Woman Doesn’t Join HOA, So It Seizes And Sells Her House

HOA_houseIf I’ve learned anything from this site over the years, it’s that homeowners’ associations are evil and to be avoided. Sometimes you don’t have a choice, though: the home of your dreams or basic neighborhood amenities require it. And sometimes, as one Kentucky woman discovered, not joining the HOA means you can lose your house.

If that sounds farfetched, well, a quick look through the Consumerist archives shows us that it’s happened before. In one horrific case, a man set his house on fire after a court awarded ownership of it to his HOA over a dispute regarding…unpaid dues and fines he racked up during a dispute over a fence.

This happened in Lexington, Kentucky. According to TV station LEX 18, the 75-year-old bought the house back in 2007, but works as a horse trainer and isn’t home all that much. Apparently she didn’t have anyone grabbing her mail: the HOA claims that they’ve sent her dozens of letters and legal summonses since 2009.

The HOA dues in her neighborhood? $48 per year. She owes a total of $288. The homeowner says that she just tossed the letters she received, assuming that the HOA was some kind of social organization that collected money from residents to access the pool or something. “I didn’t know it was mandatory to join this…homeowners’,” she says with some distaste. “I told them, I’m not joining.”

The good news, if there is any in this situation, is that the company that now owns her house did not immediately throw her out in the street. Also, she did get some of the proceeds: about $80,000. She paid $125,000 cash up front for the house in 2007, and that’s about what the house should have sold for today.

HOAs do often foreclose on abandoned homes, but there’s a difference between “owner is frequently away on business and not good about reading her mail” and “owner has completely abandoned her house.”

LEX 18 Investigates: Small Debt Costs Lexington Woman Her Home [Thanks, Rob!]

9 Examples Why You May Want To Avoid Homeowners Associations Like The Plague
HOA Board Member Says They’re Not All Money Grubbing Scumbags

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  1. nchiker says:

    I’m on the fence about this one. Assuming the HOA was part of the contract she signed for buying the house, she is legally liable for paying the dues. Most HOAs are mandatory, some not. I assume this one was. Most mail I get is junk, but I still open it up to make sure. She just chucked it. What to do if everyone else is paying their share, but someone is not? For many years. This has nothing to do with if HOA are evil scum or not, and everything to do with paying your bills.

    That said $288, is stupid to foreclose on. I would hide my head in shame if I was on the board of the HOA that did that.

    • petepuma03 says:

      I disagree. The homeowner is the one who be ashamed. You’re not paying dues that amount to $48 per year?!?! Come on… PER YEAR.

      I’m sure with dues this low, they are only covering mowing common areas or something similar.

      “The homeowner says that she just tossed the letters she received..” sorry, this is totally the homeowner’s fault.

      If someone refuses to pay, what choice does the HOA have but to foreclose? What is to prevent everyone from stopping their payments then? Why should others bear the burden of her neglect? The HOA owns the common areas– who will maintain them if people stop paying dues?

      I have to believe she was told of the HOA during the closing process.

      Again- $48 per year.

      • rmal says:

        The HOA could have pursued a civil action against the property owner, one that would not have lead to foreclosure. There are a number of other alternative they could have pursued in lieu of taking this woman’s house.

      • schwartzster says:

        I’m sure this varies by state, but in my area the HOA can put a lien on the house so that if it is ever sold, they get first cut at the proceeds in order to collect the unpaid dues along with fines and interest.

        This situation is also unique because the house was not mortgaged; usually the mortgage servicer would get a notice of intent to foreclose and take steps to protect their interest in the property, I would think by paying the balance to the HOA and then billing the homeowner.

      • CommonC3nts says:

        The HOA should just give up collecting instead of stealing someones house.
        No HOA is worth stealing a house over no matter what the fees are.
        If the homeowner does not pay then dont let them use any of the HOA services, problem solved.

  2. oomingmak says:

    I’m on the fence about this one too.

    On one hand, the HOA is clearly acting EVIL in this case. Who forecloses on a home as a means of first resort for a measly $288? They should have at least gotten an in-person confirmation from the homeowner about HOE dues payment vs foreclosure.

    On the other hand, I’m getting very tired reading about people complaining about their HOA when in so many of these cases the homeowners are breaking the contract they signed with the HOA when they bought the property. It’s pretty simple — if you don’t like the terms of the HOA, don’t buy the property.

    • CommonC3nts says:

      The problem is the builders start the HOA before anyone moves in so they can keep cashing in later by having the HOA hire them for the maintenance services.
      We need a law that states a subdivision or zone cannot have an HOA until the area has X% occupancy and then it goes to a vote of residents.
      A non show/no vote would = no, so the only way to get the HOA enacted would be to actually get the residents to show up to a meeting to vote.
      This would protect those that bought land from unfairly getting stuck with an HOA.

      The main problem is in some areas the only homes for sale are in an HOA so you can be just stuck getting into one when you hate HOAs.

      • CommonC3nts says:

        There should also be limits on HOA votes of like 10 years. Every 10 years enough people have to show up to vote to keep the HOA or it is disbanded.

  3. MarkyMark says:

    HOAs are enforcing the rules you agreed to when you bought in to the community. She admittedly just tossed the mail she got. No one else to blame here IMO. The HOA can reasonably avoid this by asking for alternative contact information. This happens in our HOA when units are rented out and both the owner and the occupants never bother to forward/read the mail or leave alternate contact information.

    • CommonC3nts says:

      The HOA should never have the power to foreclose in the first place.
      At most only a lien should be allowed to be placed so the house cannot be sold until the fees are paid.
      How an HOA has the power to foreclose makes no sense.

  4. CommonC3nts says:

    This is so wrong. Steal someones house for $288???

    We need laws to protect people from HOAs.

  5. Ravensclawth says:

    “Sometimes you don’t have a choice, though: the home of your dreams or basic neighborhood amenities require it”

    Uhm, no. If it has a HOA, it’s not the home of your dreams. Keep looking.