While the foreclosure process may be complex, it can be a useful tool under certain circumstances. Foreclosure may be an appropriate remedy where an Association has exhausted all other remedies, where collection efforts have been frustrated and/or past due assessments are significant. Therefore, careful consideration should be given to the facts of each case in order to determine if foreclosure is an appropriate remedy. The analysis includes a determination of the equity in the property and the priority of the Association's statutory lien in connection with any other liens, judgments, or mortgages against the property. In addition, the Association's potential ownership of the property raises a host of other considerations which must also be addressed, including: Is the Association responsible to satisfy the first mortgage lien or tax liens, if any, against the property? What is the condition of the property? Will an action in ejectment be necessary to evict the current occupant of the property? What are the Association's responsibilities in terms of any prior liens to which the property remains subject?
We recommend a careful review of all of these issues by the Association's Board and legal counsel to determine if foreclosure is an appropriate remedy.