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It is unbelievable. The HOA's in NC are completely unchecked. Some operate within the intent of what an HOA was meant to be but many do not. I own a home in Highland Creek in Charlotte and the HOA is completely out of control. Our State legislature hasn't provided any real protections.
That's not the first time I've heard that about their HOA. Two people that work for DH live there and said the exact same thing.
No it doesn't mean that. See my post above. The winner of the foreclosure auction will be the new owner. The proceeds from this auction is used to pay back the hoa.
Actually....most of the time the HOA receives little or no money. First the bank is paid, then the taxes are paid, lastly if anything is left it goes to the HOA. Most times however there is nothing left because the homeowners have defaulted on their mortgages and taxes already.
As for HOA's being unchecked...you need to read your by laws before you move into a community. I do not feel it is unreasonable for an HOA to try to collect money owed to them. Why should everyone else in the community have to pay for your services because you do not pay. The HOA has a fiduciary responsibility .
Actually....most of the time the HOA receives little or no money. First the bank is paid, then the taxes are paid, lastly if anything is left it goes to the HOA. Most times however there is nothing left because the homeowners have defaulted on their mortgages and taxes already.
As for HOA's being unchecked...you need to read your by laws before you move into a community. I do not feel it is unreasonable for an HOA to try to collect money owed to them. Why should everyone else in the community have to pay for your services because you do not pay. The HOA has a fiduciary responsibility .
Yes - they absolutely have a fiduciary responsibility. One of the primary stated objectives of most HOA's is preservation of homeowners home values. How is foreclosing over a few hundred $'s in line with that objective? That lowers the value of homes surrounding the foreclosed property. Surely if the outstanding debt was in the $1000's then it would be more reasonable. See there's a balance.
Generally when these are pursued for minor debt the problem isn't with the assesments it's with the attorney's fees that are charged with that collection. The attorneys literally make a fortune off of these practices. Collecting $1200 fees on a $375 debt is obscene. That's the real problem. But the HOA initiating the process over minor debt is also disturbing. If there was a chronic problem within the community that threatened it's financial solvency then it would be understandable.
Catrick, please understand...no problem...I just happen to know a LOT about HOAs.
HATE them. Search my previous posts to hear the whole, sordid story. I think that they should be banned. I agree with Kabe, they are largely unchecked.
Foreclosing (especially in this market) is just plain stupid. They are killing themselves by reducing their own property values....for under $1k.
No, just pay the bills that you've agreed to pay and you won't have to worry about it!
Exactly!
Jeez, this stuff is not difficult. We're all competent adults here aren't we? Whether its a credit card or a mortgage, or HOA dues, you know you have to pay it! If you don't, or delay the payment, there will be fines and or serious penalties, what did you think would happen?
Ignorance is no excuse especially in this situation....
Another person deflecting personal responsibility.......
Catrick, please understand...no problem...I just happen to know a LOT about HOAs.
HATE them. Search my previous posts to hear the whole, sordid story. I think that they should be banned. I agree with Kabe, they are largely unchecked.
Foreclosing (especially in this market) is just plain stupid. They are killing themselves by reducing their own property values....for under $1k.
Thanks
We are lucky ours is decent. Small, about 198 homes but 18 lots still open because the builder went bankrupt. I do thank God we have an hoa with the empty lots so the development will not "change" with any new builder coming in. We changed our covenants to cover that. When we bought the house, the hoa was still run by the management company so we were just hoping we would be lucky. The sales rep here was great, young and not pushy and we picked her brain about the residents as she was here from the beginning. She was on target.
And until the state gets a grip on the hoas they will run amok. I lived in Florida when all the condos went up and they started the condo associations. They were horrific. Constant nasty court battles until the state stepped in with some pretty good laws governing them. When hoas came along they were included under those laws. So I had some experience with them and our last home in Florida was an hoa so we knew what to look for. There and here we are involved so that helps. Like I said we are lucky. Most aren't. They can become nightmares.
When we were signing the papers for the house, the attorney saw we were from Florida and was asking a lot of questions about hoas and the laws there. He was thinking of switching to that area of law since it was new and growing here. Wonder if he did.........
HOA's have the power of government, the power to abuse and dictate how ever the pinheads running it see fit without the checks and balances that other government must abide by, such as city and county governments.
Sorry, but people are fools to put themselves under the tyranny of these rogue mini-governments. Is your HOA benign today, can you say with certainty that it will be benign in 5 years or will it have gone rogue?
