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ZOMBIE FORECLOSURES...from page 16.
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doned residential properties in uncontested
actions.” Although no one can guaranty
passage of any particular bill, the volunteers
of the Legislative Action Committee
of the Community Associations Institute
are working with our governmental affairs
group, MBI GluckShaw. We are proud
that we have been able to gather substantial
support in the legislature for this bill with
a number of prominent legislative sponsors
and co-sponsors.
In summary, the proposed bill provides
“self-defense,” so to speak, to common interest
ownership associations by empowering
associations to advance a foreclose on
a realistic expedited basis and/or to ask a
Court to appoint a receiver for the vacant
and abandoned unit. In common parlance, if
the lender’s “Zombie Foreclosure” continues
on its aimless, wandering journey with no
end in sight, these bills allow associations to
use “self-defense” to either force the lender
complete its foreclosure by a date certain or
allow it to obtain a court-appointed receiver
over the unit. The receiver then has the
power to rent the unit. Monthly rent can, at
times, well exceed the monthly maintenance
fee. Thus, with a receiver and rental income,
it is possible to keep the unit current on
the maintenance fees and is possible to pay
down the past due debt of the abandoning
unit owner.
Of course, there are other current remedies
available including enforcement of a
judgment against a delinquent unit owner.
Nevertheless, we believe the legislation, and
procedure as outlined above, will help provide
common interest ownership associations
with a powerful tool. With this legislation,
the lender is strongly incentivized to
conclude its “Zombie Foreclosure” while,
at the same time, common interest ownership
associations are given the ability to
use “self-defense” against these “Zombie
Foreclosures.”
This is a substantial, and, at times, a rather
lengthy process. Of course, the Legislative
Action Committee of the Community
Associations Institute in concert with our
governmental affairs group has to assess and
account for others who may have substantial
opposing interests against anything that
helps common interest ownership associations
address and correct the problem. After
all, common interest ownership associations
did not create the “Mortgage Meltdown” or
set “Zombie Foreclosures” on their path of
destruction. Nevertheless, common interest
18 • Community Trends ® October 2015