will end up paying the back fees when it forecloses and solves that problem, but there is an exception. The foreclosing lender is only liable, by Florida law, for up to one year of HOA dues prio to the lender obtaining title. After the lender obtains title, it is responsible for fees going forward, and you are not.

If more than a year passes between the date you file your case and the date the lender forecloses, you could remain liable for some period of HOA fees. We are finding that some lenders are very slow to foreclose, and may not have a foreclosure sale and have the title transferred for over a year. Banks appear to be slowing the process intentionally to avoid liability for HOA fees.

Your lawyer can advise you of possible strategies for handling post-petition date, but there is not an easy answer.

Robert Wilcox

(904) 281-0700