Description: Virginia Community Association Law Blog is maintained by Virginia Condo & HOA Lawyers of Gordon Rees Scully Mansukhani LLP, covering Property Management Issues.
Virginia’s premier legal blog for condominium and homeowner’s associations
Little can be more frustrating to an association than when a non-compliant homeowner files for bankruptcy. The bankruptcy laws are complex, and navigating them can be a challenge even for the most sophisticated managers. One of the broadest protections for homeowners that file bankruptcy is the “automatic stay.” This provision of the bankruptcy code immediately halts all efforts to enforce any claim against the debtor that may affect the homeowner’s property, including collection of overdue assessments and
Luckily, the Bankruptcy Code creates a method for associations to work through the rules to be able to enforce the covenants. An association can seek relief from the automatic stay by filing a motion with the Court, explaining the violation, how it is damaging the community, and why the Court should allow the association to seek judicial remedies to enforce the restrictions. The Bankruptcy Courts generally look favorably on these motions as they are not seeking to collect money owed from the homeowner but r