It is unbelievable. The HOA's in NC are completely unchecked. Some operate within the intent of what an HOA was meant to be but many do not. I own a home in Highland Creek in Charlotte and the HOA is completely out of control. Our State legislature hasn't provided any real protections.
The real beneficiaries of the HOA excessive powers are the attorneys. Sellers Hinshaw is a law firm in Charlotte that profits substantially from the current laws. In fact one of their founders, Tim Sellers, sat on the citizen drafting committee for the Planned Community Act (PCA). The firm had recently lost a case in the NC Appelates Court that limited their fee's to 15% of the outstanding debt. Of course he made sure that the PCA included language, albeit it vague, that allows attorneys to charge substanitally more for minor debts and not be subjected to the 15% statute. Crazy to believe but HOA's can foreclose over any amount of outstanding debt - even $1. There is no recourse to dispute attorney's fees as disputing them incurs additional fees and triggers a clause in the PCA that allows attorneys to charge more than $1200 regardless of debt being collected. HOA's won't allow payment for past dues without concurrently paying the attorney's fees. BTW - the HOA's do not incur the cost of the attorney's fees. So it's not like it's a reimbursement of fees paid. This truly is a racket for the attorneys and there are no worse offenders in the Charlotte area than Sellers Hinshaw.
Kabe totally hit the nail on the head. This is exactly what this is: lawyers and property management companies got together and decided to make a killing in a unregulated environment. I certainly wouldn't mind paying all overdue amount plus interest plus any late fees. But to be slapped with a $750 attorney fee is outrageous !! This is where the 'pradatory' part comes in. There has to be some regulations to stop this type of practice.
Jeez, this stuff is not difficult. We're all competent adults here aren't we? Whether its a credit card or a mortgage, or HOA dues, you know you have to pay it! If you don't, or delay the payment, there will be fines and or serious penalties, what did you think would happen?
Ignorance is no excuse especially in this situation....
Another person deflecting personal responsibility.......
Generally I agree but there are circumstances that arise where a "community" should recognize that and use discretion, which IS specifically allowed by the Planned Community Act (PCA) but often not exercised by HOA's. There are times that responsible people find themselves in unfortunate circumstances. Expecting your HOA to be reasonable during those times - to a degree obviously - is an expectation that I believe is warranted. The whole concept of a "community" revolves around protecting each other whether it is home values, security, voting strength etc. Foreclosing on minor debt and allowing attorneys to charge $1000's to collect a few hundred $'s (and this is NOT an exagerration) is obscene.
Your statement is finite and the reality is that most situations are not finite. They are all unique with specific variables that should be considered by your "neighbors" that run the HOA.
Actually....most of the time the HOA receives little or no money. First the bank is paid, then the taxes are paid, lastly if anything is left it goes to the HOA. Most times however there is nothing left because the homeowners have defaulted on their mortgages and taxes already.
The proceeds come from what the high bidder at the auction is willing to pay. High bidder will be bidding against the bank who will come to this auction and bid everything owed on the property to protect their interests. If there are no other bids the bank gets the property back and the money they bid minus expenses.
You are correct the proceeds are used to pay in this order, court expenses related to auction costs, taxes owed, balance on mortgage, HOA fees covered by this law, then remainder is divided up amongst anyone else with a claim against this property. If there is no one else, the court gets it. Whether the HOA gets their outstanding fees or not depends on the results of the auction.
However, the new owner, is now bound by the HOA and must start paying the dues to the HOA. The end result is the HOA no longer has deliquent owner to deal with. Again I state that if this was a mistake, then it is in the interests of the owner to get ahold of this HOA and deal with them to end the foreclosure or head to court to stop it. When this doesn't happen, then the HOA is probably justified in the foreclosure. The owner still has a number of opportunities to stop a foreclosure, as I noted above, and if they don't make this effort, then they probably have decided not to pay their obligations anyway. The HOA does have an absolute duty to collect these dues and this is the only legal means available when the owner doesn't want to do it. A property that is actually foreclosed by this method, given the safeguards built in, really means that an owner is derelict and probably good for the neighborhood to be gotten rid of.
There is usually a clause in the mortgage that says if the owner doesn't pay these dues, the bank will and will foreclose themselves. So if the HOA doesn't do it, eventually the bank will do it for them.
Last edited by lumbollo; 08-14-2009 at 07:08 AM..
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