What happens if I refuse to pay my HOA?

[cittic10]

Originally Posted by Maximus39

I understand and agree with the concept of an HOA, but most HOA's actually, you know... do stuff. Beyond paying the electric bill for our (rather sparsely placed) streetlights, and some extremely minimal lawn maintenance in a couple of small common areas, they don't do jack sh*t. The streets (and streetlights) are maintained & repaired by City of OKC. Every home takes care of their own yards, etc. If my HOA actually provided some kind of services I wouldn't be so pissed off right now.

+++ Have you asked your association for either a copy of the budget or a list of check disbursements?
As a member you are entitled to this information and it could shed some light on many of the expenses you may not be aware exist.

I will give you some of the expenses you haven't thought of (from our association here in GA...)

Accounting (Someone has to keep the books and file the tax returns)
Electricity (chances are your association has an electric account, if for nothing else, to power an irrigation timer or to light your sign in the front or something like that). The power companies normally charge a base charge whether or not you use any power. That can add up to a few hundred per year depending...)
Insurance (Our association-100 homes- pays over a thousand bux a year just for basic directors and officers insurance and liability)
Landscaping (money is budgeted to do landscaping projects. They aren't done every year but we save up to do the projects every several years)
Lawn Mowing (this you are aware of)
Lawn Chemicals (we pay $1,250 a year just for lawn chemicals Bermudagrass)
Legal Services (We have a lawyer on retainer and we have many expenses from chasing down the deadbeats . Going after people that don't pay costs thousands and everyone else foots the bill for that. By the way, we also make available a list of homes that haven't paid to anyone who requests it)
Maintenance . (stuff breaks)
Management (we don't use a management company any more as volunteers in our community do this and we also have a law firm that does stuff but the management company does do a lot and they also cost a lot. Back when we had one, they charged us $8/mo per home. So that was $800 a month for us)
Meetings / Rental Fees (There are expenses for doing the meetings)
Office Supplies
Postage (costs hundreds a year just to send out a few mailings)
Social ( we budget to do a community cookout, holiday decorations etc)
Taxes & Legal Fees (Don't forget property taxes on the common area and income taxes!!!)
Water (Even if you don't use it, there's still that base charge. It adds up)
We also have a rainy day fund. We set aside a couple grand each year for that.

We don't have a pool or tennis court.

So why are the dues so high when there's so few amenities???

BECAUSE.... there's a lot of people who don't pay.


What happens when you don't pay????

Everyone else picks up the tab for YOU.
It becomes more expensive for everyone else because THEY are paying YOUR share of the expenses.

And like I said, it is not confidential. Anyone can request the list of deadbeats.

Pay your dues.
It's not fair to your neighbors and If you don't pay and it goes to court, your $150 dues will become $3 or 4 THOUSAND dollars and you will LOSE.

"They don't do squat" is not a defense that will stand up in court. We've sued dozens of people and we always win. It is always a disaster for those who don't pay.

Originally Posted by Maximus39

Now there's some good advice - and yes I plan to do just that. Do neighborhoods ever get fed up and collectively fire their HOA? Can you "shop around" for another HOA provider?

This question should be answered in your covenants and bylaws. Why don't you read those documents? If you bother to find out where the money is going and why the dues are so high, you'll find out the HOA is not the enemy. Chances are it's the delinquent accounts that are the enemy.

[Dale Cooper]

Originally Posted by westernkansas

I personally don't understand why anyone would want to live in a HOA. It would be like saying to the government " hey I don't mind at all that every aspect of my life is controlled by an agency"

Finally, someone said it.

I agree 100%.

[skelaki]

Originally Posted by Maximus39

I've got a rental property in a small housing addition in OKC where the homeowners are responsible for all lawn maintenance and the only "common area" is a very small park with a handful of playground eqpt. And that's pretty much it. Beyond the tiny park I can see no evidence of any services my HOA provides. Oh, and they pay the electric bill for about 30 small streetlights in the neighborhood (these are the miniature kind - about 12-15ft tall, not the full size streetlights you normally see around town).

My HOA is demanding $150/year from every home for their services, which means they're raking in at least $75-$100k per year from this edition. I know damn well it's only costing them a tiny fraction of that amount to pay the electric bill for 30 small streetlights and maintain a tiny park with a couple of swing sets. There's very little lawn and landscaping work they do.

Apparently I'm in the wrong business! It seems HOA's can charge you whatever the hell they want, give you nothing for it, and still expect to be paid because you have no alternative.

