Thursday, July 12, 2012

Foreclosing HOAs Peddling 'Temporary Titles' To Rent Skimming Landlords Create Confusion, Uncertainty For Unwitting Tenants

In Sarasota, Florida, the Sarasota Herald Tribune reports:

  • Two renters in Sarasota's Park View condo complex have gotten a rude surprise over the past few weeks. They discovered their landlord -- Michael Kell of Canton, Ohio -- does not have firm title to the units he has been renting them since September.

  • Kell bought the units from the Park View Condo Association, which had foreclosed on the former owners because they had not paid their association dues. Kell apparently made the purchases knowing the bank that provided loans for the former owners would some day foreclose and take possession of the units.

  • But his tenants say Kell did not say anything to them about a pending foreclosure.
  • An attorney representing the Park View Condominium Association said it is not uncommon for condo associations, which are owed condo dues, to take title to units through foreclosure.

    Some of those associations then rent them to cover their overhead expenses and a few sell their temporary title to private investors like Kell for a few thousand dollars, and the private landlords rent them out until the the banks that are owed money foreclose on former owners.

  • "Everyone is taking a chance," said Kevin Edwards, an attorney with Becker & Poliakoff in Sarasota whose firm represents Park View. "But it usually takes a long time for the bank to complete the foreclosures."

  • The problem [...] is that Kell never notified [the tenants] that their lives could be disrupted. "If he had approached me and explained the situation, I would have nothing to complain about," [tenant Lucia] Reid said. "My goal was to stay here and buy something down the road. But I can't live here with the uncertainty."

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