hoa? deck is stacked against you
Now, homeowners associations are foreclosing on your home for the smallest reasons.
By 2005, the family of five had fallen behind on dues to the homeowners association of The Glen at River Ridge, which represents about 150 homes in a west Pasco County subdivision. The result: In September, the homeowners association foreclosed on the house for owing $580.
HOAs were thought up by people who just got tired of letting everyone be unique. Houses look the same, no cars in the drive, keep your grass green, no signs in the yard, no painting your house, etc. Oh, and whatever arbitrary rules the association dreams up.
And you get to pay them too. There may be a community pool, security, landscape and maintenance, and cheaper (or more expensive) cable.
Just remember that when you move into an area with an HOA, they dictate nearly everything - you have already given up your property rights. Fall behind on a small bill, and now they will be taking your home, too.
No tag for this post.
Loading ...
June 3rd, 2008 at 8:35 am
“smallest reasons”? I’d say that not paying for dues for three years and making your neighbors cover your payments sounds like a big enough reason to me.
If you can’t afford a couple hundred a year for your fees, don’t sign a binding contract to pay those fees in the first place.
I couldn’t find in the article where they were coerced into buying a house in a HOA. Can you point that out for us? Thanks.
June 3rd, 2008 at 10:09 am
I am not a big fan of HOAs, but sometimes I think they act before they think.
Yes, there comes a time when foreclosing on a house or condo for HOA fees is necessary, but for $580? That’s wrong.
There are a number of options HOAs have, the biggest placing liens on a property.
What good is foreclosing going to do? You’re not going to be able to sell the unit, so the HOA becomes the owner. They still won’t receive any fees from it, so not only did they bump someone out for a reason that is not even 0.5 percent of the home’s value, but didn’t solve their revenue problem.
File a lien. There’s a chance someone who can’t afford HOA probably can’t afford the mortgage payments, which means it’s going to be sooner rather than later that the bank will foreclose. With a lien on the property, you suddenly have what is owed to the HOA a priority that has to be cleared by the bank before they can sell the property. If the bank has to hold on to the property, not only will it clear the lien, but it also will have to pay current amounts, which means the HOA in the end gets the revenue stream it’s looking for.
June 3rd, 2008 at 11:11 am
Foreclosing gets the asset into the hands of someone who is willing and able to pay the HOA fees, so that the remaining members did not have to pay additional amounts on their behalf.
If you can’t find money for your HOA fees, you probably should be renting, not buying. As for the owners “losing” their home, if they had equity in it, they could have extracted it to pay their bills. If they had no equity, they were really just renters anyway.
June 3rd, 2008 at 2:59 pm
Tino … not sure if you noticed … but NO ONE IS REALLY BUYING RIGHT NOW.
I own a condo unit, and I can tell you there isn’t much equity in it, not enough for me to go to a bank and ask for a loan against the equity even though I bought my condo when the market had already fallen (it’s like buying stock … buy when it’s down, not up).
IF there were a line of people to take over that unit, great! But the HOA forecloses and suddenly becomes owner of the unit … it could be MONTHS before that unit sells again. Then what was the point? You can’t lien against yourself for the unpaid amounts, you have to take that as a loss and a bad debt. Sure, the amounts of fees BEFORE the foreclosure are still a lien, but who is going to pay that? You have to clear liens before you sell a property, so are you really thinking they can add the amount they had to pay to satisfy the liens (or the amount they ate for not getting that revenue) to the overall listing price and still sell it?
lol!
No.
While a lien is not a first priority, it HAS to be cleared before it can be sold. Let the bank deal with whether or not someone should be a renter. The SMART move is to let the bank foreclose, make them not only make up for back payments, but keep HOA fees current, and then you maintain your revenue stream with just a minor headache.
I don’t know what that’s so difficult to understand.
June 3rd, 2008 at 5:54 pm
Maybe they could afford the fee at one time but a lot of people are struggling recently. A lien does sound like a better way to go for all parties.
June 3rd, 2008 at 6:19 pm
Tommy … absolutely! I don’t think everyone who bought condos or homes in an HOA should’ve simply been renters. It’s a very elitist attitude for someone to suggest that.
Many bought with subprime ARMs that had an affordable rate when they bought, but suddenly skyrocketed in the second or third year. Were these people mistaken in not fully understanding the subprime market? Yes. But banks didn’t do a lot to explain it, or do their due diligence to make sure someone could afford a ballooned interest rate.
