Homeowners Association Will Foreclose On Your House If You Don't Pay $267.58
Be careful what you sign when you buy that new home — because you might be agreeing to allow the home owners association foreclose on and auction off your house if you don't pay your dues.
That's what's going on in San Antonio, TX, where a HOA is having a showdown with the homeowners.
In a rare move, a South Side homeowners association has filed to foreclose on 84 homes in the Mission Creek community because of unpaid association dues.That's 21 percent of the roughly 400 homes in the community, based on data from RexReport.com. The 84 are set to go on the auction block April 7 at the Bexar County Courthouse - an event that would devastate the neighborhood's property values, experts say.
Judith Gray, an attorney hired as the auction trustee, said the association is foreclosing because many homeowners have not paid dues for several years, and the multiyear loss of those dues is making it difficult for the association to function and to provide services required by the city.
"We've got a lot of stubborn people who believe they do not have to pay homeowners dues," Gray said. "They have on average not paid homeowners dues for two to three years."
The homeowners who are refusing to pay say that the association isn't delivering on a promised park — and is using the money only to maintain the "front area where they sell those homes."
Some homeowners say that the non-payment was due to a misunderstanding, and were surprised to learn that their house was going to be auctioned off...
Adam Chavarria says his unpaid dues were the result of poor communication from the association as to his payment due date.Chavarria, who bought his home in July 2004, said the association had sent a bill and coupon book in previous years to help in payments, but not last year.
"I didn't have a problem paying," he said.
Chavarria says his next personalized written communication from the association was a "formal notice" of default telling him to pay $267.58, including $100 in legal fees, or have his home auctioned off between 1 p.m. and 4 p.m. April 7.
"That was kind of a shock. For a couple hundred dollars, I thought that was a bit much," Chavarria said.
He paid the fees.
HOA moves to foreclose on 84 homes [My SanAntonio via Fark]
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Comments:
the HOA in my neighborhood is on the verge of bankruptcy.
Stories like this are quite common which is why the people in our neighborhood will NEVER agree to a mandatory HOA.
The mandatory HOA is currently being proposed due to the financial situation, it's been voted down several times in the past few years.
What's the point of an Home Owners Association? I've never understood why it exists. Do areas that have an HOA have an advantage to areas that don't?
I heard about this years ago on shows like Dateline NBC. IIRC, in the one I saw, someone had a flag out that the board didn't like, so they fined the tenant. When they refused to pay, they auctioned off the home to pay the ticket.
It seems a bit excessive to have that kind of language in an HOA contract.
But on the same hand, I can sympathize with the HOA. My dad is on the board of his HOA and there are SO many people who are behind in their fee payments (some a couple hundred and some a couple thousand behind) and many of these people think it's simply not important or a priority.
He's so frustrated with it because he's not trying to do EXTRA stuff with it - he's trying to do BASIC stuff: getting the trash taken care of, general landscaping of the entire property, fixing an erosion problem behind a row of townhomes, and making sure the streets get salted and shoveled when snowstorms occur. It stresses him out.
This is exactly why I will never live in a subdivision, condo, etc. where a bunch of blue-hairs with nothing better to do can rule over every "significant" (to them at least) detail.
I did some computer work for a co-worker who lives in one of these condo subdivisions. Each condo had to have a yellow ribbon on their matching lamp posts exactly 48" off of the ground. If it wasn't there, was too low, looked ratty or dirty, or was lopsided, the HOA would fine the residents $75 a day.
For a missing ribbon.
I have too many responsibilities as-is! I don't feel the need to be punished for not having a yellow ribbon 48" off of the ground!
And one of those people behind in their payments? An alderwoman.
@dragonfire81: Well, it's more like a car dealership auctioning off your car for not paying for an oil change at the dealership, but yeah,st ill freaky/scary!
@dragonfire81: It's an HOA. The homeowners entered into this contract willingly. When 20% aren't paying, and the forclosure on all of those properties would devastate home prices for everyone, it's time to consider disbanding the HOA.
That's really weird, I thought it was typical for the hoa to put a lien against the property.
The HOA where I live is cheap and pretty effective. Of course it was made 30 years ago and exists for two reasons. To take care of 3 common parks and to ensure the streets are plowed. And the street plowing is actually an optional fee. (18 whole dollars for the year, in Michigan).
They don't foreclose (they use liens) and they don't enforce township regulations.
Reason why we specifically shopped for a home with no HOA fees.
