Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I don't think anyone has brought up the financial responsibility of living in a mandatory HOA- your home can & will be foreclosed on if you are unable to pay your monthly dues. It adds a third item to your homeownership that can put you at risk for foreclosure- mortgage, property taxes, & HOA dues.
No one ever wants to think about falling on hard times and being unable to meet your basic financial requirements, but unlike being unable to pay a student loan or credit card (when nothing THAT bad will happen to you, being unable to pay HOA fees can make you lose your home.
I think many of the problems with HOA's is we treat them as private organizations. WE should be honest about what they are, which is a government. We have effectively created a new level of government at a sub-city level. I know people disagree but look at a modern HOA.
1: When you move there you are automatically bound by the rules(laws)
2: Maintains streets(often) public pools/playgrounds (parks) community buildings (offices and rec centers)
3: You elect board members(lawmakers) who can make and change the rules(laws)
4: You must pay the annual amount assessed against you to support this organization and what they do (property taxes)
5: If you break the rules you can be ticketed and fined
6: If you fail to pay your fees(taxes) or fines your property can be confiscated.
It is a government. It needs to be regulated and treated as such. If people began to view it that way, and took it as seriously as they do their city government, people would be much more involved in their HOA, elections would be between candidates who would actively run, and have real differences, and platforms, and these outrages wouldn't happen. Also if it were regulated correctly as a government there would be more checks on them from the governmental levels above.
HB 1228 – A quick list of what we can expect from HB 1228 is
Prerequisites to foreclosure
Judicial foreclosure required
67% can remove foreclosures from their community
A third-party collection section will connect to FDCA
Priority of payment section
Cuts out the attorney contingent agreements
The owner can always communicate with the association regarding the debt even if an attorney has been retained
An association may not sell or otherwise transfer any interest in the associations accounts receivables for a purpose other than as collateral for a loan
Below is the link to the bill itself to read and become familiar with the new HOA oversight law as well as the confirmation that Governor Rick Perry signed this historic oversight bill Friday, June 17th:
http://www.thenationalhomeownersadvocategroup.com/downloads/HB1228RepHaroldDutton00011.pdf (broken link) Texas Legislature Online - 82(R) History for HB 1228
but unlike being unable to pay a student loan or credit card (when nothing THAT bad will happen to you, being unable to pay HOA fees can make you lose your home.
Yes good point, was thinking the same thing HOAs do cost money and that would be a big reason NOT to commit to one. But, I am pretty sure if you don't pay your student loans they can garnish your wages, take your tax returns and embarrass you at your place of employment..I consider that pretty bad.
Your HOA dues should be factored into to your overall mortgage and viewed as part of your mortgage the day you sign, most people do it this way. If not then and they lose their home because they can't pay HOA dues and can pay their mortgage it's their fault really.
I think many of the problems with HOA's is we treat them as private organizations. WE should be honest about what they are, which is a government. We have effectively created a new level of government at a sub-city level. I know people disagree but look at a modern HOA.
1: When you move there you are automatically bound by the rules(laws)
2: Maintains streets(often) public pools/playgrounds (parks) community buildings (offices and rec centers)
3: You elect board members(lawmakers) who can make and change the rules(laws)
4: You must pay the annual amount assessed against you to support this organization and what they do (property taxes)
5: If you break the rules you can be ticketed and fined
6: If you fail to pay your fees(taxes) or fines your property can be confiscated.
It is a government. It needs to be regulated and treated as such. If people began to view it that way, and took it as seriously as they do their city government, people would be much more involved in their HOA, elections would be between candidates who would actively run, and have real differences, and platforms, and these outrages wouldn't happen. Also if it were regulated correctly as a government there would be more checks on them from the governmental levels above.
I agree they are essentially mini Governments of their own, but like I said earlier, think critically as to why they exist in the first place..Personally, I would prefer any organization privatized over Government run any day; and I don't think shifting any of these activities/functions from private to State would actually improve performance. What would help is a certain level of accountability for decisions being made and proper balance of power within the HOA structure. Popular vote for everything is usually a good start.
