New Board does not want to pursue collection

1) Member has always been late, has quit paying dues owes approx. $2,000 including attorney fees for collections, etc….
2) Old Board pursued collection by notices, then turned over to attorney for collection and foreclosure (last day for member to respond 10/21/10)
3) No response from member/homeowner who is “judgment proof” (attorney’s words)
4) Member/homeowner has been delinquent on mtge/lender started foreclosure once never completed
5) Utility services – electric, water, sewer, trash have all been delinquent and/or have at some time been disconnected.
6) Member has several personal judgments against in excess of $15,000

New board (one of whom hasn’t even read the CCR’s or by-laws) believes the HOA should not foreclose and work with this member/homeowner. Note this has been going on for 3 years with this member/homeowner. The HOA tried to settle when it was at $580.00 and member refused. This person does not work, but can go down to the bar every night (we can see bar from our subdivision) but cannot pay her dues and bills.

I for one am tired of paying for this person to live in the subdivision for free!

How do we the rest of the members – try to convince the board to pursue? Don't they have a fiduciary responsibility to do so??

Yes, the board does have a fiduciary responsibility, but does not mean heading to court for everything. That means running a cost/benefit analysis and making a reasoned decision. Our attorney used to tell us that the board should always foreclose as soon as possible because they had a 90% success rate at getting owners to comply before it went anywhere. Well five years later and they had gone 1 for 7 with us while costing the association over $10,000 in legal fees we could never recover. So we gave up on their "always foreclose" advise and started taking a really hard look at the owner's full situation before deciding. We looked for things like other judgments, delinquent tax liens, etc.

The person is already up to their eyeballs in debt and is probably working "under the table" to get their bar money so on paper they're not going to have anything. Once they get to the point of a sheriff's sale they might even file for bankruptcy and then withdraw that 90% through giving them more years to stay.

If the lender started foreclosure and stopped there's a reason for that. More than likely they realized that the person has no equity in the property and it was going to cost them a huge bundle of cash just to clear the books. If the bank won't touch the guy, what makes you think that a non-profit association would have any luck? If I was in an association that's just getting by (and what association isn't?) I'd be pretty upset if we dumped multiple thousands of dollars at a problem that may not go away for four or more years. Even if you file for foreclosure the lender still gets first dibs on any equity of which there is probably none.

As for making the board pursue, good luck. Collections matters are almost always considered to be attorney/client because they concern potential litigation. There's likely a good reason why they aren't pursuing it at this time but unfortunately since it's a legal matter they probably can't tell everyone why. Definitely frustrating for all involved.

If this person is judgement proof, that usually means he's low income, (SS, SSI,) so there's just no way to get fines out of him and no court will take a person's house away because of fines. Is he elderly? disabled?

Drop all fines and get a meeting with this guy or his agent. Figure out a budget that he can meet, even if it's 425 per month.

P.S. The lender started foreclosure and the comment on the foreclosure site was "payment arrangements made".

Interesting...... something to ponder......

Now that the baby boomers are getting older, and just starting to retire, the future of home owners associations would could be very difficult. When most of the population is on SS or SSI and seniors will not care about their credit reports, what will happen to Home Associations?

Having a property in a home owners association will be the kiss of death for young buyers. They will pay all the fees, and the seniors will get all the benefits.

Mary, you failed to see my point. Your personal feelings got in the way of putting this issue into perspective and thinking about the future.

Yes, I do think "today's" seniors pay their bills. But that doesn't mean tomorrow's generation of seniors will, especially if they don't have to. Hate to break it to you, but the economy runs around the baby boomers. This could be huge.

To both Steve and Mary - this person is actually 42 years old.

Karen,

Probably the child of a baby boomer! This is the generation who wants everything NOW and doesn't care if they have the money to pay for it or not.

Take whatever steps are available to you to collect the delinquent assessments. If you're able to foreclose to collect fines, so be it. Or what about garnishment of wages?

When people don't want to do anything to help themselves then why should anyone else worry about helping them?