Condo board has two options on delinquent fees

There are professional auction companies in the District that will assist you. Generally, the association will have to pay a minimum of $2,000 to cover the auctioneer's fees and the advertising required before the foreclosure takes place.

From my experience, many foreclosures are terminated because the unit owner suddenly discovers that he has money to pay off the delinquency. Most unit owners do not want to lose their home, and when faced with this reality will somehow come up with enough cash to satisfy the association.

If the foreclosure actually takes place, one of two things will happen. A third party -- often an investor -- may consider this a good deal and be the successful bidder. If that happens, the investor would have to pay off the existing mortgage (or negotiate a deal with the bank). You would not get the back condo fees paid, but the new owner would be required to start paying future fees as soon as he takes title to the unit.

But if no one buys, the association would end up owning the unit. Here's a little secret that is often misunderstood: The association did not sign any legal documents with the lender -- such as a deed of trust or a promissory note -- and, thus, has no legal obligation to the lender. The concept is to force the lender to foreclose on the unit because the mortgage still exists and remains a cloud on the title. While the association cannot refinance without paying off the mortgage, it certainly can sell it to a third party -- which would have to pay off the loan. And the association could use the unit for its own purposes -- such as for association business -- or rent the unit out.

In today's market, lenders are often reluctant to foreclose on condominium units. That is especially the case in the District, where the lender is obligated to pay the association up to six months of back condominium fees. This is known as a "super-lien," which exists in about a dozen states. . Maryland and Virginia do not have such liens.

What if the value of the unit is less than the amount owed on the mortgage? That's the lender's problem because the condo has no legal relationship with the mortgage holder.

There is often a game being played between the lender and the association: Who will foreclose first? My suggestion is designed to end this game and put the burden back on the lender.

There are always risks involved, and before you pursue any collection actions, make sure you are getting good legal advice.

Benny L. Kass is a Washington lawyer. For a free copy of the booklet "A Guide to Settlement on Your New Home," send a self-addressed, stamped envelope to Benny L. Kass, 1050 17th St. NW, Suite 1100, Washington, D.C. 20036. This column is not legal advice and should not be acted upon without obtaining your own legal counsel.