I am pretty sure if you don't pay your student loans they can garnish your wages, take your tax returns and embarrass you at your place of employment..I consider that pretty bad.
Your HOA dues should be factored into to your overall mortgage and viewed as part of your mortgage the day you sign, most people do it this way. If not then and they lose their home because they can't pay HOA dues and can pay their mortgage it's their fault really.
Student loans and other conventional loans are "backward looking debt". You borrowed money for the education. There is a principal balance, interest rate, term, which dictate the monthly payments and how many will have to be made. There is a sum certain that can be paid at any time that will result in elimination of the debt.
In contrast, HOA assessments are "forward looking". The homeowner did not incur debt, the HOA corporation incurred it. The homeowner has little control over the debt that the HOA racks up. The HOA seeks to pay for its debt by assessing the homeowners. There is no "principal balance" or term. As long as the HOA exists, it will continue to run up expenses. The HOA assessments are perpetual. Homeowners are burdened by a lien securing payment of future HOA assessments which last into perpetuity. There is no sum certain that the homeowner can pay to terminate the lien even though the debt has yet to be incurred. HOA assessments are more akin to illicit taxes by a corporation that has not been delegated governmental taxation authority.
A note on a house (or anything else) can eventually be paid off. HOA assessments are ever-increasing and never ending. HOA assessments are never "done". Comparing HOA assessments to a loan is a red herring and nothing more than misdirection.
Student loans and other conventional loans are "backward looking debt". You borrowed money for the education. There is a principal balance, interest rate, term, which dictate the monthly payments and how many will have to be made. There is a sum certain that can be paid at any time that will result in elimination of the debt.
In contrast, HOA assessments are "forward looking". The homeowner did not incur debt, the HOA corporation incurred it. The homeowner has little control over the debt that the HOA racks up. The HOA seeks to pay for its debt by assessing the homeowners. There is no "principal balance" or term. As long as the HOA exists, it will continue to run up expenses. The HOA assessments are perpetual. Homeowners are burdened by a lien securing payment of future HOA assessments which last into perpetuity. There is no sum certain that the homeowner can pay to terminate the lien even though the debt has yet to be incurred. HOA assessments are more akin to illicit taxes by a corporation that has not been delegated governmental taxation authority.
A note on a house (or anything else) can eventually be paid off. HOA assessments are ever-increasing and never ending. HOA assessments are never "done". Comparing HOA assessments to a loan is a red herring and nothing more than misdirection.
When I hear 'burdoned' and 'perpetuity' I smell lawyer. ..Good points, but I didn't make the comparison..But now that you mention this, what you are referring to would/should be mitigated under a properly managed reserve fund and if there were a proper budget planning tool in place and/or a reserve fund study or forecast was done then the risk to the homeowner going forward should not be of great concern.
HOA fees are more like a PROPERTY TAX than a LOAN. Property taxes can never be paid off. Property taxes are ever-increasing and never ending. Property taxes are never "done". The same applies to HOA fees.
If you fail to pay property taxes, you lose your house. If you fail to pay your HOA fees, you lose your house. If you can't afford one or both of those fees, you are to poor to own your style house and you need to get rid of it and move into something cheaper.
And if you don't want to pay HOA fees, the solution is simple - don't buy a home in a neighborhood that has an HOA.
It's not complicated.
Quote:
Originally Posted by IC_deLight
Student loans and other conventional loans are "backward looking debt". You borrowed money for the education. There is a principal balance, interest rate, term, which dictate the monthly payments and how many will have to be made. There is a sum certain that can be paid at any time that will result in elimination of the debt.
