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I told myself I would stay away from this thread, but just can't help it.
Easements have nothing to do with this discussion as a few wise ones have pointed out. Easements simply grant an outside party a perscribed use of all or a particular part of a property. Install/check a gas meter, use a walkway, get access to the roof, etc.
The declarations have everything to to do with this discussion. Whenever you buy a property that is subject to a mandatory HOA there will be a reference to the declarations within the deed. These declarations layout the groundwork (i.e. CCRs) for how dues and asessments are charged and collected.
Also, pretty darn sure (I'd say 99.9%) the HOA cannot collect a penny from a new owner except from the time that they have taken ownership in the event of a senior lienholder foreclosing. I just bought a condo that was foreclosed by the bank 10 mnths ago. However, there were 17 mnths of dues owed. The bank paid the 10 mnths of dues but the HOA had to eat the other 7 mnths when we closed.
If you buy a property via conventional sale (ie no previous foreclosures) you are subject to any prior past due fees and assessments that have not been paid. But thats what you pay yr attorney for right?
And that's a good point to. Even banks can't make up for late fees etc. on a mortgage unless they can get the auction price to cover them. They can't sell at auction and then come behind and tell you to pay up for the previous lien once it's out of auction.
And that's a good point to. Even banks can't make up for late fees etc. on a mortgage unless they can get the auction price to cover them. They can't sell at auction and then come behind and tell you to pay up for the previous lien once it's out of auction.
Yep. In Charlotte (very important to distinguish) when the most senior lien holder forecloses there are only 2 encumbrances that survive. Property taxes owed and as of a couple of years ago... leases. The IRS has a right to a "redemption period" but thats a whole notha ball game.
HOAs for condos are governed by a completely different set of NC statutes than what we have been discussing here, so any examples regarding condos are irrelevant. Condo HOAs are a lot more complex because they are responsible for the actual structure that people are living in.
You are incorrect on the definition of easement.
47F uses the term "easement" only with regards to common elements.
On the first point if a developer chooses to make the entire development private property, then yes they can maintain their own streets. It's almost never done due to the expense. HOAs in NC do not have arrest powers nor do the developers. On the last point, the part of the water and sewage that exists on the owner side of the property line is their responsibility regardless of there being an HOA or not.
You have confirmed most of what I have said (somewhat). Of course, HOAs don't have arrest powers. As I said earlier, if proper signage has been installed, violators of tresspassing, parking and other infractions can be arrested. The arrest would be by local authorities, ie. police dept. Also, water connections are the responsibility of the homeowner until connected with municipal source. I believe I mentioned that.
Last edited by newcomerfromuk; 06-04-2011 at 10:08 AM..
I owned a home in VA for 30 years that had a two HOA involved. One covered multiple divisions and neighborhoods. The other was more local covering the 75 units where we owned. I was HOA president for 3 years and it was not one of the highlights of my life. Too many people don't read the HOA documents before they buy and then want to fight with the owners (volunteer neighbors) because they constantly violate the covenants, which they signed at closing. Then, they want to hold out their assessment because they think the grounds maintenance, trash collection, roof repairs, etc., are not their problem. Then, their neighbors, have to place liens and sometimes go to foreclosure (one woman owed over 9K to our association when I was not on the board and the board had to file foreclosure. Note that the owner's bank was first in line and the 9K was pretty much lost, which means the responsible owners had to carry the costs of the lost revenue. HOAs act as micro government boards, protecting the investments of the owners. A few get full of themselves and give all HOAs a bad name. The secret to a good HOA is for owners to get involved and to have a good management company. Someone recommended getting involved to the point you get on the board - or at least attend the monthly meetings so you can keep up. The HOA is there to protect your investment. If people don't like this arrangement, they need to sell and move to an area where single wides are allowed beside million dollar homes. Personally, I like the protection a *good* HOA can provide, as long as the board is consistent in its enforcement of the covenants.
I owned a home in VA for 30 years that had a two HOA involved. One covered multiple divisions and neighborhoods. The other was more local covering the 75 units where we owned. I was HOA president for 3 years and it was not one of the highlights of my life. Too many people don't read the HOA documents before they buy and then want to fight with the owners (volunteer neighbors) because they constantly violate the covenants, which they signed at closing. Then, they want to hold out their assessment because they think the grounds maintenance, trash collection, roof repairs, etc., are not their problem. Then, their neighbors, have to place liens and sometimes go to foreclosure (one woman owed over 9K to our association when I was not on the board and the board had to file foreclosure. Note that the owner's bank was first in line and the 9K was pretty much lost, which means the responsible owners had to carry the costs of the lost revenue. HOAs act as micro government boards, protecting the investments of the owners. A few get full of themselves and give all HOAs a bad name. The secret to a good HOA is for owners to get involved and to have a good management company. Someone recommended getting involved to the point you get on the board - or at least attend the monthly meetings so you can keep up. The HOA is there to protect your investment. If people don't like this arrangement, they need to sell and move to an area where single wides are allowed beside million dollar homes. Personally, I like the protection a *good* HOA can provide, as long as the board is consistent in its enforcement of the covenants.
