Back maintence fees

Started by GeorgeW • 13 replies • 1374 views

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GeorgeW (New Hampshire)
Posts: 9

Posted:

We have an owner that is 3 plus yrs behing in maintence fees for a total of $3400.00
Our by laws state that an owner in the rears will be subject to legal fees .My Question is how do we collect the money we have written them we put a lean on the property . They have no intention of paying up . What course of action can we take .We tried small claims another law suitewould cost thousands and collection agencys bwant 40 %
Anysuggestions would be appreciated
Thank you
GeorgeW

GeorgeW (New Hampshire)
Posts: 9

Posted:

SusanW1 (Michigan)
Posts: 5,202

Posted:

Did you put the lien on the property/

Update it every year?

That's about all you can do if you are not willing to hire an attorney or pay a collection agency.

60% of something is better than nothing.

MaryA1 (Arizona)
Posts: 7,043

Posted:

George,

I'm not a strong advocate for foreclosure, however, sometimes it's the only avenue left. IMO, this h/o should be foreclosed on since a lien and a small claims judgment hasn't worked and most importantly, it's a three year delinquency.

GeorgeW (New Hampshire)
Posts: 9

Posted:

Can we forclose on the property if we don,t own the land or hold the mortage .
Georgew

GeorgeW (New Hampshire)
Posts: 9

Posted:

Can we forclose on the property if we don,t own the land or hold the mortage .
Georgew

GeorgeW (New Hampshire)
Posts: 9

Posted:

Can we foreclose if we don,t hold a mortage on the property
GeorgeW

GeorgeW (New Hampshire)
Posts: 9

Posted:

Can we foreclose if we don,t hold a mortage on the property
GeorgeW

MaryA1 (Arizona)
Posts: 7,043

Posted:

George,

You need to thoroughly read your CCRs. I'm sure you will see that your HOA has the authority to foreclose for delinquent assessments. Also check your state laws for HOAs. The AZ HOA laws also contain statutes regarding the automatic assessment lien and foreclosure procedures.

MaryA1 (Arizona)
Posts: 7,043

Posted:

George,

Sorry, forgot to mention that the HOA does not foreclose on the mortgage they foreclose on the automatic assessment lien. Only a mortgage co can foreclose on the mortgage.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

George,

Read your covenants. Most HOAs can foreclose for dues delinquencies. Without such power, I don't see how an HOA could survive. What you force is the deed to the property to change to the HOA or to an auction buyer. Yes, you'll get the banks attention as suddenly it's owed money by a person and there's no property to back the loan amount. No matter what, either the property owner pays his/her debt or a new property owner will eventually possess the property.

It's rarely a winner for the HOA financially other than you hope a new owner will pay its dues. My community is dealing w/ three such situations right now. Non-payers, if unchecked, spread like cancer and starve your community to death.

LarryD6 (Indiana)
Posts: 6

Posted:

Quote:

Posted By KellyM3 on 07/13/2010 8:29 PM
George,

Read your covenants. Most HOAs can foreclose for dues delinquencies. Without such power, I don't see how an HOA could survive. What you force is the deed to the property to change to the HOA or to an auction buyer. Yes, you'll get the banks attention as suddenly it's owed money by a person and there's no property to back the loan amount. No matter what, either the property owner pays his/her debt or a new property owner will eventually possess the property.

It's rarely a winner for the HOA financially other than you hope a new owner will pay its dues. My community is dealing w/ three such situations right now. Non-payers, if unchecked, spread like cancer and starve your community to death.

Based on my research for Indiana Laws...Here is what I found...

HOAs have the right to enforce past due assessment fees. However, the HOA can't file for a lein prior to 1 year past due and has no right to a lein if not filed by the fifth year. The lien would be filed in civil/district court and awarded. I believe the lien can be attached to the property and can be reported to the credit reporting agencies.

Aside from that the HOA has the right to turn the debt over to a collection agency and the HOA has the right to be paid for collection/legal fees.

I believe any other action outside of past due notices gets to push the line for civil actions by the homeowner or member.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Larry,

Are you sure the "1-yr past due" applies to filing a lien? It sounds to me like it would apply to filing a foreclosure. Requiring the HOA to wait one year to file a lien could pose a real hardship on many HOAs. Depending upon what the monthly assessments are, being 1-yr delinquent could amount to a rather sizeable amount.

LarryD6 (Indiana)
Posts: 6

Posted:

Yes, It is part of the new HOA laws in Indiana that I referenced. I suspect may states will be adopting similar laws targeting HOA due to the potential abusive nature of the BODs resulting in law suits.

Here is the link to the Indiana Statute for HOA. Interesting read.

The time frame is in article IC 32-28-14-8 (Time limit for enforcing lien). Here is the link:

http://www.in.gov/legislative/ic/code/title32/ar28/ch14.html

Again,I have about 100 hours of research invested regarding my assertions listed in earlier posts...I have learned much about HOAs and I'm propbably better informed now than our BODs and PM.

Let me know your thoughs about the Indiana Code...

Larry

LarryD6 (Indiana)
Posts: 6

Posted:

As a side not, prior to the HOA Code being adopted, the HOAs in Indiana were held to the Indiana Code for Corporations with the shareholder being the property owner/member. Since our HOA hasn't filed for a non(not) for profit (501c) then they have no rights under the non-profit organizations code.

Larry

MaryA1 (Arizona)
Posts: 7,043

Posted:

Larry,

You seem to be confused; 501(c) orgs are tax-exempt and should not be confused with nonprofit corps, some of which may not be tax-exempt. If your HOA is a nonprofit corp (even though they may not have the 501(c) designation) the IN nonprofit code will apply. Some HOAs have gotten the 501(c)tax-exempt designation; application to the IRS must be made; however the majority are just nonprofit corps. BTW, the IN Code for Corps most likely does not apply to nonprofits as the state has a separate code for them. Unless HOAs in IN are not nonprofit corps, I doubt that the IN Corp Code ever applied to HOAs.

LarryD6 (Indiana)
Posts: 6

Posted:

Not going to claim to know how the 501(c) vs Non profit corps play out...I understand what you are saying in that 501(c) status doesn't really matter.

The HOA IC is recent within the last year and may be grandfathered to a HOA if they chose to. Prior to the HOA IC existing, I understand that the IN Code for Corps applied. HOA IC will apply to any HOA formed after the specified date, which I think is July 2009 but I can't find the reference.

Thanks for correcting my understanding. There is a lot out there to digest, hence why we have attorneys who attend college for years...

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