A service of:
Community123.com
Professional websites for HOAs & condos, since 2004
🎁 1st year FREE for HOATalk members! →
← Return to Topics List

What is the difference between a mortgagee and lot owner?

Started by RonM4 • 17 replies • 1609 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in

RonM4 (Maryland)
Posts: 26
Posted:
I recently made a request to review some of our HOA records and I received a letter back stating “Article X, Section 10.2(a) concerns the rights of mortgagees to the inspection of books and records of the Association not Lot Owners.” Based upon this, my request was denied. My question is what is the difference between a mortgagee and a lot owner when it comes to matters of the HOA? I know the mortgagee is one who loans the money for a mortgage but I own my house without a mortgage.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Think there are more details missing here. What information are you looking for and are their unsold lots? What is the set up? You may be denied being able to view certain records like collection reports of other owners. You can view your collections but not of others. So provide a bit more information to be better to understand the denial and information your requesting. Thanks!
Former HOA President
RonM4 (Maryland)
Posts: 26
Posted:
Further information as requested: Our HOA does an annual walk thru to ensure that residents are properly maintaining their property. I had asked for a copy of the violations as well as addresses. I specifically said I was not interested in names or owners of the property. I made my request because I feel some homeowners are allowed to “slide” while others are cited for small infractions. I stated that I felt I was entitled to such a list because as a resident of the community I have the right to ensure my property value, as well as my neighbors is maintained through the enforcement of the covenants. My response from the HOA Board was that this was a privacy issue and not entitled to view the records. But, it appears that mortgagees have the right to access this information yet, as a person who has no mortgage I cannot review such violations.
DaveD3 (Michigan)
Posts: 796
Posted:
What exactly does Article X, Section 10.2(a) state?
RonM4 (Maryland)
Posts: 26
Posted:
Sorry, I left out some information: There are no unsold lots. It is a community of about 230 single family homes and 250 townhomes. I own a single family home. I did register a complaint with the Board because I was cited with dirty vinyl siding while my neighbor, who's dirty siding is much more visible did not receive a violation notice. Another neighbor has been allowed to park a trailer on his side yard in violation of the covenants also without receiving a violation notice. I am not too well liked by the Board because I do question them and their actions. I feel this is their way of trying to silence me.

Here is a part of Article X: 10.2. INSPECTION; STATEMENT AND NOTICE. A Mortgagee shall, upon delivery of a written request to the Association, be entitled to
(a) inspect the Association's books and records during normal business hours;
(b) receive an annual financial statement of the Association within ninety (90) days after the end of any fiscal year of the Association;
(c) be given timely written notice of all meetings of the Membership, and designate a representative to attend all such meetings;

The letter from the Associaition stated: "Article X, Section 10.2(b) concerns the rights of mortgagees to the inspection of the books and records of the Assocaition and not Lot Owners"
DaveD3 (Michigan)
Posts: 796
Posted:
Thanks. My initial thought was that it might have been a scrivener error where "mortgagee" was incorrectly placed, but from the text, clearly not.

It seems simply implausible that the mortgage holder would have rights to review documents over and above what the homeowner would have. It seems like other sections must cover review of records by homeowners.

Now... considering that there is no mortgage on your home, are you not then the equivalent of a mortgagee? If not, then how would you legally become the mortgageee of your own home? Suppose there was a family trust that was named as the owner, and that owed some debt to you, or vice versa. There must be a way ;)
LarryB13 (Arizona)
Posts: 4,099
Posted:
Does state law require the records to be open to inspection by the owners? Is there any other article in your covenants that allow owners to inspect the records?
GlenL (Ohio)
Posts: 5,491
Posted:
Ron it sounds like an attempt to hide records from homeowners, however the law has you covered:

§ 11B-112. Books and records of homeowners association; disclosures to be deposited into depository.

(a) Books and records - Examination; public inspection.-

(1) (i) Subject to the provisions of paragraph (2) of this subsection, all books and records kept by or on behalf of the homeowners association shall be made available for examination or copying, or both, by a lot owner, a lot owner's mortgagee, or their respective duly authorized agents or attorneys, during normal business hours, and after reasonable notice.

(ii) Books and records required to be made available under subparagraph (i) of this paragraph shall first be made available to a lot owner no later than 15 business days after a lot is conveyed by the declarant and the lot owner requests to examine or copy the books and records.

(iii) If a lot owner requests in writing a copy of financial statements of the homeowners association or the minutes of a meeting of the governing body of the homeowners association to be delivered, the governing body of the homeowners association shall compile and send the requested information by mail, electronic transmission, or personal delivery:

1. Within 21 days after receipt of the written request, if the financial statements or minutes were prepared within the 3 years immediately preceding receipt of the request; or

2. Within 45 days after receipt of the written request, if the financial statements or minutes were prepared more than 3 years before receipt of the request.

(2) Books and records kept by or on behalf of a homeowners association may be withheld from public inspection, except for inspection by the person who is the subject of the record or the person's designee or guardian, to the extent that they concern:

(i) Personnel records, not including information on individual salaries, wages, bonuses, and other compensation paid to employees;

(ii) An individual's medical records;

(iii) An individual's personal financial records, including assets, income, liabilities, net worth, bank balances, financial history or activities, and creditworthiness;

(iv) Records relating to business transactions that are currently in negotiation;

(v) The written advice of legal counsel; or

(vi) Minutes of a closed meeting of the governing body of the homeowners association, unless a majority of a quorum of the governing body of the homeowners association that held the meeting approves unsealing the minutes or a recording of the minutes for public inspection.

