Do foreclosures from non payment of HOA dues really happen?

Here's one I found awhile back when researching the issue.

It's somewhere in South Florida though not Ca.

http://www.ccfj.net/WPEC12Newsforecl.html

Since most HOA's receive little or no money from a foreclosure action, most will wait until the lender forecloses. This is the D-S Statute on foreclosures:

Civil Code §1367.4. Limitations on Foreclosure.

(a) Notwithstanding any law or any provisions of the governing documents to the contrary, this section shall apply to debts for assessments that arise on and after January 1, 2006.

(b) An association that seeks to collect delinquent regular or special assessments of an amount less than one thousand eight hundred dollars ($1,800), not including any accelerated assessments, late charges, fees and costs of collection, attorney's fees, or interest, may not collect that debt through judicial or nonjudicial foreclosure, but may attempt to collect or secure that debt in any of the following ways:

(1) By a civil action in small claims court, pursuant to Chapter 5.5 (commencing with Section 116.110) of Title 1 of the Code of Civil Procedure. An association that chooses to proceed by an action in small claims court, and prevails, may enforce the judgment as permitted under Article 8 (commencing with Section 116.810) of Title 1 of the Code of Civil Procedure. The amount that may be recovered in small claims court to collect upon a debt for delinquent assessments may not exceed the jurisdictional limits of the small claims court and shall be the sum of the following:

(A) The amount owed as of the date of filing the complaint in the small claims court proceeding.

(B) In the discretion of the court, an additional amount to that described in subparagraph (A) equal to the amount owed for the period from the date the complaint is filed until satisfaction of the judgment, which total amount may include accruing unpaid assessments and any reasonable late charges, fees and costs of collection, attorney's fees, and interest, up to the jurisdictional limits of the small claims court.

(2) By recording a lien on the owner's separate interest upon which the association may not foreclose until the amount of the delinquent assessments secured by the lien, exclusive of any accelerated assessments, late charges, fees and costs of collection, attorney's fees, or interest, equals or exceeds one thousand eight hundred dollars ($1,800) or the assessments are more than 12 months delinquent. An association that chooses to record a lien under these provisions, prior to recording the lien, shall offer the owner and, if so requested by the owner, participate in dispute resolution as set forth in Article 5 (commencing with Section 1368.810) of Chapter 4.

(3) Any other manner provided by law, except for judicial or nonjudicial foreclosure.

(c) An association that seeks to collect delinquent regular or special assessments of an amount of one thousand eight hundred dollars ($1,800) or more, not including any accelerated assessments, late charges, fees and costs of collection, attorney's fees, or interest, or any assessments that are more than 12 months delinquent, may use judicial or nonjudicial foreclosure subject to the following conditions:

(1) Prior to initiating a foreclosure on an owner's separate interest, the association shall offer the owner and, if so requested by the owner, participate in dispute resolution pursuant to the association's "meet and confer" program required in Article 5 (commencing with Section 1363.810) of Chapter 4 or alternative dispute resolution as set forth in Article 2 (commencing with Section 1369.510) of Chapter 7. The decision to pursue dispute resolution or a particular type of alternative dispute resolution shall be the choice of the owner, except that binding arbitration shall not be available if the association intends to initiate a judicial foreclosure.

(2) The decision to initiate foreclosure of a lien for delinquent assessments that has been validly recorded shall be made only by the board of directors of the association and may not be delegated to an agent of the association. The board shall approve the decision by a majority vote of the board members in an executive session. The board shall record the vote in the minutes of the next meeting of the board open to all members. The board shall maintain the confidentiality of the owner or owners of the separate interest by identifying the matter in the minutes by the parcel number of the property, rather than the name of the owner or owners. A board vote to approve foreclosure of a lien shall take place at least 30 days prior to any public sale.

(3) The board shall provide notice by personal service to an owner of a separate interest who occupies the separate interest or to the owner's legal representative, if the board votes to foreclose upon the separate interest. The board shall provide written notice to an owner of a separate interest who does not occupy the separate interest by first-class mail, postage prepaid, at the most current address shown on the books of the association. In the absence of written notification by the owner to the association, the address of the owner's separate interest may be treated as the owner's mailing address.

