You all know how I despise HOA corruption. Actually, that’s superfluous. HOA and corruption are pretty much interchangeable. “You got corrupted?” “You got HOA’d?” See what I mean?
But a federal judge has just ruled that sticky-fingered lien-flingers can’t assume a superior position when trying to screw a homeowner and his mortgage company over some tiny violation of CC&Rs. The only problem is that without all those illicit profits, your HOA will just have to raise your dues. Or file lots more lawsuits.
Keep your grass trimmed! Don’t let an overnight guest park his car on your driveway! And by golly, don’t display the American flag!
There are some scattered court cases which may have an interesting impact on Homeowners Associations, an impact many of us would love to see. From the National Law Review, the West Virginia Supreme Court of Appeals ruled that HOAs are debt collectors. We all know they file liens and harrass homeowners into paying dues, fines, collection costs, attorneys’ fees. But if they’re debt collectors then they have to follow all the laws governing debt collections. With what we know about HOA bullies that could subject associations to huge fines.
The Supreme Court’s recent disparate impact decision has been discussed before on Neighbors At War. It will most likely lead to a huge increase in lawsuits because people were discriminated against even if there was no intent to discriminate. Well, housing discrimination is basically the middle name of many HOA board bullies. This creates tremendous financial liability for all HOA communities.
Then there’s the Nevada high court ruling that HOA liens have super-priority status over mortgage companies. Nearly two dozen states have such rules. Lenders might become extremely wary of lending money to potential buyers of HOA property. Once that trend starts, HOA home values will crash because buyers won’t be able to find lenders.