At the risk of beating a dead horse, the issues concerning HOAs are somewhat more prevaliant among the singe-family homes where even having an HOA is somewhat of a mystery, let alone having read the CCRs in order to comply with them. Later on, the HOA suddenly springs up and people are somehow out of compliance, even though they have been doing XYZ for the last 10 years without complaint. That is one of the issues that have been addressed on this board.
I am also one who does not believe that common area maintenance, streets, light poles are not my problem. I pay taxes for them to be maintained. In my opinion, having to pay HOA fees again is simply another tax that is levied to do the same work. So, I am paying twice. That does not make me happy!
It sounds as if you are referring more to an HOA that would be in existence in a multifamily, or condo/townhouse environment.
I am completely against foreclosing on a property simply because the homeowner did not pay their homeowner's dues or racked up fines. In my opinion, that is an abuse of power...of the HOA. I can surely see placing liens on the property, but, to foreclose does not just punish the homeowner, it punishes the entire neighbourhood by reducing the market value of that property; something in this day & time, nobody can afford. I won't go into what else I think that it represents as that is not relevant to this post.
In today's market, having an HOA/not having an HOA makes no difference on your "investment". Foreclosed/ short sale properties...now, that is what makes the difference. In my neighbourhood, where we are flush with HOAs (6 different ones in the subdivision), our property values are in the toilet due to massive foreclosures. My son lives in an area near to Weddington, NOT in an HOA, has no foreclosures or short sales around and his home value is stable.
Kind'a throws a wrench in that theory...
The system of HOAs needs to be regulated and the management companies that advise the volunteers need to be licensed and held to a very high standard of culpability. As it stands now, anyone can be a "property manager' and there is little/no education required nor needed. They are the ones that are giving the whole HOA system a bad name.
Your beating a dead horse as you put it, is full of logical fallacies and conclusions that are not based on how HOAs work in NC.
People pay HOA fees to maintain common areas that are private property owned by the neighborhood. Taxes are not used for this. Taxes only maintain public property of which a HOA will have no authority.
Cities provide city lights on city streets. Your HOA fees don't supply this unless the HOA decides to upgrade beyond the standard city lights.
Whether or not a person actually bothers to read the CCRs before making an offer on a house has nothing to do with the validity of the CCR. I read mine and was completely aware of the restrictions before offering. It was, IMO a feature, not a defect. I can't imagine why anyone doesn't do this basic research.
If a person doesn't pay the dues, there are two options. Raise the dues on everyone else to pay the bills. HOA starts foreclosure proceedings. This is all that NC law allows for. There are no other options.
On your personal anecdote about home values of your neighborhood vs those in Weddington, your logic is faulty because there are HOA neighborhoods that are not in trouble and neighborhoods without them that are.
Like the president of the USA, the qualifications for being on the board of a HOA do not require management training. All homeowners, by law, can run for office and have to be elected by those voting. The management company answers to the board, not the other way around.
A person's best bet to avoid a bad experience with a HOA, as repeated many times here, is to do your research before making an offer on a house.
[*]If a person doesn't pay the dues, there are two options. Raise the dues on everyone else to pay the bills. HOA starts foreclosure proceedings. This is all that NC law allows for. There are no other options.[*]On your personal anecdote about home values of your neighborhood vs those in Weddington, your logic is faulty because there are HOA neighborhoods that are not in trouble and neighborhoods without them that are.[/list]
There really isn't an option for how a board acts when someone doesn't pay dues. It's either in the CCRs or it's in 47F for those that need an alibi. A board cannot raise rates on it's own and in fact it is very hard to get rates increased in an HOA.
Likewise, a board cannot directly start foreclosure proceedings unless you are being very liberal in your construction of that phrase. A foreclosure cannot happen without a lien being filed first.
As far as home values go, I have looked at the stats and I don't think HOA attorneys or management companies properly warned HOA boards that FCs could have a negative impact on a neighborhood which certainly did happen.
In today's economy foreclosing on someone when is unable to pay means the house goes into FC twice. Once by the HOA and again by the mortgage company. This gets picked up by the market if the homes are left empty too long and it hit the Mecklenburg County assessor's office when trying to determine if foreclosures affected a particular tax neighborhood.
