The Association can pursue the unit owner for the judgment. This would involve locating a bank account or some other assets/property that could be garnished or sold to satisfy the judgment.
Another option would be to have the unit listed for sheriff’s sale, with the sales proceeds being used to pay the outstanding judgment. The drawback of this approach is that any existing mortgages would remain as liens on the unit. The mortgages could deter bidders from purchasing the unit and the Association may wind up owning the unit subject to the prior mortgages. Also, many states currently have moratoriums in place on real property sheriff sales due to the COVID-19 pandemic. A third option would be to request that the court appoint the Association as a rent receiver. This would enable the Association to rent the unit with the proceeds used to pay down the judgment. The drawback of this approach is that the unit may be in poor condition and could require the expenditure of money to make it inhabitable. Also, the Association would become a landlord and must deal with all of the issues that come with being a landlord. The rent receivership would terminate when the bank forecloses on the mortgage.
A community association attorney can discuss these options with the Board
Eric J. Phillips, Esquire
Hladik, Onorato & Federman, LLP
298 Wissahickon Avenue
North Wales, PA 19454
Direct Dial: 267-662-9035
Being the holder of a judgment for unpaid assessments does not entitle the Association to rent out the unit. Unless and until the Association forecloses on its judgment and becomes the owner of the Unit, it has no right to rent out the Unit. It may only be a matter of time until the mortgage lender forecloses (and presumably gets the house at the Sheriff’s Sale, after which it will re-sell the proeprty to a new owner who will hopefully begin to pay assessments). The Association should discuss with its attorney what if anything it should do relative to the unpaid assessments, judgment, and collections.