Should the condo association or HOA negotiate its payoff in connection with a short sale?
In most cases, no. In a pre-foreclosure sale (including short sales), the parties are liable for all amounts owed to the condo or HOA. Often, the realtor(s) and/or title company involved in the short sale approach the condo or HOA collections attorney for a reduced payoff to “make the deal happen”. Often, they tell the condo or HOA attorney that the bank will not approve payment of all condo or HOA dues or employ some other strategy to get a reduced payoff. If your association receives such a request, it should contact its legal counsel for an analysis of all factors impacting the deal including the status of any bank foreclosure. If pressure is applied correctly by your collections attorney, most if not all of the delinquent charges can be recovered.
