HOA Lawyer In Risky Business

Article Courtesy of The Tampa Tribune

By Michael Sasso

Published June 18, 2008

Bob Tankel wants you to know that he's not Snidely Whiplash.

As an attorney for more than 500 homeowners associations, Tankel is foreclosing on people's homes for unpaid association dues with surprising frequency. Although some are investors, others live in the homes and lose them because of a few hundred dollars in back dues, he says.

That makes Tankel an unsympathetic figure. He jokingly says people sometimes compare him to Snidely Whiplash, the top-hatted villain with the handlebar mustache in the old Dudley Do-Right cartoons.

But Tankel insists he's not a bad guy and doesn't want to take people's homes away from them.

Instead, he is looking out for the interests of homeowners and condo associations, which also are victims of Florida's housing mess, he says. The huge spike in mortgage foreclosures has left many deed-restricted neighborhoods dotted with vacant homes. Homeowners who remain often put off paying their association dues to save money.

Those residents who faithfully pay their association dues are forced to pay extra to make up for people who don't. That's unfair to them, says Tankel, who has practiced community association law in Dunedin for 26 years.

Here's a look at the rise in homeowners association foreclosures through the eyes of one of the lawyers on the front lines.

Do you get a lot of angry calls from homeowners?

We do get a number of angry calls. I don't recall that we've been threatened with physical harm, because our goal is to defuse the situation. People who come in my office who are angry, if my staff can't deal with them, I'll ask them to step into the conference room, discuss it with them and just lay it

out for them. My clients the HOAs are geared

Bob Tankel stands in the line of fire for irate homeowners.

toward resolving these things. Clients have no interest in owning someone's home or kicking someone out.

The last thing I want is a physical confrontation for anybody. Some angry people might go home and take it out on their president. I have had association presidents that have had slashed tires and threats and so forth.

Are people surprised that their homeowners association can foreclose upon them?

People who buy into these communities don't read the fine print, and the fine print says that if they don't pay the association it has the right to sue them personally for the amounts that they owe. And it has a lien, or claim, against the property. They can actually sell the property to satisfy the debt, no different than a mortgage.

How often are you taking a delinquent homeowner's home to foreclosure sale, and how much has that changed?

What I can say is that three years ago I had one person working on foreclosures, which is I what I call the start of the legal process, and one person working on all the efforts prior to the start of litigation.

Now I have two paralegals just for homeowners association collections, one paralegal for condo collections, one paralegal just for defense of mortgage foreclosures, one paralegal overseeing the process, and probably another floater who works as needed and follows through with the foreclosures. So if you go by staff, it's five times the staff.

In my experience, we would sell a home on the courthouse steps once every couple years. Now we're taking six to 10, maybe six to 12 a year, maybe as many as one a month to foreclosure sale. Because there's a lot of them that are working their way through the system, it takes at least six or eight months after you start before you can get to the courthouse steps.

You advise your association clients to seek foreclosure against delinquent homeowners. Why don't you just file a lawsuit for a money judgment? Isn't that more humane than taking someone's home?

Florida has a lot of protections for debtors. When you have a judgment against someone you still have to execute the judgment, which means you have to find assets that you can sell to satisfy the judgment. Frankly, I don't seek judgments against people because a judgment is just that - a piece of paper.

When you've got a situation where a person doesn't pay, the association can either foreclose and sell the home on the courthouse steps or get a judgment. When you seek foreclosure, you know that the home is not going to move to Alabama. The home is not going to go bankrupt. You know that the home is not going anywhere. We just go after the home.

If you seek a judgment against someone and they go bankrupt, the judgment may disappear. The most powerful tool that an association has is foreclosure.

If a home doesn't sell at a foreclosure sale, the homeowners association sometimes buys it. What do they do with it in a depressed real estate market?

In this market, the value of the home is almost universally less than the mortgage. In the situation where the association takes back title, that's a perfect opportunity for someone in the association to step forward and become a real estate investor. Buy the judgment from the association and seek a short sale of the mortgage from the mortgage company.

When the association finds itself as the unfortunate owner, I recommend they either try to rent it on Craigslist, or in the alternative, actually deeding it back to the bank immediately. In other words, take the position that the bank now owns it and has to pay the back assessments to the extent allowed by the law, and the law is changing.

Don't attorney's fees in foreclosure cases often exceed the amount of past-due homeowners assessments?

Attorney's fees routinely exceed the amount that is in question. And judges, I think, have a hard time with that - when I end up in the judge's chambers and we're at the summary judgment and I have my affidavit of costs and fees that can run in a routine case $1,500 or $1,800, maybe $2,000, and the amount due is only $400 or $500.

The critics of the association lawyers who say you're taking people's homes away and you're profiting out of whack to the amount due don't understand the process. It's hard work, it involves analysis of title. It's fundamentally the same work as if it was a $10 million mortgage.

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