Do we have to pay HOA dues before a deed-in-lieu can be processed?

My wife and I are in the process of pursuing a deed-in-lieu with the bank on our condo. We just found out yesterday that they won’t process a deed-in-lieu or a Short-Sale because we owe $3,000 in overdue HOA dues. Is this the law or is it something we can push on with them? We don’t have that money, so our only other option is to go ahead and let them foreclose on us. We just need to know if the bank has the right to force payment of HOA dues before they proceed with deed-in-lieu or short ale? We are not in bankruptcy or anything.

Asked on July 19, 2012 under Real Estate Law, Washington


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Under the laws of all states in this country, a deed in lieu of foreclosure must be voluntarily accepted by the lender under conditions that the lender requires. In your situation there is $3,000 in overdue HOA dues that the lender does not want to assume if its accepts the deed in lieu of foreclosure that you have written about.

This is why the lender is requiring the $3,000 HOA dues owed by you to be paid as a condition of accepting the deed in lieu of foreclosure from you.

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