@ hypochondriac - I can only speak for the HOA which I'm familiar with, but they are there to make sure your overall subdivision/area/property is well maintained and presents well. It helps with certain things that everybody has done. The things my dad's HOA (single-family homes and townhomes are in the subdivision) is responsible for paying fo:
Maintaining landscaping of common greenery
Making sure streets are cleared/salted during inclimate weather
Trash removal
Repairs on property that is not individually-owned (an erosion problem behind some townhomes and when a hit & run driver took out a lamp post with his car, for example)
Having the streets power washed every couple of weeks
Curb/sidewalk care
Care for the community fountain and lighting
Another great reason not to go into a condo, TIC or other housing with an HOA. Typically they're badly run and always go bankrupt for one silly reason or another.
If people are outright refusing to pay an HOA outright, then they deserve what's coming.
Wome of them are years behind in paying? ...and they are just getting around to collecting the dues now? what took them so long?
Do the homeowners have any recourse to stop this suicidal action? I know they entered into a contract but in the same way we elected our officials, if Obama started carpet-nuking everything east of Germany I think we'd be pretty justified with demanding his impeachment.
It just baffles me that because the front yards don't look that nice they're willing to basically commit home value suicide. This would drop home values 20% easy and then what? You have people who are in mortgages that are much higher than what they owe and they just walk away, further adding to the mess. All because a few totally disconnected assholes want to use a hand grenade in a fight.
My HOA just instituted for 2009 a new policy that will place a lien on a home in which dues go uncollected after three attempts to get paid. A homeowner would receive the initial bill, then if unpaid a secondary certified letter, and then a third certified letter. If unpaid the matter is placed in the hands of an attorney who will initiate the lien. Having a lien on the home will not allow the homeowner to sell or get any other type of loan in the future until the lien is cleared.
In my opinion a HOA is a pain and needless but the town I live in mandates a HOA be established due to zoning and other laws.
HOAs are evil. We've been in our house for 5 years. The HOA basically said to us that we didn't have to pay the fees because we don't have kids to use the park or pool, (we're gay), you don't have kids to participate in the Halloween party or the 4th of July parade (you're gay), and you don't have kids who use the school bus shelters (you're gay).
Then this year they hit us with three years worth of dues at $750 a year. We took them to court, and the court said nope, they don't have to pay and it isn't because they're gay, it is because you didn't want them to be in the HOA because they're gay.
@hypochondriac:
You'll find a HOA typically in an enclosed community/neighborhood. And almost always in a condominium complex.
The HOA usually takes care of grounds maintenance, security, community amenities (pool, tennis courts, golf course, etc). Your monthly HOA fees pay for all that. And in some communities, your HOA fees also pay for insurance and utilities like sewer, water, and gas.
Personally, I think a HOA makes more sense in a condo setting. But for stand alone houses, forget it. I'd rather not deal with a HOA.. the fees, the people that run it, or their cryptic contracts.
Ahh the friendly HOA...Training ground for frustrated city councilmen , mayors and local Boss Hoggs...I personally believe that the existence of a strong willed HOA drives down the prices of certain neighborhoods (it will in the referenced story above,for sure).
As if murky,unaccountable forces don't already have enough control over us,some misguided souls sign up for even more control with these HOA's from hell.
@Vanilla5:
They also keep people from doing certain things like spray painting their mailboxes hot pink (yes, I saw this about 3 weeks ago when house hunting), or growing a bamboo forest in your front yard (I saw this too).
ya right. they aint gonna forclose on crap. they tank there home values and lose money when it wont sell. i think this is exactly his plan, to break the hoa.
I have never, ever seen an HOA (or a condo association, for that matter) that wasn't a giant clusterfuck.
At least neighborhood associations have no contracts or force of law and the worst they can do is bitch about you to the city councilperson or try to get code enforcement to come fine you. Which, hey, I'm okay with, because those are REAL laws, not ass-backwards rules made up by an HOA with too much free time and bad aesthetic taste.
This is a real problem in Florida, some condo fees including things like water and electricity, insurance for the building, security, etc. So when a decent chunk of condo owners don't pay their HOA fees the water and electricity get turned off.
This sounds like its more like a single family home community and those fees go to landscaping, pool, security, etc. And yes when you don't pay those fees the HOA can put a lien against your house and then foreclose on the lien.
Our HOA (I used to be on the Board) didn't have too many deadbeats, but there were two homeowners that were in serious arrears; one owed over $5K! Both were taken to court and judgements placed and put on a payment schedule. One is keeping up well, but the other defaulted AGAIN. All arrears cases wind up with a lien on their property and that usually gets paid from the proceeds of the sale of that property.
Our community isn't perfect, the the HOA helps maintain property values and for the most part keeps the property up nicely. They're a necessary evil in many places.
@Vanilla5: "He's so frustrated with it because he's not trying to do EXTRA stuff with it - he's trying to do BASIC stuff"
Part of the problem is that most people are used to paying for those services with their taxes. You'll never overcome the resistance to paying for it twice.
@Sir Winston Thriller - Glad you stuck it to them.
