An Association forecloses on a vacant lot in the neighborhood and takes title after foreclosure. The scenario is not uncommon; especially in neighborhoods that are developing, expansive, affluent, or newly built. But if the Association holds record title to a vacant lot, must the Association still pay assessment dues on said vacant lot? The answer most likely is yes.
It must first be determined whether the vacant lot is governed by the Association’s Declaration of Covenants. If the Association’s Declaration of Covenants incorporates the lot and states that current record title holders must pay assessments, then the current record title owner of the vacant lot must pay the assessment dues. This includes the Association if they are the record title owner. This is (in part) because an Association cannot excuse a specific lot owner from paying assessments unless the Association’s Declaration of Covenants expressly provides otherwise. Doing so avails the Association to the possibility of being assailed by claims of discrimination, breach of fiduciary duty, and selective enforcement from other homeowners.
So does the Association cut a check to itself to pay for the vacant lot’s assessments? No. For every vacant lot that the Association owns, the Association would assess the other lot owners for their proportional share of the Association’s vacant lot assessment obligation. So feel free to foreclose on that vacant lot Associations! You’re paying for them one way or another.