With a sea of homes left empty by erstwhile homeowners who couldn’t afford the mortgage, a number of homeowner associations around the country have are stuck having to pay for the upkeep on vacant properties lest the value of the remaining homes be harmed any further.
And these HOAs must find ways to pay for this maintenance without collecting any dues from the former tenants. That means higher dues for the remaining owners.
“There was a foreclosure unattended for such a long time with a pool so dirty it could have created a haven for West Nile virus. So we had to get a pool service to come treat it,” one HOA president tells the Atlanta Journal Constitution about his organization’s ordeal. Just two vacant homes in his neighborhood have cost the HOA $23K in labor and lost dues.
The HOA had hoped to recoup some losses by filing a lien against the property but Georgia law would erase any such liens — for anything from delinquent HOA dues to unpaid contractors — after the property is foreclosed on.
The President of the Georgia Bankers Association says that, before foreclosure, it’s not the lender’s responsibility to make sure homeowners pay their HOA dues or keep their property up to snuff. So why should the bank be forced to honor a lien for the former homeowner’s debts?
The AJC reports that Florida and other states have passed laws that allow HOAs to get at least some money hack from the bank when a vacant property is finally foreclosed on.
Even so, it can still be over a year or more between the time when an owner abandons a house and when the bank finally forecloses. For HOAs to survive, they’ll need to learn how little they can spend to maintain a vacant property without its appearance having too much of a negative impact on the rest of the neighborhood.