I can see a Three's Company-esque situation with people trying to get out of HOA fees by pretending to be gay.
I'd do it. HOAs suck.
@dragonfire81: I don't get it either. The HOA doesn't own the home. The mortgage holder does. So if the HOA auctions off the house, one would think that they would have to pay off the mortgage. If the selling price goes for less the the mortgage, who picks up the difference?
@idip: I'm sure there are plenty of things I don't understand about HOAs, but we have a voluntary neighborhood association ... we pay minimal dues of $20/year if we feel like it ... the city provides our services out of our taxes ... and the state actually has funding available for neighborhood associations, some of which comes from federal programs for neighborhoods, that will pay for things like dumpster rental for neighborhood cleanup or even newsletters. It's not a lot of money, but it's enough to print a newsletter four times a year.
Why would an existing neighborhood enter an HOA when a neighborhood association and available state funding could do the same thing, without all the horrors and expense of an HOA? I get why new developments do it, but not existing neighborhoods.
first off the HOA is made up of people that live in the subdivision. The board members are your next door neighbors. you are allowed to join the board. You have a say in how the HOA is run. People that do not get involved then cry when something like this happens???
the board post notices after every meeting as required by law. This was no surprise but most people think that the board is bluffing.. HA, they found out that the board was tired of making threats and took the next legal wake up and pay attention threat to collect the monies due.
When you buy into a subdivision in most cases the HOA is the one who gets the common areas mowed, the dead bushes replaces, the trees trimmed and so forth. There is a fund to take care of streets and water. This is done so you are not hit up with a huge bill when the street needs to be repaved or a water pipe burst. There is also Insurance that has to be provided for the mailman who trips over a curb..
This was not only spelled out before you buy the home but in a contract that you had to sign.. OH you didn't read the contract?? now who's fault was that.
@Vanilla5: But ... why doesn't your city do landscaping, trash, salt & plow, and lighting? And do you still pay for those things in your taxes? (Do they break your taxes down enough for you to tell?)
(Also, dude, why do your streets need powerwashing every couple weeks?)
Didn't read through all the posts, but I would like to point out that there are no zoning laws in Houston (possibly all of Texas?) so the only thing keeping one of your neighbors from selling their house to an oil company and building a gas station next to you (or just anyone putting up a mini mart, or other commercial building) is the HOA. When I was house shopping, I could not find a neighborhood that did not have an HOA, but I was able to find neighborhoods with less restrictive and cheaper HOAs. It also appeared that it was necessary to sign an HOA agreement to close on the house, although I'm not 100% sure about that - it could have been my title agent and realtor being misleading...
Speaking as a former officer for our HOA, I will offer some insight and ansers to some questions that were asked above:
1) An HOA can go to court and file a lein against your house if you refuse to abide by the contract that was signed (agreeing to pay the dues and abide by the applicable bylaws and covenants of the HOA) when you purchased your home. If the debt became too high, the HOA would push for foreclosure and selling of the house at auction to collect the debt. This was very rare, and was usually an option reserved for families who did not pay their dues for 6-7 years. In our neighborhood, it took 6 months of non payment, and several letters from the HOA management company to get to this point, and our HOA was very reasonable in that if Harry Homeowner after receiving these letters contacted the management company and said that they ran into financial difficulties (lost a job, medical expenses etc.), the HOA would always make alternate arrangements or defer payment. Communication with the HOA was the key.
The purpose of the HOA in our area was to maintain "common areas" (park like areas that were not buildable, but which make a fine park like area for kids to play in or for neighbors to have a picnic/party.), maintance of the playground and storm water handling systems and to create and enforce rules to preserve the appearance of the neighborhood (in otherwords, it acts as a check and balance if someone wants to paint their house flourescent pink and install a 6 foot satellite dish in the front yard). Our rules are rather laxed, and the largest enforcement actions that are usually taked are for people who do not mow their lawns when it reaches their knees. I know that other HOAs are much more strict. Our HOA was hampered by poorly written rules that violated federal law and in many cases contradicted themselves because the developer of the community simply did a "Cut and paste" from 5 other HOAs.
I've lived in a neighborhood with an HOA and one without. I have very mixed feelings on them.
There are certain advantages to an HOA, we don't have folks with junk cars parked on the lawn. No one goes by with a ruler, but if you don't cut your grass in 3 weeks you're going to get a letter. That's good, as far as I'm concerned.
In our previous neighborhood, we were very lucky to have the kind of neighborhood that didn't require an HOA. Everyone had a certain amount of pride in the neighborhood and that was nice too. My next door neighboor decided to build a shed/stage in his back yard. He was in a neighborhood band and they'd put on shows in the summer there - it was a great time and I didn't mind at all. If he would have tried to do that in an HOA neighborhood though, I bet he never could have done it.
