Association must lien and foreclose to get unpaid fees

Question: I have three condominiums in different locations. One is paid for, which is my residence, and the other two are rentals that are upside down with the current real estate market. I stopped paying the mortgages and HOA dues on the rentals two months ago. The condominium has filed a lien on one of my units. I owe the bank $445,000 and the property value is down to around $350,000. Can a condominium association foreclose on a property that is upside down? Why would they? What can I tell my renters who are scared of being evicted? — G.M., Miami Beach

Answer: Yes, the association can foreclose on your property and I highly recommend that they take fast action. Condominiums must lien and foreclose to make the unit start paying the fees. This action enables the association to take title to the unit and start recovering losses and start paying fees. Once they have title they have several options, including renting the unit. They can collect the rent to recover their loss. They can sell the property even if it has a mortgage. Keep in mind that most association foreclosures will eliminate the second mortgage. They can ask the bank to agree to a short sale. One other way the association can cut their loss short is to deed the property to the bank if the bank will agree.