Blanket Receivership for Tampa Bank Foreclosures Condominiums

by on cities

Board associations have found a way to collect overdue payments from condominiums under Tampa bank foreclosures. Many condominium associations have filed for blanket receivership which requires tenants of foreclosed units to pay their rents to third-party receivers appointed by the court.

The foreclosure crisis in Florida has taken its toll on many condominium associations. Some delinquent landlords would continue to rent out their foreclosed units without paying dues to condominium associations. The loss of income greatly affected many services provided by associations such as maintenance and repair and security.

But this time, condominium associations have found a legal tool to force landlords to remit tenants’ rent payments to them. Industry experts said that many landlords are investors who have given up hope on their units and just wait to lose them to Tampa bank foreclosures. Meanwhile, their tenants continue to use the foreclosed units and the amenities while the associations are paying for their maintenance and repair.

So far, 25 condominium associations in the state have used the blanket receivership tool to collect overdue payments. And legal experts are expecting more associations, especially those that are owed thousands of dollars, to follow suit, adding that if a good idea started to work out, there is a tendency for others to follow.

In Charleston Place Townhomes, over 50 percent of the 84 units were delinquent in their $300 monthly fee payments. The dues are used to pay for various amenities such as water, electricity, lawn maintenance and cable.

To replace the unpaid dues, associations typically increase fees on unit owners who paid regularly or foreclosed on condominium units of those who do not pay. But, because the Florida court system is swamped with foreclosure-related cases, many condominium associations prefer not to pursue repossession.

Condominium associations that chose to pursue foreclosures have to wait for at least a year or more to collect the dues owed to them.

Under the method of blanket receivership, homeowners’ associations can file for a petition to cover each unit with overdue assessments if they had already filed for foreclosures. Experts said that many lawyers are not aware of the blanket receivership tool because in an ideal housing market, people who have equity on their properties would always make it a point to pay their dues to avoid going into foreclosures.