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IC_delight, nobody is listening anymore. Your generalizations have nothing to do with NC law. Get back to us when you can cite NC statutes to backup your notions. This was asked for many pages ago.
I can't find anything wrong with IC's statements. The only thing interesting that is NC specific is that the federal debt collection act does not apply to the original creditor as he said.
An HOA can't be held liable under the federal laws for collecting it's own debts.
BUT, it CAN under the State law and that might be of interest to you on the creditor issue or maybe not.
IC_delight, nobody is listening anymore. Your generalizations have nothing to do with NC law. Get back to us when you can cite NC statutes to backup your notions. This was asked for many pages ago.
Yantosh, these are not generalizations. A lienholder can only divest lienholders more junior to it. This is fundamental property law in every state. In particular, a junior lienholder cannot divest a senior lienholder of the senior lienholder's interest. Basic property law.
As to your inferred references to the federal Fair Debt Collection Practices Act, the act is federal not state. Here is a link to a brochure provided by the Federal Trade Commission on the FDCPA: Fair Debt Collection Practices Act
If you are referring to the attempts to avoid liability under the federal act by claiming the creditor is the "original creditor" or that the transactions are not "consumer transactions" or "extensions of credit" you are referred to the definitions under §803 particularly (3) and (4).
If you are referring to the HOA industry's nationwide opposition to the application of the FDCPA to HOA's and the HOA vendors (e.g., management companies), you are referred to publications from the HOA vendor trade group known as Community Associations Institute (CAI). In particular, you are referred to pg 31 of CAI's most recent Public Policies: CAI's Public Policies
Generally members of this trade group utilize the HOA's foreclosure power in order to extract payments from the homeowner and to divert those payments to the vendors rather than to the homeowner's assessment account. The homeowner will be threatened with foreclosure to extract whatever junk fees the vendors are demanding. This unscrupulous practice is extremely lucrative for the HOA management companies and attorneys. Laws have had to be adopted in many states to prohibit this "priority of payment scam". Even in those states, the vendors are quite aggressive about the shakedowns. The vendors are actually trying to threaten homeowners with foreclosure lest they waive their rights under the very laws designed to protect from such unscrupulous behavior. California is in the process of adopting a law to prohibit the vendors from forcing homeowners to waive their rights against the priority of payment scam, see status of SB 561: http://www.californiaalliance.org/pd..._one_pager.pdf
North Carolina doesn't have a law prohibiting the vendor shakedown and fee pyramiding schemes yet, but NC HB 165 includes provisions to end that practice. The HOA vendors are fearful that HB 165 will put an end to the priority of payment scam.
Again, here is one North Carolina example of a North Carolina HOA management company opposing a North Carolina bill that would put an end to the priority of payment scam that this trade group tries to practice in virtually every state: Community Association Management | Legislative Update - NC HB 165
Look near the end of the bulleted list of "concerns" of the management company and you'll see that the management company is concerned about changing how "Associations" must apply payments. This restriction will also apply to the agents of the HOA to prevent the vendors from diverting assessment payments to the attorney or the management company junk fees.
You already know what the next step will be because other states are ahead of NC in addressing the actions of the unscrupulous vendors.
HOA board members are elected by the homeowners and are responsible for the financial operations of the association. Those responsibities include the CC&Rs, Reserves, Rules and Regulations, ByLaws, etc. All of these documents need to be reviewed and updated periodically as changes take place in the community. The reserves are critical in this market because funds must be available to cover any major problems with building maintenance (roof repairs, siding, in/outside painting, boilers, elevators, etc.). A portion of your monthly dues has to be set aside for the reserves to cover future expenses. When you purchase your home, your lender reviewed the financials on your HOA and looked at the % of reserve funding, deliquencies in HOA dues, collections, owners vs. rentals, etc. If the financial are not meeting lending standards, than people cannot get funding for home purchases. HOAs need to get FHA qualified for their communities to make it easier for people to buy/sell their units. The board members are not always business saavy and can lead associations into financial ruin and then create special assessments for homeowners to cover costs. The drama by homeowners and board members can and have caused many lawsuits so study up and pay attention to who's running your association. Remember protect your investment.
