HOA vs. Bank

[AAbsolute]

for my friend SWGB...

They should be able to, the rental company I used to work at had an agreement with HOA/COA that any rental monies collected (after management fees) would go to anything past due for HOA/COA's managed by our company. In all honesty I think the majority of people not paying are not using Noble House, or they are so far in arrears (sp?) that they can't catch up with the occassional rental.

Barring any hurricanes you guys should be okay for assessments, I can't think of anything that would be affecting you in the near future.

I think that very, very many mortgages that are recorded for second homes in this area contain something along the form of a UCC that is an assignment of rents and takes priority over any rights to rental income that an HOA might design into their control after the fact. Have you seen one of these assignment of rents that are recorded by local mortgage companies?

 

[Matt J]

I think that very, very many mortgages that are recorded for second homes in this area contain something along the form of a UCC that is an assignment of rents and takes priority over any rights to rental income that an HOA might design into their control after the fact. Have you seen one of these assignment of rents that are recorded by local mortgage companies?

I honestly can't speak to that, and I'm not a lawyer, but in most cases that I ever dealt with the owner was current on the mortgage and was letting the dues go past due for whatever reason. Rarely was a mortgage an issue in one of those cases. HOA/COA management contracts can be in place for as little as one year, but can and do last longer. I would assume that the contract in force first would prevail in court. Keep in mind to that a rental company that is also acting as the management company has it in their best interest to pay the condo dues as they are more likely to get paid by said HOA/COA. In fact if managing one of those arrangements I would operate it in that manner as I believe most banks right now are a little too swamped to verify if a unit is on a rental program or if a unit's management fees are being paid.