HOA Fees On Property Lot Not In Use in VA (foreclosure, condominiums)

[vnssac]

Hello,
I'm wondering about a situation in which someone I know has purchased property (a lot) ten years ago in VA, never built a home and is under obligation to still pay HOA dues which are in the hundreds of dollars each quarter. While I FULLY understand contractual obligations and their ramifications, this situation is unique in that the property has lost nearly 90% of its original value, almost worthless at this point, valued by local realtor. The owner will sell it for that dramatic loss just to get out from the HOA fees. Ie. water, sewage, landscaping, utilities for a simply a vacant lot that has been untouched for ten years. Background, the original developer has sold twice, and it's a tremendous financial disaster to many. Has anyone dealt with anything like this before, know of any options, advice? It just seems crazy. Owners are retired, ultimately moved to another community, obviously to live, but need to be rid of this hefty financial (and nonsensical) burden. Many thanks for any insights legal or otherwise.

[cully]

Sounds like it's a buildable lot.

Sounds like your friend doesn't need to short sell it...sounds like it's paid for?

And the issue is just the HOA fee? If so, what has happened in his trying to sell the lot at rock bottom price? No takers?

If he stopped paying the fees, the HOA would probably put a lien against the lot.

[vnssac]

Yes definitely buildable. Yes, paid for. No takers, been on the market for 6 months but they haven't dropped the price to nothing. Yes, I imagine you're right, lien would apply.

[cully]

Sometimes that happens. If other lots are not selling and other already built homes are not selling the only thing to do is drop the price way down. Keep it mowed. Advertise in the surrounding big cities, even those out of state....that is if it would be worth those buyers' time to look, say, if the community is attractive, good for...what..fishing? retirement, etc... and just not well known outside the area.

[johnsonkk]

Where in Virginia has property, land property, dropped 90% in value?

[need4speed2012]

If its lost 90% of its original value, which is hard to believe, then sell it for whatever they can back to the association.

If not then yes, a lien will and should be placed on it and its the owners responsibility.

[IC_deLight]

Originally Posted by vnssac

Hello,
I'm wondering about a situation in which someone I know has purchased property (a lot) ten years ago in VA, never built a home and is under obligation to still pay HOA dues which are in the hundreds of dollars each quarter. While I FULLY understand contractual obligations and their ramifications, this situation is unique in that the property has lost nearly 90% of its original value, almost worthless at this point, valued by local realtor. The owner will sell it for that dramatic loss just to get out from the HOA fees. Ie. water, sewage, landscaping, utilities for a simply a vacant lot that has been untouched for ten years. Background, the original developer has sold twice, and it's a tremendous financial disaster to many. Has anyone dealt with anything like this before, know of any options, advice? It just seems crazy. Owners are retired, ultimately moved to another community, obviously to live, but need to be rid of this hefty financial (and nonsensical) burden. Many thanks for any insights legal or otherwise.

Property owners were not the intended beneficiaries of HOAs. HOAs don't preserve value for property owners.

Your friends have some problems due to the length of time this has been going on. The statute of limitations is likely to be a problem for a number of claims. Are these water, sewage, landscaping, and utilities fees specific to the lot or are they paying for property owned by the HOA corporation? Would water, sewage, etc. fees go up if they had a house there? In other words, why is the HOA corporation involved in water, sewage, landscaping, and other utilities for this lot? Is this really an HOA or is it set up legally as a condominium with site built units?

[TN Lily]

What is the name of the subdivision?
Your friends need to pay up or negotiate something with the HOA. Perhaps they could deed the lot to the HOA and call it even. If the HOA has been undertaking collection efforts for many years, the attorney's fees could exceed the lien. And the governing documents may make them liable for these fees too.

HOAs, though they are set up by the developer, exist to benefit the property owners. Folks who do not want to abide by the covenants, declaration, bylaws and other governing documents should not buy into this type of property ownership. There are many successful HOAs.

In the context of condominiums, in many jurisdictions, the owner of "phantom" units (unbuilt, but planned units under the governing documents) still owe assessments to the condo ass'n on these units.

The Community Associations Institute may provide some info: www.caionline.org. There are many websites devoted to the issues that arise with HOAs and condo associations.

Good luck to your friends in solving their problem.

[cully]

You say the owner wants to get out from the HOA fees. I took that to mean he's paying them. Is he? If not, the process in Virginia is the settlement office calls the HOA board/mgt co and verifies all fees, special assessments have been paid. If not, they are taken out at settlement.

You say your friends haven't dropped the price to nothing. Remind them the HOA fees are a very real monthly "price" to pay. So that alone a very real, tangible cost worth ending.

You say the owner will sell for that dramatic loss. He better get on it. I wonder if he's selling by owner. Some people will hold on to something until they get their price. In the meantime they lose so much they come out at a negative but it's an ego thing to still say they sold for that price.

BTW, are your friend's lot fees the same as if he had a house on the lot? Or are the fees much higher when a house is built? I'm aware of places where lots have fees much much lower.

[IC_deLight]

Originally Posted by TN Lily

What is the name of the subdivision?
Your friends need to pay up or negotiate something with the HOA. Perhaps they could deed the lot to the HOA and call it even. If the HOA has been undertaking collection efforts for many years, the attorney's fees could exceed the lien. And the governing documents may make them liable for these fees too.

HOAs, though they are set up by the developer, exist to benefit the property owners.

Not true. The property owners were not sitting at any table when the restrictive covenants were written up. The purpose of the HOA corporation was to shift liability to other property owners and control over non-developer owned properties to the developer. The developer is excused from paying assessments for its lots. The homeowners are forced to pay assessments to the developer controlled HOA corporation by virtue of owning a lot. The CCRs likely impose no obligation on the HOA corporation to the lot owners. The owners are simply expected to pay, pay, pay into perpetuity.

The CCRs are written to benefit the developer and its financier, local government, and HOA vendors. Property owners are not the intended beneficiaries - they are the prey.

Originally Posted by TN Lily

Folks who do not want to abide by the covenants, declaration, bylaws and other governing documents should not buy into this type of property ownership. There are many successful HOAs.

Perhaps you should identify non-HOA property in the area. The choice isn't whether there is an HOA but rather which HOA the property owners are burdened with. Try to define "successful" HOA. The poster fails to mention that the "terms" can be changed unilaterally without your vote or consent. Moreover, this argument absurdly ignores the substance of these documents.

Originally Posted by TN Lily

The Community Associations Institute may provide some info: www.caionline.org. There are many websites devoted to the issues that arise with HOAs and condo associations.

CAI is a trade lobby group for HOA management companies and HOA attorneys. Their business practices are one of the reasons there are so many problems with HOAs across the nation. Its members goal is to leave homeowners as "soft targets" and CAI is active at legislatures throughout the country pursuing that objective.

CAI promotes:
• using "aesthetics" to justify unlimited authority for HOAs (and therefore the management companies),
• unlimited assessment increases,
• foreclosure powers,
• monopolies on utilities and video services,
• entanglement of assessments with "fines" and management company junk fees,
• elimination of application of the federal Fair Debt Collection Practices Act to HOA vendors,
• removing any federal, state, or local government limitations on the actions or conduct of HOAs.

CAI does not represent the interests of property owners burdened by HOAs but rather the HOA managers and HOA attorneys who are members of CAI.