I'm not saying folks should be allowed to stay without paying their dues, I'm just suggesting that other methods could be helpful for everyone and not just the HOA lawfirm.
A lien can be put on a property without going through a FC or simple communications can determine that the homeowner is going to lose the house to the bank and maybe having the HOA stay out of it will make the house emptier for less time and cause less liability for the HOA.
I'd rather see a short sale with the bank's help than spending all the money for a FC that isn't going to help anyone.
You yourself have harped on declining home values in the area. If that is true then that needs to be considered when deciding on a remedy.
OTOH if the owner is being a jerk and not paying but are able to pay then FC is likely the only thing to get their attention. In that case you hope to sell the property back to the original owner after teaching them a lesson but it's still a game that can backfire.
Your beating a dead horse as you put it, is full of logical fallacies and conclusions that are not based on how HOAs work in NC.
People pay HOA fees to maintain common areas that are private property owned by the neighborhood. Taxes are not used for this. Taxes only maintain public property of which a HOA will have no authority.
Cities provide city lights on city streets. Your HOA fees don't supply this unless the HOA decides to upgrade beyond the standard city lights.
Whether or not a person actually bothers to read the CCRs before making an offer on a house has nothing to do with the validity of the CCR. I read mine and was completely aware of the restrictions before offering. It was, IMO a feature, not a defect. I can't imagine why anyone doesn't do this basic research.
If a person doesn't pay the dues, there are two options. Raise the dues on everyone else to pay the bills. HOA starts foreclosure proceedings. This is all that NC law allows for. There are no other options.
On your personal anecdote about home values of your neighborhood vs those in Weddington, your logic is faulty because there are HOA neighborhoods that are not in trouble and neighborhoods without them that are.
Like the president of the USA, the qualifications for being on the board of a HOA do not require management training. All homeowners, by law, can run for office and have to be elected by those voting. The management company answers to the board, not the other way around.
A person's best bet to avoid a bad experience with a HOA, as repeated many times here, is to do your research before making an offer on a house.
Dude, the only place that I have lived that had an HOA has been in NC. I was also the president of my HOA. I am a trained property manager and have had 10+ years in real estate training.
While we know that you are well aware of all things HOA when it comes to buying a house, many people don't. And, while it is true that the management company actually answers to the board, as you have said...the mgmt company is legally bound to advise the board on their legal options and what they are supposed to be doing that keeps within the confines of the law. Unfortunately, most mgmt companies are not trained themselves and have no clue on what they should/should not be doing. That is where one of my biggest arguments are. They should be trained/licensed professionals so that they can properly advise the board which then makes the decisions.
GCharlotte is correct. Our mgmt co. did not realize nor did they properly advise my HOA on the adverse affects of foreclosures on the property values for the subdivision. Unfortunately, the board learned this the hard way...since they did not want to listen to me.
And, yes, it is possible to file liens against the property in NC. Anyone can file a lien against a property in NC. I have personally done so on behalf of my HOA. It is then up to the board/mgmt co. to follow up and ensure that those liens are paid when the house is sold/refinanced.
At the risk of beating a dead horse, the issues concerning HOAs are somewhat more prevaliant among the singe-family homes where even having an HOA is somewhat of a mystery, let alone having read the CCRs in order to comply with them. Later on, the HOA suddenly springs up and people are somehow out of compliance, even though they have been doing XYZ for the last 10 years without complaint. That is one of the issues that have been addressed on this board.
We are beating a dead horse. You are incorrect in saying, "Issues concerning HOAs are somewhat more prevaliant among the single family homes." Condos are in the same situation and are generally governed their individual CCRs.
The system of HOAs needs to be regulated and the management companies that advise the volunteers need to be licensed and held to a very high standard of culpability. As it stands now, anyone can be a "property manager' and there is little/no education required nor needed. They are the ones that are giving the whole HOA system a bad name.
State law now requires that Management companies are trained and licensed in order to operate. Some are better than others. But what you seem to not grasp is that HOAs are made up of homeowers that choose to be on the board and make ammendments or additions to rules or CCRs. They make decisions based on majority votesl Nobody is picked on and all decisions reflect the feelings and desires of most of the people in the communty. Taking action to have a house forclosed upon is the very last step ever taken, especially in today's economy.
There are always those individuals that don't wish to comply and/or pay dues but are often the first to whine and complain when things aren't exactly as they wish, yet they do not attend meetings or even cast votes.
It is similar to the lady that once told me, while discussing politics, that my opinion isn't worth squat since I don't vote (I can't. I am not a citizen). You really need to become active in your HOA and you might understand the operations and how worthwhile an effective HOA can be. You are part of the policy making process whether you vote or not.
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