Plus, there are some communities where HOA fees have risen substantially, or there are a number of assessments that people didn’t plan for. I know of one condo community where people had to pay an additional assessment of more than $5,000 each.
That’s a lot of money.
June 3rd, 2008 at 8:02 pm
It seems that $580 seems like too little to foreclose on a house. While I understand that the people that purchased it should’ve known what they were getting into, I think that there are a lot of people struggling just to get by these days.
I’ve got a condo in Philadelphia that has been on and off the market for nearly 2 years with little to no activity. I’m lucky to be able to scrape by and pay for my mortgage there and here in Tampa, but it comes at a cost.
I have to carefully monitor how I schedule meetings because it costs me between $70 and $80 to fill up my vehicle. I have no discretionary income to speak of.
When I look at what my HOA provides in my neighborhood here in Tampa, I wonder whether it’s worth the fees sometimes. It seems a little extreme.
June 3rd, 2008 at 8:26 pm
Whats the difference in a gated community then “us individuels” who live in Tampa in a ‘regular area’? . You can’t water but on a certain day, so your yard dies, you can’t cut a tree without a permit,so if a hurricain comes and the tree falls on your house, you pay. heaven help us if it’s a Grand Oak! You can’t have a fence except a certain hight for fear you block a neighbors view,be darned about safety. and on and on and on… along with all the excesive spending by our City that has made our Taxes go out of sight, whats the difference of a HOA fee and rules? Why anyone wants to live here is beyond me.
June 4th, 2008 at 8:14 am
Booyah - while in this case the bank will probably step in and lead the foreclosure, the HOA must force the issue because the HOA can only capture 6 months of fees (or 1% of the value, whichever is less) in a foreclosure proceeding (Statute 718.116). Everything over that amount must be paid for the rest of the responsible owners.
I understand about special assessments - I had to pay a $10,000 assessment a couple of years ago for a major repair to our community. However, had a group of owners not been willing/able to pay their share, it would have been even more.
I understand villifying HOAs when they come up with stupid rules, but there is no defense against not paying very nominal fees. It’s not an elitist attitude — they knew that if they didn’t pay these fees, they would lose their house. They even signed documents to that effect.
June 4th, 2008 at 8:30 am
Tino … I agree, people NEED to pay their fees, and if they think they’re excessive, then they need to run for their HOA board, or attend meetings.
I just think it’s better, personally, to wait it out as an HOA and let the bank foreclose. Even if you only get six months out of it. That one fee can’t be making or breaking the budget.
June 4th, 2008 at 10:55 am
The 580.00 probably included legal fees that were over 2,000.00 per year by the mangament comapny’s attorney. This is were homeowners have no chance of paying the small fee because of the highway rape of these attorneys that charge outragous fees that need to be paid. If they were three years back the bill was probably over $5,000.00.
June 4th, 2008 at 1:40 pm
Examine closely the story of the $580 foreclosure. You’ll find that it’s just another homeowner walking away from a home where they have zero equity.
The HOA “foreclosure” was just a headline and nowhere near the truth about HOA’s in general. Those people were going to lose their home to the bank. The HOA’s mistake was in spending money to retrieve dues that were noncollectable to begin with. The only thing they achieved was to preserve their right to collect dues.
HOA’s are formed to ensure that the slobs and screwballs in your neighborhoods keep their self-expression behind their walls and not on public display where it can devalue the property of their neighbors.
Without them, neighbors could park motor homes, boats, etc. on lawns and driveways or just let the grass grow to look like the Serengeti Plain.
You know it going in so don’t complain when rules are enforced. Don’t buy if you don’t agree to the rules.
June 4th, 2008 at 3:57 pm
I daresay the great majority of people who move into an HOA or Condo association simply have NO IDEA of what they’re getting into. And the minute something goes wrong - such as not being allowed to put up a decoration that isn’t allowed - they are outraged and reach for a lawyer. They are like children. We need more adults and fewer children in our HOA’s
July 8th, 2008 at 11:04 pm
I can understand the condo association charge monthly fee, and do special assesment to fix up what needs to be fixed, but can they do a special assesment due to too many forclosures and leans in the complex? I have been paying my fees for 6 years (including special assesment to repair common grounds)with no problem. Now my condo association is charging special assesment fee for monthly fees not received from other units. And what makes this even more skeptical is the letter indicated tere are 22 units in forclosure/short sale, but when I had a realtor look up my complex, she only found 4 forclosures/short sales out of 17 total listings. Can they charge special assesment to pick up “slacker’s” share? What happens if you don’t pay?