Our Clients Ask Us: Fee Responsibility At Sheriff's Sale

Q: What happens when a unit owner is delinquent and the property sells at sheriff’s sale? Is the buyer responsible for the past due maintenance fees from the previous owner?

A: IT DEPENDS. Almost all Associations have governing documents that include a "Non-liability of purchaser at sheriff's sale/foreclosure sale” clause regarding maintenance fees. This provision makes it so that the purchaser is not liable for any fees due from the previous owner.

A foreclosure is otherwise known as a "marshaling of liens," meaning that when the foreclosure is filed, all parties with interests in the property are named as Defendants and given the opportunity to assert a claim in the foreclosure. Near the end of the fore-closure process, the Court will issue a Decree that makes findings of mone-tary amounts for the Defendants, and will also state that all liens will be cleared off the property upon the con-firmation of the sale. Essentially, this means that liens filed prior to the sheriff’s sale do not have to be satisfied prior to title transfer. The buyer will be responsible for main-tenance fees from the sheriff’s sale date forward, regardless of the time of recording of the deed. If the new owner does not pay within the requisite time, we can start the regular collection process once the title to the property has officially been transferred to the new owner. It is important to check your recorded documents for this type of provision to determine that the Association has one and must comply with its purview.

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