A woman in Houston, Texas has learned what thousands of other homeowners have learned: the HOA has incredible powers to seize and auction off your home for a tiny infraction.
Ann Izzat is 67 years old. Her home of 32 years was owned free and clear. At least that’s what she thought. She acknowledges she might not have paid her dues of $1200, but she says she never got notice of the overdue bill, and was never personally served any papers. But the sheriff’s office showed up on her doorstep, ordered her to completely empty her home of all her belongings within 30 minutes, and then took all of her possessions to the curb.
Her Kingwood Homeowner’s Association then auctioned her home off. A California company bought the home at auction for $7000.
Izzat has lots of company. Harris County HOAs seize and auction about 6000 homes a year.
The cops probably arrest one out of every 10,000 HOA embezzlers. It’s a crime that’s very hard to catch in the typical HOA structure. But here’s the latest suspect to be arrested.
41 year old David Russell Nero was treasurer of the Ashley Farms Property Owners Assocation in Dover Township, Pennsylvania. He’s now charged with stealing more than $60,000 from his neighbors in 2010 and 2011.
WPMT television reports that Nero is accused of forging 76 checks. He’s also charged with cashing out a CD that was bought by the Association.
Thanks, WPMT, for reporting on this story. Too few news outlets around the country even consider these arrests to be important news.
The power of an HOA to foreclose is greater than that of any bank or lending institution. Homeowners move into HOA neighborhoods never realizing how unforgiving Homeowners Associations can be.
Luisa Casas, an immigrant from Colombia, moved to Atlanta, Geogia and became a U.S. citizen. But she is now learning what tens of thousands of other Americans have discovered: an HOA has the power to arbitrarily take your house and sell it at auction, even if you’re just a few cents or a few dollars behind on your dues.
Luisa admits she’s late on her HOA dues. She went through a recent bankruptcy in the current economic collapse and is trying to recover. She admits she’s $2000 behind on her dues and wants to pay it. But it’s not the late dues that are jeopardizing her position as a homeowner. It’s the fact that HOA attorneys are tacking massive legal fees onto her overdue bill. Her $2000 past-due bill has ballooned to $13,000. The HOA has refused her attempts to pay the $2000 bill. It wants the entire $13,000 or it’ll take her house. And legal fees are increasing daily. The HOA lawyers are even tacking on expenses to pay for monitoring her bankruptcy case.
Her HOA is the Cosmopolitan On Lindbergh Condominiums. HOA officials have deactivated her entry card. They’ve also towed her car away on multiple occasions. Luisa says, “It just doesn’t seem fair to me.” Luisa, welcome to America, the land of the free.
You’ve just got to be suspicious when a bunch of lawyers start urging lawmakers to protect their ability to sue builders.
There’s no question that builders need to take responsibility for defective construction. But remember that lawyers automatically take at least third of any money they get from successfully suing contractors. Heck, Las Vegas lawyers were reaping almost 100% of all money collected from builders. That’s why the FBI raided 100 Homeowner Associations and has filed corruption and organized crime charges against 24 people, including a number of lawyers. The Las Vegas scandal is so huge that many more lawyers, judges, and public officials will be charged in future months.
But, in any event, after a lawsuit there’s not much money left to actually cover the cost of repairs.
But lawyers in Florida are lobbying Governor Rick Scott to veto HB 103, a bill that would revise the relationship between builders and homeowners. Instead of allowing lawyers unfettered access to legal fees, a better idea is to work out a state mandate to hold builders financially responsible for repairs, without running it through the financial scam known as “legal fees.” Homeowners who suffer through defective construction need to be awarded 100% of their losses, not what’s left over after the legal fees are paid.
I honestly love it when I can mention the name of somebody actually sent to prison for embezzling from a Homeowners Association. While I strongly suspect that embezzling is endemic, hitting almost every HOA everywhere, most embezzlements are never discovered. The structure of Homeowner Associations (UCIOA contracts) almost urges embezzling by HOA officers. And they do. People who seek office in unpaid positions, are mostly there for a reason. They’re either ego-driven, or short-term do-gooders and reformers, or they’re looking for a chance at personal gain. Personal gain means, in most cases, embezzling. I may be criticized for my cynicism, but you don’t become a cynic without good reason.
Most cases of embezzling HOA officers don’t get any news media coverage so there’s no way to track all the convictions. But here’s one that did: Kristy Jenkins (KRISTY JENKINS!) is going to prison in Idaho after pleading guilty to felony theft. It’s a plea agreement, so she’s getting a bargain sentence. Just one year. That probably means an actual confinement of eight months.
The prosecutor says Kristy stole at least $20,000 from her neighbors, which is a very low estimate. But Kristy Jenkins is a piece of slime, just like every other thief in Homeowners Assocations across America. And she has tons of company. If every HOA embezzler was sent to prison, there wouldn’t be room for anyone else!
Not many news media people report HOA embezzling stories, but compliments are due to The Republic in Boise, Idaho. Here’s a link to their story.