(4) A nonjudicial foreclosure by an association to collect upon a debt for delinquent assessments shall be subject to a right of redemption. The redemption period within which the separate interest may be redeemed from a foreclosure sale under this paragraph ends 90 days after the sale.

(d) The limitation on foreclosure of assessment liens for amounts under the stated minimum in this section does not apply to assessments owed by owners of separate interests in timeshare estates, as defined in subdivision (x) of Section 11112 of the Business and Professions Code, or to assessments owed by developers.

In Georgia the Property Owners Association Act (POAA) makes it easier for an association to foreclose on deadbeat members. We can foreclose with the first mortgage in place so long as the debt exceeds $2,000. Our policy is to obtain a judgement including the option of foreclosure as soon as the debt reaches $2,000. With that leverage we usually get the homeowner to pay up.

Kelly,

You are right on the mark as to the uncertainty in foreclosing with a superior loan in place. The reason an HOA may want to do this is (1) it might encourage the homeowner to settle up to stop the foreclosure if there is equity in the property, and (2) to "stop the bleeding" by getting a deadbeat homeowner to move out of the neighborhood if there is no equity. In the case where the HOA forecloses on a property that is under water, the bank will then foreclose out from under the HOA and the HOA will be rid of the problem. At no time will the HOA be responsible for payments on the loan that they inherited. The HOA's exposure is only the attorney's fees for the judgment, foreclosure, and other services.

Not anymore baby. Check this out. Lending banks are now being held accountable for the trap they set, borrowing money they didn't themselves have, while using loose and illegal practices in the process. The MASSIVE lawsuit against Wells Fargo / Wachovia, Indymac / OneWest bank, Citibank, Bank of America, JP Morgan Chase, GMAC..............can actually, not only put a stop to your foreclosure, but also pause your house payments with no loss to you............
***SPAM LINK REMOVED ***

Tim,

The post was spam attempting to sell some product by a poster with only the one post. I have reported it to the Support team.

I just know that I found out here in California that past debts can not be used to cause foreclosure, but rather be added to a lien on the property. THe guy who lives below me owes the better part of 15k in past dues.. nothing, nothing can be done. Except pushing a lein on his property..

Here's a "fresh one" from today's paper:

http://www.sun-sentinel.com/business/realestate/condos/fl-foreclosure-purchases-condocol-01120110111,0,5530901.column

Kelly,

There may be an option short of foreclosure. In Georgia if you get a judgment against the debtor in court, then you can follow up with a fieri facias that targets "the goods and chattels" of the defendant. At this point the HOA can garnish wages, attach bank accounts, or even have the sheriff take possession of their 50 inch TV. It's a more appropriate response to overdue assessments.

In florida they do. Our HOA has done it and now rents the homes to re-coup funds.

Kelly

As of now, we don't have a solid exit strategy, as we don't anticipate being in any sort of profit making position for a long time.

Unfortunately for us, many of these people are at least $15,000 (or more) in arrears. By the time we repay legal fees, the commission on the rental of the property, the insurance and whatever repairs we had to do for the home to get it ready and then back assessments, we hope the bank will have taken over by then.

If it came to a point where we would be in a profit position, I would just assume we would stop renting the property at that point (we would assess our position every time we were to renew a lease)

Khalid,

When a homeowner works out a payment plan it usually stops all collection activity -- so long as the homeowner continues to abide by the terms of the payment agreement.

After the HOA gets a judgement against a homeowner the opportunity to work out a payment plan or dispute the charges is usually lost. It is in every one's best interest to negotiate some accommodation as early as possible.

Khalid,

I sympathize with your situation. I am sorry that things have gotten to this point.

It sounds like there has been a serious breakdown in understanding the nature of an HOA.

Whether or not other homeowners like your house color makes no difference -- it is the Architectural Control Committee, or similar group, that makes an official determination about what color you can paint your house.

The time to talk to the HOA about a payment plan for your dues is before you get behind in your payments, not after things have gotten all the way to the court.

Being a member of an HOA can have great benefits, but can also lead to serious problems if you are on the wrong side of the obligations of each member.

You should reach out to the HOA board and work out an arrangement. You should contact the board directly and not rely on going through other homeowners. The key will be to acknowledge your mistakes up to now and pledge compliance with all rules in the future. I hope that things work out for you.