True or False. When a community association forecloses on a unit and it is auctioned off, the association will always get the money it is owed.

True or False. When a community association forecloses on a unit and it is auctioned off, the association will always get the money it is owed.

• A. True
• B. False
• C. Sometimes true, sometimes not
• D. Cannot be determined

Answer: (B)

The total recovered from a foreclosure sale depends on how proceeds are distributed and how much the sale brings in. Funds from the sale go first to cover the costs of the foreclosure and any unpaid assessments that have priority, and then to other lienholders in order of priority. Because the sale price may be less than the total amount owed (including costs and other liens), the association is not guaranteed to receive the full amount due. Depending on local laws, some or none of the deficiency may be recoverable after the sale. So, the association will not always get what it is owed.

The total recovered from a foreclosure sale depends on how proceeds are distributed and how much the sale brings in. Funds from the sale go first to cover the costs of the foreclosure and any unpaid assessments that have priority, and then to other lienholders in order of priority. Because the sale price may be less than the total amount owed (including costs and other liens), the association is not guaranteed to receive the full amount due. Depending on local laws, some or none of the deficiency may be recoverable after the sale. So, the association will not always get what it is owed.