HOA Foreclosure in New Mexico?

Has anyone here handled foreclosures in NM?

I am the president of a very small 8 unit association. We have one resident who owns two units. The second she inherited from her mother at the time of her death. Both units are in arrears to a tune of $4000 in total.

Recently, another resident was denied a re-fi because of this situation. Because of the significant amount of money owed by one person owning more than 10% of the units.

Also, we are not longer qualified for FHA mortgages because of what this resident owes.

Please don't think I am complaining about fees to cover grounds keeps and that kind of thing. Our buildings were once apartments so we are master-metered. Our HOA fees cover our utilities. So basically these residents, daughter and now deceased mother, didn't pay their utilities for years. YEARS! We have had every excuse in the book. Now when we approach the resident, we are not being understanding about the death of her mother. Which by the way, happened 6 months ago.

We have placed a liens on both units. We have talked and talks and conjoled and sympathized for years now. We simply cannot deal with this situation anymore.

Please if you have an suggestions on what we can do, I would appreciate it very much.

Thank you!

Bridgett

A foreclosure STOPS as soon as the money owed is paid. The owner could afford a loan of $4K if they want to keep their houses one would think. It's not that far into the debt zone that the owner could not raise the money to pay it off. So I don't see the "cruelty" part of taking the property away in a foreclosure.

We foreclosed on a house that owed only $2,500. That owner decided to go through like 4 lawyers and not pay any of them. So they lost their house for $2,500 and then later was sued for $10K by the tenant they had a rent to own situation with. Sometimes their own "HOA horror story" is their own and of their own creation.

The situation of one effects you all. You are ALL losing money and the ability to refinance and offer loan options. Don't you think it's about time to do something aggressive that can be resolved by a simple check?

Thank you Larry,

That is MY concern. How are we going to pay for a foreclosure? My treasurer, who's re-fi was denied, is justifiably enraged wants to pursue this. Covering these two deadbeats for as long as we have has drained our reserves. There was barely enough money to hire a lawyer to draw up the latest lien.

I had never thought of turning off their power at the panel. hum...I had assumed since we are master-metered all the units were tied together. I will look into that.

In the deadbeat's defense, she does have a renter in the 2nd unit. But we have yet to see any monies from that rental in regards to paying off the her debt.

Filing a civil suit is something we also need to consider. We have 16 parking spaces, 2 spaces per units, the dead beats have 5 cars in the parking lot. At this time, the association, doesn't have the power to tow vehicles but we will very soon. The BOD will be putting it to a vote.

If the deadbeat has a renter and she's still not paying anything, you could sue the owner ans ask the court to garnish the rent. The renter would have to pay you instead of the deadbeat and that rent would be applied against the amount owed.

It's no guarantee of anything, but it's worth a shot. Our association just took a house in a foreclosure which has a renter and he's now paying us. The deadbeat owned the house free and clear, so we FINALLY have a house that can be sold without having to worry about a mortgage company! As Melissa has said in the past, we're not interested in the homeownership business (running the Association is enough!) so we working to get the place appraised and go on from there.

Many states, even mine, have laws that prohibit a landlord from diminishing services for non-payment of the rent. These statutes seem to apply only to the landlord. The electric company, for example, may lawfully shut off service if the tenant is responsible for paying and has not done so. The statutes do not apply to the electric company as they are not the landlord.

I see this case the same way: the condo association is not the landlord. It is providing services which are available for payment of a fee and the fee has not been paid. The association has no legal obligation to continue supplying services to units that are not paying their share of the bill.

LOL, OMG Brian, you scare me.

I am still looking into to turning off their power. What scares me is the age of the buildings. I don't want to cause a short and burn down our buildings...and with my luck that is exactly what would happen.

Let's not get carried away and take the law into our own hands here... The reality is that one can NOT shut off someone's utilities or water unless it is exclusively written into the documents. We could turn off your water in our documents if you did not pay your dues. However, our HOA PAID for that water useage with the dues it collected. So unless your HOA is paying for the utility bill or includes that service in their dues, it can't shut them off. After we adopted separate water meters, and change our documents to reflect that, we could no longer shut off one's water either.