So my question is what happens if I simply refuse to pay my HOA dues? What can they do to me? I certainly wouldn't miss their "services" that much I'm sure of...

They could put a lien on the home and eventually own it for whatever you owe. Is $150/year worth losing the home and ruining your credit over?

[Velvet Jones]

Originally Posted by Maximus39

I've got a rental property in a small housing addition in OKC where the homeowners are responsible for all lawn maintenance and the only "common area" is a very small park with a handful of playground eqpt. And that's pretty much it. Beyond the tiny park I can see no evidence of any services my HOA provides. Oh, and they pay the electric bill for about 30 small streetlights in the neighborhood (these are the miniature kind - about 12-15ft tall, not the full size streetlights you normally see around town).

My HOA is demanding $150/year from every home for their services, which means they're raking in at least $75-$100k per year from this edition. I know damn well it's only costing them a tiny fraction of that amount to pay the electric bill for 30 small streetlights and maintain a tiny park with a couple of swing sets. There's very little lawn and landscaping work they do.

Apparently I'm in the wrong business! It seems HOA's can charge you whatever the hell they want, give you nothing for it, and still expect to be paid because you have no alternative.

So my question is what happens if I simply refuse to pay my HOA dues? What can they do to me? I certainly wouldn't miss their "services" that much I'm sure of...

Trust me, pay now or you will really pay later. That said, the HOA is required to provide a budget every year of expenditures and balances. If something looks out of whack then take it up at the next HOA meeting. These meetings are also required and must be open to members. I know our HOA initially was being taken to the cleaners by the weasel management company that was hired by the developer. $4500 of our $6000 budget was being taken by the management company. Not exactly a good return on our investment. Still, your HOA's income sounds out of line with legitimate expenses. Unless you had something like community owned streets I would be highly suspicious of maleficence by your board.

[SeaninID]

Ok, there's a lot of misinformation here. First let's talk about what they can't do. The HOA cannot initiate forclosure actions against you. Only the lender can do that, and only for failing to pay your mortgage as outlined in the deed of trust you sign when you close on a house.

In theory, the HOA can attempt to place a lien against your home...just as anyone whom you owe a significant amount of money can do. However the amount owed would have to be significant (i.e. failure to pay for 2 or 3 years at $150 per year is still in the small claims court arena and it would be difficult to place a lien against your home for such a small amount). The process varies from state to state, but it would be not be automatic, or necessarily easy, for them to do this. Even with a lien against your home, they can't "take" your home. Assuming that you're making your mortgage payments, that lien would have to be satisfied before you could transfer the title (i.e. when you sent to sell the house).

The can assess you fees (often erroneously refered to as "fines"--HOAs do not have the authority to levy a fine against you, but they sure can charge fees). Your agreement probably states that they can pass along their legal fees incurred in attempting to collect your debt to you...and that can add up quick.

All that being said...$150 per year is quite low...and I think you're looking at it backwards. Your $150 gives you the right to become an active participant in the Association. Go to the meetings. Read the covenants. Find out where the money goes...and if you still feel it's being wasted..do something about it! Your $150 buys you the right to be heard.

[IC_deLight]

Originally Posted by SeaninID

Ok, there's a lot of misinformation here. First let's talk about what they can't do. The HOA cannot initiate forclosure actions against you. Only the lender can do that, and only for failing to pay your mortgage as outlined in the deed of trust you sign when you close on a house.

What are you trying to do, mislead purchasers of HOA-burdened property?
HOA-burdened property has perpetual liens that can never be paid off. "Your" home is collateral for whatever debt the HOA corporation racks up. I'm not aware of any state where the HOA corporation can't foreclose. Not saying that is proper but it is the current state of the law. Doesn't matter if you own your home outright or whether the house is also collateral for another loan such as a purchase money loan.

In case you missed it there is an entire industry of HOA management companies and HOA attorneys whose objective is entangling HOA assessments with junk fees for these vendors. They then use the threat of foreclosure to extract large sums of money from the homeowners. Who are you kidding? HOA vendors threaten foreclosure and actually foreclose all the time.

In theory, the HOA can attempt to place a lien against your home...just as anyone whom you owe a significant amount of money can do. However the amount owed would have to be significant (i.e. failure to pay for 2 or 3 years at $150 per year is still in the small claims court arena and it would be difficult to place a lien against your home for such a small amount). The process varies from state to state, but it would be not be automatic, or necessarily easy, for them to do this. Even with a lien against your home, they can't "take" your home. Assuming that you're making your mortgage payments, that lien would have to be satisfied before you could transfer the title (i.e. when you sent to sell the house).