I do think HOA's tend to attract the busy-bodies - but they are usually elected positions. Vote 'em out and get on the board yourself.
As to this specific story; sounds ridiculous. My HOA also uses liens.
@BustedFlush: "we don't have folks with junk cars parked on the lawn. No one goes by with a ruler, but if you don't cut your grass in 3 weeks you're going to get a letter."
But isn't this what code enforcement is for?
We had a number or units behind in fees to our COA, almost $50,000 in fees. They did place liens. They also denied the use of common elements to people who were behind- like 3 or 4 months. You couldn't use the pool or tennis court. You also could not park on the property- all parking areas being common elements. So if you parked on the property, they towed your car- legally.
I love associations, if they correctly enforce the rules. They protect property values and keep idiots from ruining the enjoyment of your property. If you do not like them, do not buy a property protected by them. I was very well versed in my property's bylaws and declaration before I ever put a bid in.
Gawwwd, my mom lives in a detached condo, the condo association has rules up the wazoo. One of them is that when we come to visit our car cannot be parked in her driveway overnight. It has to be parked way the hell down the road by the mailboxes. We have 2 kids - we need stuff out of the car many times at around midnight - so we're trudging down the road in our pajamas to get jr's toothbrush or teddy bear. In the cold. Oh, and being outside of your condo in your pajamas? Also against the rules.
I live in a condo and I'm on the board of my HOA (I'm not a bluehair as some have suggested, I'm 26 years old)
There's an owner in my complex who rents her unit out. She's over $3000 behind in her dues (hasn't paid it for years) she breaks rules all the time (doesn't get tenants to meet with the manager before moving in or even notify that new tenants are moving in, doesn't give a copy of the rules to tenants, lies about who will be living in the unit) and she has been served five times but has never contacted the HOA's lawyers.
My HOA manager and president already have placed a lien on the property, but now they are talking about foreclosing on her home. Considering that the HOA fees go to pay insurance on her property, and that all the rest of us pay our dues and follow the rules, I really don't have sympathy for her. She's been given years of second chances and they've tried to work out a payment schedule in the past. That time is over, she needs to pay up or get out.
@LatherRinseRepeat: In my neighborhood, which is an open community of single family homes, the home owners association is charged with maintaining the architectural character of the neighborhood and managing community ammenities (pool, community centers, trails, etc). Its a little annoying to have to put in an application to the HOA to make changes to the exterior of my house, but this same mechanism also prevents the neighbors from maintaining chop shops and smelting facilities on their property or building McMansions. Its also kept out the McMansions. It also acts as a central point from which neighborhood initiatives can be communicated. Maybe I have a particularly nice HOA, but I like it.
@LatherRinseRepeat: There are also restrictions to what you can do to your property, which sounds stifling at first but it stops jokers from painting their house hot purple, trucks on cinder blocks left to rust on the lawn, and other bad-neighbor events.
I live in a condo with a HOA and I like it because when it snows, the neighborhood streets are always treated and plowed, the gate is maintained, the gym is always clean and the equipment is well maintained, the internet in the clubhouse office (which we had to use when we moved in because we had to wait 3 weeks for our internet to be installed) and the pool is always clean and always has a lifeguard. The bushes are trimmed and clean, the neighborhood isn't riddled with litter (people don't litter to begin with, and if they do, it gets picked up) and the condo complex is extremely pet-friendly. Lots of areas to walk in, lots of doggie bag stations.
Then again, our condo complex is very family-friendly as well. And our HOA rules are very simple. Don't let guests park in the clubhouse parking lot M-F during business hours. Don't park in the reserved spaces because residents without garages have paid for their specific spot (goes along with don't be a douchebag to other people). Clean up after your dog. Don't mount satellite dishes to our lovely stone and brick. Leave the rest to us.
@LuzioFantazmic: I don't know how this is flying either. If I don't pay my HOA they put a lien on my house. They [b]can't[/b] forclose.
@Piri: She bought the property. You need to get over you god complex and let home owners own their own property.
@dragonfire81: Maybe it's a Texas thing? I'm pretty sure around here they can put a lien on the property, sue you, have your wages garnished, etc, but they can't just sieze the property.
That's pretty crazy, especially considering how corrupt and poorly managed so many HOAs are!
@Corporate Guy:
She bought the property subject to the rules and obligations of the Condo Association. She needs to live up to that obligation or move out. There is no "god complex" in using all available means to force someone to comply with the rules.
@albear: I think a HOA sounds like a horrible idea and I will follow your lead when I'm looking for a home.
I thought only banks could foreclose on a home...am I missing something here? How can a homeowners association take your home for not paying association dues. Isn't that like a car dealer trying to foreclose on your home for not paying off an auto loan?