Now, remember what the purpose of a HOA is... It is to make the homes more ATTRACTIVE to potential buyers. More attractive and better loan offerings your HOA has to offer, the better off everyone is. It does NOT keep or maintain home values. That's another creature altogether and a misnomer. Not providing or cutting off certain services to a home not paying their dues can effect everyone. So it's best to just have a cushion built into your budget for such things as covering those not paying and for recovery costs. I usually kept a cushion of 3 - 5 owner's not paying to keep our budget each month.

Our HOA's one and only main provision was lawncare. We had the lawns maintained for ALL the homes since we had 107 homes on a quarter mile oval. Postage stamp size yards all considered COMMON AREA. We simply could not stop mowing one yard because it would effect the asthetics of ALL the homes and bring attention to the situation. So we continued to mow the yard of even those who owed us money. We just didn't go out of our way about it nor if they complained about the job, respond.

The reality and what we wish we could do are two different things. A foreclosure does take about 6 months to make happen regardless of what we want. It's the law. I can't just kick out my tenants because they don't pay or break the rules. There are 2 10 working day notices to be sent out on an eviction. Which evictions can take up to a year in some areas for an owner to remove a tenant. The HOA can't do it as they don't own the house. They can't fine the owner either unless that is written into the documents.

So be very very very careful on these matters and don't let your emotions get the HOA in trouble. Follow the laws. Don't do until others what you think should be done. Do unto others as you have the power of the law to do. Someone buys a car from you and ceases payments... What can you do then? That's your answer in a HOA as well.

What law states that an association must continue to supply utilities to a non-paying member? And even if there was such a law, what would happen if the association violated it? Is the sheriff going to arrest someone? No, it would be a civil matter and the non-paying unit owner would have to seek relief in court. If he seeks to hire an attorney for that, the lawyer will advise his client to pay the assessments because the lawyer's fees are going to be much higher than that.

Your argument is that even though the contract has been breached -- one party has stopped performing as agreed -- the other party must continue to perform as if there was no breach. What legal authority do you rely on to support that argument?


It takes about two to three weeks in AZ. That's from the time the complaint is filed to the time the constable shows up to throw stuff into the street if the tenant has not already vacated.

When one begins repairs on existing utilities unexpected situations may crop up that could delay repairs for days, weeks, or even months! Why, sometimes you start a project and find it is going to cost more than you budgeted so you have to delay completion until you receive additional funds.

The reason an eviction can take up to a year to perform is that the tenant has the option to respond. If the tenant responds and has grounds of "false eviction", the court will extend the notice again. This can happen multiple times until time up for the lease. Let's say the HOA contact you the owner to report that your tenant is breaking the rules of the HOA. They want you to evict your tenant or face fines. You then serve your tenant notice to vacate. Well, it turns out that your lease agreement does NOT include your tenant is to obey and follow the HOA rules. The very reason why you are evicting. If it's NOT in your lease agreement with the tenant violations of HOA rules are ground for eviction, you can't evict. The tenant has rights and can respond stating that they are not in violation of the lease. They are not and thus can NOT be evicted until they actually violate the lease agreement or it expires. Which if you have a year's lease and they violate the first month in, your in for a 11 month wait...

It took me 5 months to evict my tenant. He did not pay rent for that time period plus damaged the place. (Kept a baby emu in the backyard). I served him notice and he no longer had a lease agreement. However, the first time around I didn't do it through the proper court notification. I then went through the court system. That took 2 10 working day notices to ignore weekends and holidays. He then still did not move and took an additional 2 weeks for the sheriff eviction to take place. Total of 6 weeks or a month and a half upon the already. I had to put the house for sale to get them the hint to move out! So NOT all rental evictions are equal and the same. Tenant rights can really throw a wrench into the eviction process that even an owner can not go past.

Utilities are a funny thing. I doubt that each owner in the HOA has an deposit with the utility department. There is probably one master utility agreement involved with an HOA that provides utilities and water. That means that the HOA needs to consult the utility department to see what they can do as they are in a "Group rate" type agreement. Which typically a group rate has built in compensations for those who don't pay or for those who use more than others. It's not fair as well for everyone to support those who never turn off their lights and keeps their front doors open in the winter just as much as those who don't pay. I suspect the utility department has some payment situation setup that no one unit is exclusive but inclusive. The HOA needs to revisit this and ask the utilities their options in the plan they have set up.