United Condominium Owners of Michigan
34th Annual Seminar
October 18, 2008
Foreclosure, Collections and Bankruptcy:
Putting the Pieces Together.
PART I
I. Introduction
II. Statistics
III. Primary Methods of Collection
A. Personal Judgment
B. Foreclosure by Advertisement
C. Judicial Foreclosure
IV. Personal Judgment
A. Authorized under Bylaws and Michigan Condominium Act(“MCA”)
B. District Court(<$25,000)
1. Complaint
2. Personal or Substituted Service
3. Action is resolved by:
a. Payment and Dismissal
b. Consent Judgment/Settlement Agreement
c. Default Judgment
d. Defense of action/Trial
C. Advantages
1. No lien
2. Used in event of mortgage foreclosure
D. Disadvantages
1. Does not impact title to unit
2. District Courts are generally more sympathetic to Defendants
V. Foreclosure by Advertisement
A. Primary goal
B. Statutory Lien under MCA
1. Priority
C. Notice of Lien
1. Record with Register of Deeds
2. Mail First Class to last known address
3. 10 days before commencement of foreclosure
D. Title Commitment
1. Market considerations
2. Protection of Lien
E. Initiating Foreclosure
1. Publication
a. 4 consecutive weeks
2. Posting of Premises
a. 15 days within first publication
F. Sale
1. Bid
2. Auction
3. Overbid
4. Sheriff’s Deed
G. Redemption Period
1. 6 months
2. Abandonment(1 month)
a. Inspection
b. Certified/Return-Receipt mailing
c. 15 days to respond
H. Expiration of Redemption Period
1. Title to unit
a. Subject to first mortgage and tax liens
2. Eviction of co-owner
a. Complaint
b. Hearing
c. Judgment
3. Sale or lease of unit
I. Advantages
1. No court involvement unless challenged by co-owner
J. Disadvantages
1. No money judgment
2. Interest may be extinguished by first mortgage foreclosure
K. Special Considerations
1. Bank owned units
2. Deceased co-owner
3. Form of eviction
VI. Judicial Foreclosure
A. Combination action
B. Notice of Lien
C. Circuit Court
1. Complaint
2. Service
3. Judgment
D. Procedure after Judgment
1. Collection from co-owner
2. Foreclosure
a. 6 months from Complaint
b. 6 weeks publication
c. Posting of sale
d. Sale
e. Order confirming sale
VII. Collection of Judgment
A. Information for Defendant
1. Creditor’s Examination
2. Subpoena
B. Garnishment
1. Nonperiodic
2. Periodic
3. State income tax refund
C. Request and Order to Seize Property
D. Judgment Lien
E. Recommendations
1. Keep copies of checks
2. Obtain license plate numbers
3. Utilize neighboring co-owners for information
VIII. Special Situations
A. Co-owner with Tenant
1. Notice to tenant
2. Demand for Nonpayment
3. Eviction
B. Estate for Deceased Co-owner
1. Proof of Claim
Jeffrey L. Vollmer
Wegner and Associates, P.C.
23201 Jefferson Ave.
St. Clair Shores, MI 48080
(586) 773-1800; (586) 773-1805 (fax)
Website: www.wegnerlaw.com
E-Mail: j.vollmer@wegnerlaw.com