I just recently closed on a house I won at the flagpole, and had a surprise road maintenance charge on the settlement statement. Since I had done my due diligence prior to auction, I knew there was a lien against the property from the road maintenance association (let's call them KRL), but KLR was a named defendant in the foreclosure, and the foreclosure order the judge signed clearly stated "all named Defendants junior to Plaintiff's interest shall be terminated from right, title, and interest in the Property." So owing these past due fees didn't make any sense to me!
Initially escrow was trying to charge me for drafting a lien release and recording it. I pushed back and they agreed the lien had been wiped out due to the foreclosure and recording a release wasn't necessary. But KLR insisted the amount (accrued since 2012 with attorney fees included!) was still owed. After a bit of phone tag, I finally got the KLR attorney on the phone to discuss. Fortunately he was very kind and helpful in explaining KLR's position. He agreed that the foreclosure wiped out any liens KLR had attached to the property, but the prior owner still owed those amounts. Makes sense. So why am I being charged? He then explained that the KLR CC&Rs - which I had agreed to by purchasing the property - state that any amount owing will be an obligation of the successor owner. So... even though the property itself was no longer encumbered, the prior owner still was, and therefor I now owe it. Shoot.
Is the KLR attorney correct? Sounds valid, and the amount isn't big enough to try to take it back to the judge for further determination. And the roads desperately need work, so I've paid their demand and I'm hopeful KLR will use the big check they just received to fill some potholes. Lesson learned.
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