(b) Books and records - Charge for review or copying.-

(1) Except for a reasonable charge imposed on a person desiring to review or copy the books and records or who requests delivery of information, the homeowners association may not impose any charges under this section.

(2) A charge imposed under paragraph (1) of this subsection for copying books and records may not exceed the limits authorized under Title 7, Subtitle 2 of the Courts Article.

You can see all of the statutes here: http://statutes.laws.com/maryland/real-property/title-11b

And yes the law does trump your CC&R's.

Studies show that 5 out of 4 people have problems with fractions
CarolR11 (Colorado)
Posts: 2,563
Posted:
As Larry suggests, take a look at your state laws.

But even if owners are allowed to review & copy HOA records, and even though you don't want to see the actual names of the violators, I don't believe that you can have access to the addresses and types of violations. Specific addresses/violations would pretty easily identify the violator.

At least in CA, Owners cannot have details about specific rules violators.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
don't think the HOA should give out this information on violations. If you have an ACC they don't give this out either for the most part. It is kind of tricky ground here. Yes the HOA does know about the violations but how they are dealing with it is kind of personal. You shouldn't have to request addresses those are obvious out the front door.

There will always be "unequal convenant enforcement" in all HOA's. The fact is that HOA's do NOT protect your home values. They protect the ATTRACTIVENESS of your neighborhood to attract buyers.
Former HOA President
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Ron

Why do I think you have been accused/fined for violation(s) and you are looking for other violations that might have been ignored as your defense?

LarryB13 (Arizona)
Posts: 4,099
Posted:
The courts have ruled that "[A] recorded declaration that contains restrictive covenants common to all properties in a development forms a contract between ‘the [development’s] property owners as a whole and the individual lot owners."

Why is it that so many people on this forum feel that a party to a contract should be denied access to records alleging breaches of that contract by other parties to the contract? To put it another way, why should one party be allowed to conceal his breach of the contract from the other parties?

JohnC46 (South Carolina)
Posts: 14,265
Posted:
Larry

My beliefs.

Just because someone is accused of something, they are innocent until proven guilty. Now let us translate/relate this to an association.

Owner A writes a letter to the BOD accusing Owner B of a violation. Now how the BOD goes about whatever their process to verify or disagree with. During this process, I say the identity of A and B should be protected/hidden.

Once the BOD determines that B is in violation they should attempt to get B to correct before starting any punitive/public action. I say handled the same as one falling behind in dues. Try to reasonably work it out.

Once punative action is started, then such action (as in against B) should become public knowledge. No hiding/disguising it like in lot # but no names, etc. Make it public record. Available to all and any.

Years back in private, member owned clubs once a member fell behind so far behind in dues/billing and they did/would not work it out with the club, their priviledges were suspended. Also their names were publically displayed on a Notice Board in the club entry way. Yea..yea..some will say public shaming is bad, does not work, etc. but once every effort has been expended, I have no issue with public shaming (knowledge). I think it can work.

My name is posted not to be allowed in Mexico unless with Mel.......LOL

MelissaP1 (Alabama)
Posts: 13,836
Posted:
A BOD is elected to represent the whole of the membership. It is up to the BOD to decide how to enforce the rules not the individual members. It opens the door to vigilantism and chaos amongst members,

Not every violation is equal or can be handled the same way. Each case is different. Must be handled by a case by case way. Just letting the worls loose really just does not help anyone.

Plus who are we kidding her? The purpose of this is for a possible lawsuit. It all goes back to that. Someone gets turned in for a violation or someone gets denied approval. It is just an excuse to toss up "lawsuit". Although we all know my famous words of advice on that one...You sue your HOA you are suing yourself and your neighbors. So ggod luck on your witch hunt and hope you find what your looking for...I will be in Mexico with John...
Former HOA President
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Mel
Salt or no salt on the rim of that margarita..I prefer salt as in bitter with the sweet...like making it with an ex-spouse...which is which.....LOL
DaveD3 (Michigan)
Posts: 796
Posted:
If action is taken against a unit for a violation, that should be on record in the meeting minutes, should it not?
GlenL (Ohio)
Posts: 5,491
Posted:
Quote:
Posted By DaveD3 on 07/27/2012 7:19 PM
If action is taken against a unit for a violation, that should be on record in the meeting minutes, should it not?

That often depends on the State and the CC&R's, for instance our CC&R's state that CC&R enforcement cannot be reviewed by other homeowners. It is not until it gets to the lien stage, which is a public document, even then the Board doesn't comment on it publicly. If H/O's want to know who the HOA filed against, they need to visit the Clerk of Courts website.
Studies show that 5 out of 4 people have problems with fractions
CarolR11 (Colorado)
Posts: 2,563
Posted:
In CA, owners have no right to review the minutes of executive session, which is where owner discipline decisions are made. The names or other identifiers may not be shared with all HOA members.

I'm talking about rules violations here, e.g., noise nuisances, dirty siding etc., which is the topic of this thread, not other types of covenant violations, e.g., delinquencies.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

  • ✓ Ask follow-up questions
  • ✓ Share your experience
  • ✓ Get expert advice
  • ✓ Access 350,000 discussions
Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here

Terms of Use and Privacy Statement