After several weeks off, I jumped back into Civil Beat today with an update on lawsuits alleging that dozens of condominium associations wrongfully foreclosed on owners who fell behind in paying maintenance fees in the years prior to 2012.
These suits have gone from being a nuisance to posing a serious threat to the associations and to the law firms that aggressively used their willingness to pursue nonjudicial foreclosures using a process that provided few protections for the delinquent condo owners.
The cases involve foreclosures prior to 2012 because the legislature totally rewrote the foreclosure law in that year. The major legal issues arose prior to those 2012 amendments.
The lead attorney challenging the use of these foreclosure practices by condominium associations believes the number of projects involved in the litigation will continue to grow.
But an initial list of condominiums included in a suit seeking class action certification can be found here. There are over 70 projects named to date.
All this spells serious trouble for the two law firms that pursued the bulk of the nonjudicial foreclosures on behalf of condominium association clients, as well as for the association themselves. As I found in working on the column, the eventual damages could be staggering.
One key point. As a long time member of a condominium association board of directors, I’ve taken sat through a number of educational programs. The standard advice to directors is to hire good lawyers and professional consultants, and follow their advice. This is supposed to keep you out of trouble.
But in an unusual case like this, where a small group of lawyers gave clients advice which now appears to have been wrong, it leads to trouble. Condo boards are almost certainly going to have to respond by filing their own claims against their lawyers. You can imagine how ugly this is going to get before it’s over.