Incorrect. The "lien" is deemed to have been on the property when you purchased it. The "lien" is set forth in the restrictive covenants. Depending upon what state you are in the lien will either be junior to a Lender's lien or the HOA lien might have "super priority" for say six months. In the first case, the HOA forecloses on the homeowner, then the Lender can foreclose too because the HOA's lien was junior to the Lender's. In the latter case, the Lender can still foreclose on the HOA, however, the lender will have to pay six months (or whatever the time limit is on the super priority) worth of assessments.


[quote]The can assess you fees (often erroneously refered to as "fines"--HOAs do not have the authority to levy a fine against you, but they sure can charge fees). Your agreement probably states that they can pass along their legal fees incurred in attempting to collect your debt to you...and that can add up quick.[/QUOTES]

There is no doubt that private corporation should not have any legal authority to impose "fines". However, in some states not only are "fines" secured by the house - all payments made to the HOA corporation get paid to fines before they get paid to "assessments". In other states, payments must first be applied to assessments. In yet other states, the industry folks advise the HOA corporation board to adopt "resolutions" that divert payments to the vendors before being applied to the assessments. This is known as the "priority of payment" scam and enables HOA management companies and HOA attorneys to extort large sums of money from the homeowner using the HOA's foreclosure power. Since the HOA attorney and HOA management company can unilaterally dictate how much you should pay them, the $150 is a fraction of the actual cost of owning HOA-burdened property. Moreover, the $150 does not describe the full liability associated with HOA-burdened property.

All that being said...$150 per year is quite low...and I think you're looking at it backwards. Your $150 gives you the right to become an active participant in the Association. Go to the meetings. Read the covenants. Find out where the money goes...and if you still feel it's being wasted..do something about it! Your $150 buys you the right to be heard.

Ha, ha, ha, ha. "Active participant". In most states there is no right to vote, no right to open meetings, no right to open records of the Corporation. ("association" is a misnomer. In fact the word "association" is used as a marketing gimmick. The HOA corporation is not the same thing as the homeowners at all)This allows for rampant embezzlement and fraud as evidenced by frequent news stories. $150 is far too much when the HOA corporation provides nothing of value.

[WeBuyHousesOKC]

The HOA will attach a lien to your house and may tack on penalties and interest. This means when you go to sell the house, you will have to pay the lien off before it will be released. Also, if there is enough equity in the house, in extreme measures, they could foreclose on the house. But that is very rare, at least in Oklahoma. Happens all the time in Florida with condo dues.

[francis scott]

your HOA is normally composed of residents that VOLUNTEER their time. They oversee and ensure that the management company does it's job properly and ensure that dues are spent/invested effectively to benefit the community. They work as liaisons between the management company and the community. HOA's manage parks, medians, sprinklers, lights, work with MUD and city organizations to ensure that the property values for residents are maintained and increased. Dues may also be spent on additional police patrols or private security. HOA dues normally depend on the size of the subdivision and socioeconomics of the area. As a Realtor in Texas I have seen them run from $150.00/yr to $1,800.00/yr+. Condo's can run considerably more $200-$400 /mo on average.

Homeowners' associations can be your best friend when they prevent your neighbor from painting her house neon pink, but your worst enemy when they expect you to perform expensive maintenance on your home that you don't think is necessary, or impose rules that you find too restrictive. The money you spend on your HOA is public and should be available online or you can request an accounting.

[pwrdbym]

I think you'd be surprised as to what the HOA actually has to pay for. They pay the water bill for sprinklers, a lawn contract for mowing, weeding and plants. The electric bill for street lights and sprinkler pumps. They have to have liability insurance for the common areas and they likely pay a company to do invoicing and billing. They have to save money to make any improvements to the common areas or play sets.

Your HOA must supply you with a financial statement upon request. If you have questions as to where your money is going simply contact them and request it. I think you'll find that they don't have much money left over.

If you don't pay they will charge you late fees and interest as well as place a lien on your home. Upon selling that lien will have to be cleared so I would advise you to pay up now.

And don't forget, the HOA board members are your neighbors. They have jobs, kids and responsibilities just like you, only they volunteer their extra time. If you don't like how things are going in your neighborhood, then go to a meeting and ask how you can help. It will be much appreciated.

[RozBuysHomes]

The HOA can file a lien against your property. Once the lien is filed, they can then file suit to foreclose on you if they deem fit.