HOA board members are elected by the homeowners and are responsible for the financial operations of the association. Those responsibities include the CC&Rs, Reserves, Rules and Regulations, ByLaws, Financial Statements, etc. All of these documents need to be reviewed and updated periodically as changes take place in the community. The reserves are critical in this market because funds must be available to cover any major problems with building maintenance (roof repairs, siding, in/outside painting, boilers, elevators, etc.). Also as homes become a short sale or REO's, HOA dues aren't being paid so this is a potential financial risk. A portion of your monthly dues has to be set aside for the reserves to cover future expenses. When you purchased your home, your lender reviewed the financials on your HOA and looked at the % of reserve funding, deliquencies in HOA dues, collections, owners vs. rentals occupancy, etc. If the financials are not meeting lending standards, than people cannot get funding for home purchases. HOAs need to get FHA qualified for their communities to make it easier for people to buy/sell their units. The board members are not always business saavy and can lead associations into financial ruin and then create special assessments for homeowners to cover expenses. The drama by homeowners and board members can and have caused many lawsuits so study up and pay attention to who's running your association. Remember protect your investment.
HOA board members are elected by the homeowners and are responsible for the financial operations of the association. Those responsibities include the CC&Rs, Reserves, Rules and Regulations, ByLaws, etc. All of these documents need to be reviewed and updated periodically as changes take place in the community. The reserves are critical in this market because funds must be available to cover any major problems with building maintenance (roof repairs, siding, in/outside painting, boilers, elevators, etc.). A portion of your monthly dues has to be set aside for the reserves to cover future expenses. When you purchase your home, your lender reviewed the financials on your HOA and looked at the % of reserve funding, deliquencies in HOA dues, collections, owners vs. rentals, etc. If the financial are not meeting lending standards, than people cannot get funding for home purchases. HOAs need to get FHA qualified for their communities to make it easier for people to buy/sell their units. The board members are not always business saavy and can lead associations into financial ruin and then create special assessments for homeowners to cover costs. The drama by homeowners and board members can and have caused many lawsuits so study up and pay attention to who's running your association. Remember protect your investment.
I think you are confusing HOAs (in North Carolina part of the Planned Community Act) with condo associations which are related but different breed under NC law.
HOA does not need a lien because it already has an easement on the property via a declaration on the deed/land record. This easement is not erased via a foreclosure. So any new property owner, including the bank will end up having to pay the outstanding fees/dues.
In NC, an HOA can collect fees and fines, by initiating a foreclosure in court. If there is a mortgage holder, then that mortgage holder will come and bid whatever is owed on the property to protect themselves. This means they become the new owner of the property assuming they bid high enough to win the auction. The proceeds from the auction are used to pay off taxes, foreclosure fees, mortgages, other creditors, etc. If any money is left, the original homeowner gets it.
I don't think you're using the term "easement" properly as it is not interchangeable with "lien"... When I think easement I think of a right of a utility to dig up your yard to get to their wires/pipes/equipment/etc - or the right of an owner to use part of your property to get to their property (like a flag lot).
An easement is the assigning a property right. I did not say it was interchangeable with a lien. In fact I said just the opposite.
Yeah, it's that "property right" that I'm questioning... You stated they didn't need a lien because they have an easement - meanwhile an easement is simply defined as a right to use the property, not something related to ownership. Along the lines of "hey, you put up an improper fence and we warned you. So we have the right to come on your property and remove it."
This does not promote them above or even at the level of the primary lien holder leaving them junior to satisfying the first mortgage from any funds from a distressed sale. More often then not, they're not even covering that primary lien in a foreclosure sale.
So post foreclosure when there is a shortfall to satisfy everything, you seem to be insinuating that the HOA has the right to apply past dues/fines/etc to the new owner via an easement... I don't see how that can be the case legally as they would need to attach a lien in order to enforce that after an ownership changeover.
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