The Recreation Centers of Sun City, Inc. (RCSC) Board of Directors will be voting on a motion at the June 30, 2016 Board meeting to establish a new corporation, Sun City Property Holdings, Inc. (SCPH), which will be wholly owned by the RCSC.
This corporation is being formulated in case RCSC should foreclose on a suitable property without a superior lien for non-payment of RCSC fees and associated legal costs so that it can place a bid on the property to protect RCSC’s interest and avoid unnecessary liability should it be awarded the property.
The RCSC Board of Directors is not interested in being in the real estate business or acquiring any Sun City AZ property. They are simply interested in upholding their fiduciary duty through due process of collecting all fees due the RCSC whenever possible. Therefore SCPH will simply place a bid to cover all RCSC fees and associated legal costs on a property being foreclosed on by the RCSC. If another bidder bids higher, which is what is expected, then all RCSC fees and associated legal costs will be paid for by the highest bidder and there will be no further action taken by SCPH. If in the unlikely event that no one out bids the SCPH, then SCPH would become the owner of the property. SCPH would then seek to sell the property to cover its costs, to include RCSC fees and associated legal costs.
The cost to the RCSC is about $2,000 for establishing and filing the legal documents to form the corporation and $1,000 to open a checking account, plus about $200 a year for operating costs. This is a very inexpensive insurance policy for the RCSC, as it protects RCSC from any liability associated with such real estate.
While historically, RCSC has rarely, if ever, foreclosed on a property in Sun City AZ, it is very important for Sun City AZ homeowners to understand that could be a result of repeatedly not paying RCSC fees. If you assume because there was no such holding company created in the past it was not needed, that would be an incorrect assumption. The number of properties that are delinquent with annual property assessments or other fees is a dynamic number that changes daily. The reasons for the delinquencies are as numerous as the number of property owners. Why a property owner is delinquent correlates, to some degree, whether a delinquent account is resolved before being referred to outside collections or before suit is filed with the courts. We have resolved delinquent accounts at each step in the collections process. When this occurs is dependent on the property owner.
As per Board Policy Resolution No. 28, RCSC files a lien on any property 60 days past due. Filing the lien is vital to protecting the RCSC and comes into play whenever someone tries to sell the property, as the lien must be paid in full to receive clear title. However, it does not provide the same benefit if the homeowner remains the owner. In these cases the only option is to pursue all legal avenues of collecting the debt, up to and including foreclosure.
###
