How do foreclosures on condominium developments work? The lender of the building owner is foreclosing. Is every unit affected?

Foreclosure is a serious problem in Florida, and the high rate of foreclosures on Florida condominiums has had an extremely negative effect on condominium associations, which have had to cover the missing contributions to association operating expenses represented by vacant units involved in foreclosure lawsuits.  Under Florida condominium law and foreclosure laws, if the condo association contests the foreclosure, then it can wind up holding a worthless title while the banks drag their feet in foreclosure lawsuits, because a combination of foreclosure law and Florida condominium law protects banks that are in the midst of condo unit foreclosures from having to pay the full amount of past-due association fees. However, attorneys representing condo associations are now pursuing court actions which have been called “reverse foreclosures” – instead of contesting the foreclosure, the condo association asks the court to enter judgment against it and hands over title to the bank, waiving its right to public sale.  The bank is then forced to become responsible for past-due and future fees and maintenance on the empty unit, as well as legal fees and court costs. 

If your condo association is being held hostage by bank foreclosures creating empty units, seek foreclosure help from a Florida property law attorney and ask whether this innovative use of Florida condominium law could help your association.   In some states, enterprising property law attorneys are suing banks for “wrongful foreclosure,” where property owners have requested assistance and not received it or if the bank has committed legal errors in the foreclosure process.  If you have a valid lease of a condominium that a bank has foreclosed on, your lease usually remains intact, and a bank cannot make you vacate the condominium as long as you continue to make your payments.  If a foreclosing bank is threatening a Florida condominium that you own or lease, a property law attorney experienced with Florida condominium law can advise you about your rights in foreclosure, as well as any assistance programs that might be available to you.