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Help! What does this mean?

Started by MonicaJ2 • 14 replies • 2082 views

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MonicaJ2 (Nevada)
Posts: 1
Posted:
Prohibited Foreclosure. The Association may not foreclose a lien by sale for the
assessment of a fine for a violation of the Declaration, Bylaws, rules or regulations
of the Association, unless the violation is of a type that threatens the health, safety
or welfare of the residents of the Community.
RobW (California)
Posts: 279
Posted:
Well, let's see...

Prohibited Foreclosure. The Association may not foreclose a lien by sale for the assessment of a fine for a violation of the Declaration, Bylaws, rules or regulations of the Association...

That means that in general, your Association may not foreclose on a unit if the owner of the unit has failed to pay a fine levied for breaking any of the Association's governing documents. You can put a lien on the property for failure to pay the fine, but you can't foreclose to collect it. Instead, you would have to wait until the unit is sold, at which time the lien gets paid.

This next part is the exception:

...unless the violation is of a type that threatens the health, safety or welfare of the residents of the Community.

So, ordinarily your Association can't foreclose on a lien levied for fines, unless the violation threatens the health, safety or welfare of the residents. Proving it would be the tricky part.

Rob

RogerB (Colorado)
Posts: 5,067
Posted:
Monica, Rob posted what it means so I will expound on what it does not mean. It does not mean they can not foreclose for failure to pay assessments. And it does not mean they can not get a court order to enter your property to correct a violation and charge the property for all costs involved.
JeanneK3 (Maryland)
Posts: 562
Posted:
Bills to prohibit foreclosures for fines or attorney fees are pending in Maryland and Texas. These states are hoping to catch up to Nevada in preventing foreclosure scams.

Jeanne
DonnaS (Tennessee)
Posts: 5,671
Posted:

Monica,

Most States that have laws guideing or protecting HOA members have that type of wording included. Florida says that leins or forclosures may not be done for violation fees not paid, only for lack of payment on association dues. Fines for violations usually go thru small claims court as a last resort.
EdC5 (Florida)
Posts: 117
Posted:
Quote:
Posted By DonnaS on 03/26/2011 7:26 AM

Monica,

Most States that have laws guideing or protecting HOA members have that type of wording included. Florida says that leins or forclosures may not be done for violation fees not paid, only for lack of payment on association dues. Fines for violations usually go thru small claims court as a last resort.

Actually, as of July last year §720 was amended to allow forclosure for fines against a property exceeding $1000.
Edward J Cooke, CMCA, LCAM
DonnaS (Tennessee)
Posts: 5,671
Posted:

Thanks Ed,

The Fl website that I use still has not posted the 2010 changes to 720. I appreciate the update.
BrianB (California)
Posts: 2,820
Posted:
Curious, what typically constitutes "welfare" of people?

For example, if my HOA of 10 homes had 4 delinquent owners, and thus, the other 6 now had to carry the entire burden $$$$ themselves, and that $$$$ expenditure became difficult for some (fixed income, lost job, etc.), and they could not pay their assessment without cutting money from their budget for medicines, water, power, gasoline, etc., would that be 'affecting their welfare'? Could I foreclose on the 4 delinquents in order to save the welfare of the other 6?

Can it be economic welfare?
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Your example would be in regards IF the assessments were RAISED. Yes, the burden would fall onto the remaining six but the rate of assessments shouldn't change unless voted on. So, they should have already factored in that rate. However, if all 6 will have to agree to raise assessments to cover the 4 missing assessments, then that would effect the 6 owner's incomes.

Does the HOA have a lien on the 4 non-paying properties? A lien can be free or limited filing costs to file against an owner who owes assessments. It sounds like the 6 paying members need to get active and start forcing the other 4 properties to pay up. A lawsuit is expensive and unneccessary if you can lien. A lawsuit allows the owner's to sell and move. A lien holds them to the property to be paid if they were to sell or bank foreclosure.

A HOA foreclosure basically does the dirty work of the bank. The bank still gets paid FIRST. So it's NOT a good option to proceed with IF the property is part of a Bank Foreclosure. It's best to foreclose on a HOA property that isn't in trouble with the bank. Most of the time, the owner's realize all they have to do is pay up what they owe and the process STOPS. It's their choice to pay lawyers and whine to the public about it...
Former HOA President
RobW (California)
Posts: 279
Posted:
This is why I said that it would be tricky to prove (or disprove, for that matter) in every situation that the violation "is of a type that threatens the health, safety or welfare of the residents of the Community." It sounds like a litigation attorney's dream come true, unless there's a lot more language that wasn't posted.

Is there more language?

Rob
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Basically, this allows a HOA to remove certain items and bill the owner. The best example are Fences. If an owner has put up a fence and it's neglected to a point of danger. The HOA can remove/repair that fence and bill the owner for it. If the owner doesn't pay up, then the HOA can LIEN the owner for that amount owed plus legal fees.

This isn't considered a "Fine" which wouldn't be able to lien/foreclose for. It's a Violation instead. A violation of maintaining a healthy safe environment. This also can be extended into other violations including improper house colors or not approved projects. (Satellite dishes, solar panels, or building materials).

It's CONTRACTUAL business in a HOA. The CC&R's being the contract.
Former HOA President
MilesT (Texas)
Posts: 34
Posted:
Yes! And we need this in Texas. HOA's in Texas are foreclosing on people that are $20.00 in arrears - which are more late fees than actual fines. Much like the frivolous lawsuits, this will shut down rogue Associations.
MilesT (Texas)
Posts: 34
Posted:
Yes! And we need this in Texas. HOA's in Texas are foreclosing on people that are $20.00 in arrears - which are more late fees than actual fines. Much like the frivolous lawsuits, this will shut down rogue Associations.
RobW (California)
Posts: 279
Posted:
Quote:
Posted By MelissaP1 on 03/27/2011 2:48 PM
Basically, this allows a HOA to remove certain items and bill the owner. The best example are Fences. If an owner has put up a fence and it's neglected to a point of danger. The HOA can remove/repair that fence and bill the owner for it. If the owner doesn't pay up, then the HOA can LIEN the owner for that amount owed plus legal fees.

This isn't considered a "Fine" which wouldn't be able to lien/foreclose for. It's a Violation instead. A violation of maintaining a healthy safe environment. This also can be extended into other violations including improper house colors or not approved projects. (Satellite dishes, solar panels, or building materials).

It's CONTRACTUAL business in a HOA. The CC&R's being the contract.

I actually think it has to do with fines, not reimbursements. Your example would work this way, if this language means the same as it does in California:

The homeowner has a decorative fence that has deteriorated, and has become an eyesore. The association sends warning letters about it, but the homeowner does nothing. The association then begins fining the homeowner, but he ignores the fines. The association informs the homeowner of a hearing with the board.

The situation continues down the enforcement path, until finally, the association pays to have the fence removed, and levies a Reimbursement Assessment against the homeowner to recoup the costs incurred; but he refuses to pay. The association then proceeds to foreclose on the homeowner - not for the fines - but for the unpaid Reimbursement Assessment.

If I'm reading this correctly, under the terms of the language Monica shared to start this thread, the fines could be recouped in foreclosure if the fence was not merely decorative, but was necessary for security, or to prevent livestock from wandering into the common area. In that case, the welfare of the other homeowners is put into jeopardy by failing to repair or replace the fence.

Rob
ValerieS2 (Michigan)
Posts: 244
Posted:
Does anyone know what the Michigan laws say concerning thissame issue?

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