If your neighborhood is governed by a Homeowner’s Association, also called an HOA, there was likely some mention of it verbally or amongst the tiny writing in your deed or other closing papers. There may have also been grand promises upon your purchase that the common areas would be cleaned and manicured, the community pool would be cleaned, you would have regular security surveillance, and neighbors would not be allowed to have yards looking like car junk yards. You are excited about your new, neat neighborhood and you have agreed to pay HOA dues, which appear to be a nominal amount for the neighborhood protection and oversight. Let us suppose it is $150.00 quarterly, thus $600.00 for the year.

So, you have purchased your home, the community pool is cleaned only a few times during the summer, the grass near the entry area of your neighborhood has grown to new heights, you have not seen a soul in the security shack since the move in, and your neighbors have painted their home lilac with lime green trim.

You have never gotten a notice about a homeowner association meeting, you have no idea of who is in charge of your Homeowner’s Association, but you promptly get a quarterly bill for your HOA dues. Let’s add a situation where you get a citation from the invisible HOA for $175.00, for parking your own car across your own lawn. Your mortgage is current, but you are not happy with the Homeowner’s Association negligence, so you decide to not pay the citation or the regular charges.

May I step in at this juncture as a bankruptcy attorney of nearly thirty years, and say that this is not a good idea, nor the way to go about venting your frustrations about your slack HOA. Unfortunately, the HOA has the heavy hand of the law on its side by way of lien attachment. A lien is a lawful debt that attaches to the equity or interest in your home, real estate, or other non-exempt property. The HOA lien has the same power behind it as the mortgage payment default. Yes, the HOA can foreclose against your home, even if you are up to date on your mortgage payment and the citation charge sticks even if you have moved the car off of your lawn. I have had to intervene with settlement arrangements or file a bankruptcy to save homes from foreclosure by HOAs.  It has been a travesty for those who did nothing. The homeowner could have very well been someone who otherwise has good credit and is up to date on their mortgage payment but considered the HOA bill insignificant or unfair.

This is how things usually happen: Year 1 homeowner Pete doesn’t pay but gets bills and reminders about the unpaid citation and dues. The HOA bill is now $675.00 plus possible late interest and/or late charges. Year 2 and Pete still hasn’t paid, and the bill is now $1,275.00 plus late charges. Year 3 comes along and the bill is now $1,875.00 for Pete. He does not address the bill. Not so surprising, his neighbors Dave, Janet, and Harper have not paid their fees either because they are also mad about the HOA being slack. The HOA is now owed a minimum of $7,200.00 collectively from these homeowners. Whether the HOA has a legitimate reason for not keeping its end of the bargain, it will have a right to commence a lawsuit or a foreclosure against the homeowner.  Now, it is worthwhile to the HOA to hire an attorney to begin foreclosure against the four homeowners since so much debt has accrued. The homeowner mistook the previous silence from the HOA for patience or the same being uncollectible, while the HOA was just biding its time to come in for the kill. There is more!

Now, the HOA’s hired attorney sends a bill to each homeowner. In addition to the $1,800.00 dues bill, the minimum balance owed is now $2,800.00. You got it! An additional $1,000.00 for attorney fees (before the lawsuit or foreclosure even begins), which if reasonable under the circumstances, is also due to be paid by the homeowner.  The homeowners  refuse to pay the big bill, or at this juncture, cannot come up with this sum of money. Next comes the spiral of foreclosure and sale of the home.

I would suggest that if you find yourself in the position of Pete or the other homeowners and you are at any juncture in this madness before the actual final sale of your home, there may be hope for stopping the spiral and the sale. A homeowner may likewise have some claims against the HOA for its failure to live up to its obligation, but time is generally of the essence and that may be a fight for another day. At the earliest sign of trouble, a consultation with an attorney who knows bankruptcy law or handles homeowner defense work may do such a homeowner some good.

Homeowner Association management can run the gamut of a mismanaged mom and pop shop to a greedy well-oiled corporate machine. It’s not often that the professional well-oiled corporate machine or the well-run mom and pop operations are hauling homeowners into court for HOA fees.

Because the travesty of HOA foreclosure has become more pervasive over the years, and my hope that is that never happens again to another person, I felt obliged to bring this trend to your attention in this blog.

So, know that though it may not always live up to its obligation, that HOA is serious!

The charges and dollar figures stated in the example above are not from any actual HOA or law firm, but only an example to depict the accruing nature of charges. The names used are fictional for purposes of this blog and do not refer to any actual clients of the author or Eddye L. Lane, P.A.

The information contained in this blog is general information, gleaned from thoughts of the author. None of the information contained herein is intended to serve as legal advice for any particular person or any particular circumstance. If you have circumstances which you believe are related to the subject of this blog, you should consult an attorney or other professional for a full and thorough review and analysis of your situation.