In contrast, HOA assessments are "forward looking". The homeowner did not incur debt, the HOA corporation incurred it. The homeowner has little control over the debt that the HOA racks up. The HOA seeks to pay for its debt by assessing the homeowners. There is no "principal balance" or term. As long as the HOA exists, it will continue to run up expenses. The HOA assessments are perpetual. Homeowners are burdened by a lien securing payment of future HOA assessments which last into perpetuity. There is no sum certain that the homeowner can pay to terminate the lien even though the debt has yet to be incurred. HOA assessments are more akin to illicit taxes by a corporation that has not been delegated governmental taxation authority.
A note on a house (or anything else) can eventually be paid off. HOA assessments are ever-increasing and never ending. HOA assessments are never "done". Comparing HOA assessments to a loan is a red herring and nothing more than misdirection.
I agree they are essentially mini Governments of their own, but like I said earlier, think critically as to why they exist in the first place.
1. As a liability shifting device for developers
2. As a liability shifting device for municipalities who tax without providing services
3. As a method utilized by municipalities to impose additional restraints and "ordinances" via "private" restrictive covenant that would never be legitimized as ordinances
4. As a control device for developer, HOA vendors, and/or a few elite homeowners who are inherently immune from the vagaries of the organization they control
5. To implement discrimination that legitimate government cannot engage in
Quote:
Originally Posted by skids929
Personally, I would prefer any organization privatized over Government run any day; and I don't think shifting any of these activities/functions from private to State would actually improve performance. What would help is a certain level of accountability for decisions being made and proper balance of power within the HOA structure. Popular vote for everything is usually a good start.
The privatization is the core problem. Because it is "private" and not a legitimate government, the HOA is not obligated to respect constitutional rights nor is it bound by governmental obligations or restraints - which is precisely what leads to the abuses by board members and vendors. The vendors monetarily profit from the abuse so since they are for-profit businesses you can expect that the abuses are going to occur.
There is already a pretty good model for governance in the form of the U.S. and State of Texas Constitutions. One should be extremely wary and opposed to any organization or those promoting organizations seeking to "govern" outside of the bounds of these documents. The flaws you point out are inherent in the existence of the HOA. However, the "flaws" were by design to benefit the drafter and other parties - not those who would be subject to the regime.
Last edited by IC_deLight; 06-23-2011 at 09:09 AM..
1. As a liability shifting device for developers
2. As a liability shifting device for municipalities
3. As a control device for developer and HOA vendors and a few elite homeowners who are inherently immune from the vagaries of the organization they control
The privatization is the core problem. Because it is "private" and not a legitimate government, the HOA is not obligated to respect constitutional rights nor is it bound by governmental obligations or restraints - which is precisely what leads to the abuses by board members and vendors.
There is already a pretty good model for governance in the form of the U.S. and State of Texas Constitutions. One should be extremely wary and opposed to any organization or those promoting organizations seeking to "govern" outside of the bounds of these documents. The flaws you point out are inherent in the existence of the HOA. However, the "flaws" were by design to benefit the drafter and other parties - not those who would be subject to the regime.
They are essentially a de facto level of Government, and the rules are generally consistent with statuatory rules..But I agree the Board members do get special treatment..Take for example if a Homeowner wants to sue they have to pay out of pocket, whereby a board member could be funded by the association insurance and usually not held liable for any judgements. Which goes to my earlier point of accountability..
Overall though, without getting into all the legal aspects, we're talking about neighborhoods often with Pools, tennis courts, large common areas, walking trails and buildings etc..I personally like the idea of conforming neighborhoods with (reasonable) rules that can be enforced if necessary. It's all in an effort to create a community that is representative of the same values. I see nothing wrong with that, other than that all these rules makes lawyers wealthier and generally serves best the people who can afford to continually pay attorneys.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
..Good points, but I didn't make the comparison..But now that you mention this, what you are referring to would/should be mitigated under a properly managed reserve fund and if there were a proper budget planning tool in place and/or a reserve fund study or forecast was done then the risk to the homeowner going forward should not be of great concern.
