See https :// retipster . com / judicialnonjudicialforeclosurestateslistmap / for a map , as well as details on the specifics for each state .
3 . Beware of Land Contracts ( LCs ). An LC is an agreement in which the owner / seller of a property agrees to act as the bank and personally finance the sale for the buyer instead of going through a 3rd party , such as a bank or credit union . The buyer makes monthly payments to the owner , but does NOT receive actual title to the property until the last payment is made ; and the last one is often a “ balloon ” payment , i . e . for a very large amount ( that the buyer perhaps cannot afford to make ).
As an investor ( of a property or a note secured by a property ) who is about to step into this breach , you must give careful consideration to the LC contract that the owner has / had with the LC buyer . What you want to avoid is getting subsequently sued by the buyer after you bought out the interest of the seller .
For example , does the seller own the property outright , or is he still making payments to a lending institution ? If the owner himself did not make regular payments for any reason , the property can be foreclosed upon , leaving the buyer with a worthless contract and no home . Land contracts also leave the new owner ( you ) tied to the property . If the buyer stops making their payments , you become responsible for the land — which means , you could lose the property altogether if the buyer fails to insure it properly or pay their property taxes .
All of these tricky issues must be taken into account when you are considering an acquisition that includes a land contract . You need to have a very clear understanding of everyone ’ s rights and responsibilities beforehand . To play it safe , retain legal counsel to look everything over first .
households ( or about 53 % of the owneroccupied households in America ). Statistically , about 26 % of all Americans live in HOA communities . Typical HOA dues and fees run from $ 200 $ 300 per month many charge more , some charge a LOT more .
In most states , when a lender forecloses on a property in a HOA , and the property owner has also defaulted on their association fees , odds are the condo association won ’ t get paid for those debts . That is because a successful foreclosure action by the holder of the first position mortgage typically wipes out all junior notes and many liens . However , in about 20 states ( see the list below ), “ super lien ” laws have been passed that protect the association from being wiped out completely .
A foreclosure by a bank or credit union can take many months . During that time the HOA is not receiving the monthly payments due to them . When the bank finally forecloses and sells the property , and surplus funds are left over , the HOA ( in a Super Lien state ) can typically petition the court to channel that money to the association , assuming the association has properly recorded a lien .
So , if you are a note or property investor , be sure to check carefully if the state in which you are investing ( and where you could potentially foreclose on a property ) is a super lien state . If so , you need to take that information into account , and build those costs into your bid price for the note or property .
To reiterate , about 20 states allow for some form of super lien . Each of the states has differing laws when it comes to how an HOA lien becomes a super lien . You can learn more about super lien states and their individual laws regarding super liens by looking up your state statutes , which can usually be found online . The following states allow for super liens , or some version of priority liens for community associations : Alabama , Alaska , Colorado , Connecticut , Delaware , District of Columbia , Florida , Hawaii , Illinois , Maryland , Massachusetts , Minnesota , Nevada , New Hampshire , New Jersey , Pennsylvania , Rhode Island , Vermont , Washington , West Virginia .
4 . Watch out for Super Liens in 20 states . There are approximately 370,000 homeowner associations ( HOAs ) in the United States . Collectively , this represents more than 40 million
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