Associations can foreclose upon the deceased owner of a unit. However, it is possible, in limited circumstances, for the foreclosure sale to be undone by a probate court during a dependent administration.
1) No Probate
A nonjudicial foreclosure sale will not affect the validity of the sale if no probate proceeding is opened within four years of the owner’s death.
2) Dependent Administration
If a dependent administration is opened within four years after an owner’s death, a foreclosure sale conducted after the owner’s death is voided by the probate court, and the estate is administered as if the sale did not take place.
3) Independent Administration
If an independent administration is opened within four years after an owner’s death, a foreclosure sale conducted after the owner’s death will not be voided.
When we have an owner who has passed away, we generally pursue foreclosure and attempt to notify the estate and heirs of the owner. Oftentimes, the foreclosure process will cause heirs to come out of the woodwork and make their intentions known. If they intend to probate the estate, they often pay off the debt and we pull the foreclosure sale. If they do not intend to probate, we know that we will be safe and proceed forward.