Re: protecting your HOA from homeowner bankruptcy
From: Rob Sandelin (floriferousmsn.com)
Date: Thu, 27 May 2004 08:48:40 -0700 (PDT)
In the Sharingwood Legal documents, homeowner dues are a primary lien, which means they survive bankruptcy. In the event that a bank forecloses on a property, the bank, pays the existing back dues and also ongoing dues until the property is acquired by another owner. We had this actually happen and the bank paid straight away the previous owners considerable dues debt.

One thing many cohousing groups do is collect 3 months of dues as "working capital". This gives a 90 pay ahead for delinquint dues. Also charging interest or penalty on late dues is another means.

On the other hand, we have allowed owners in financial hard times to do community work and other options, including gifts and loans to help them out. The group decides.

Rob Sandelin
Sharingwood
Snohomish County, WA



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