Category Archives: Foreclosures

H2O: The New Moneymaker In The HOA

guest blog by Nila Ridings

I just read where some HOAs that provide for water in the dues are now going to start charging homeowners by the number of people living in the unit.

This topic is being discussed in a CAI attorney’s newsletter that I subscribe to. Sometimes I find the information they share of interest and other times it makes me want to barf my Sunday breakfast.

I live in an HOA where our water is factored into our monthly dues. If they tried to bill us for usage based on the number of people living in each unit that would be a joke to say the least. Why? Because we’ve had people with hair salons in their basements, in-home childcare, carpet cleaning companies, dog groomers, and probably a laundry service or two operating out of the view range of their binoculars. We had one former homeowner who managed to get the HOA to install a completely new lawn all around her unit which she watered multiple hours per day. So much so her attached neighbor declared all the watering was destroying the soil under their shared driveway and causing it to have problems. When the hose mysteriously ended up with a slash the HOA ran right out and bought a replacement so the watering could continue.

On the other hand in the decade I’ve lived in this hellhole, I have worked out of state a total of about 12 months. When I leave for more than 24 hours, I always shut the water off and drain the pipes. (It’s a ritual taught to me by my dad to prevent me from coming home to a busted washing machine, dishwasher, or icemaker hose that could do massive damage if left to flow water for days.) By these new water billing rules, I would then be entitled to a refund for having no water or sewer usage during my absence, correct? No way would my HOA ever refund a nickel to somebody they despised, even if not a drop of water was used in a year!

And then there is the other situation where nobody is living in a unit: FORECLOSURE. I’m handling the foreclosure for a neighbor who finally had enough and decided after sixteen years to just walk away. The bank sent a company to completely winterize the pipes and shut off the water. Not a drop of water has been used for months.

At one time my attached neighbor had family circumstances that left her with fifteen additional family members living with her. They used a lot of water, probably more than what she paid in monthly dues. They were there for a few years and were great neighbors. We are still friends.

I’ve had some neighbors tell me about pipes breaking in attached units and they came home to a flood. Only to be unable to locate the neighbor or bank that owned the unit where the pipe broke. One guy walked to the back of the units and could see water clear up to the top of the patio door with everything floating inside. He said it looked like a gigantic fish bowl. He was able to reach the owner who was out of town. When he told him what was happening the guy said, “Thanks for calling, I’m never coming back!” And he didn’t! He let the bank foreclose on the moldy stinking mess.

My point of presenting all these examples is that one person can use more water than another for varying reasons. So how is the HOA going to collect the exact usage from the homeowners? They can’t. It’s impossible. The only way for each unit to pay for the amount of water and sewer they use is to have their own meter. And THAT is where the cheaper way to build these crappy places has come home to roost. It was a way to save a few bucks on the construction costs only to create a nightmare down the line for the homeowners and the HOA.

I’m taking a wild calculated guess at how this is going to come out. The board or property manager will charge an outrageous water usage amount to the members they do not like. If the unit owner doesn’t pay, they will lien and foreclose on the unit. Or figure out some way to shut off the water just to that owner.

And the battles rage on in the HOAs of America!

Oh yes, and my other reason for sharing…it is just one more reason to never buy a condo or a townhouse!

Florida Appeals Court Decides CC&Rs Trump State Law

guest blog by Deborah Goonan

Florida HOA industry proponents are all abuzz about a recent District Court ruling. The Fourth District Court of Appeals (DCA) has clarified in its decision that if HOA Covenants, Conditions, & Restrictions (CC&Rs) specifically state that a third-party buyer need not be responsible for paying past due assessments, that provision overrides FL state law.

Florida statute currently requires that third-party buyers at foreclosure must pay all past due assessment liens accumulated by prior owners. However, as written, its intent is not to impair contract rights that were in effect prior to the 2007 statute.

In this article (HOA COLLECTIONS…Fourth DCA Decision Slams HOAs In Florida) the owner of an HOA collections business does not appear to be happy with the appellate court’s decision to defer to HOA governing documents in lieu of state law.

Note the double standard at play here. When it comes to CC&R violations, HOA-proponents want the “contract” to prevail. But when it comes to collection of past-due assessments from third party owners, the same folks want state law to override the CC&Rs, thereby impairing the HOA “contract.” In fact, the lower court decided the case in favor of the HOA, citing state law.

In this article written by a FL Attorney, blame and shame is cast upon lenders for “mooching” off of homeowners, and state legislators for creating laws that protect mortgage holders’ financial interest at the expense of homeowners and taxpayers.
But didn’t HOA proponents favor “mooching” off of homeowners when they gloated about NV and DC appeals courts decisions that third-party buyers at HOA foreclosure sales could wipe out mortgage liens? After all, what happens to property values when an $800,000 home sells at auction for little more than $6,000 owed one the HOA lien?

Lots of angles here.

For instance, what exactly are your HOA assessments paying for? Most of it may be for essential infrastructure – roads, storm water systems, private utilities, security, and the like. These are traditional government services, making HOA assessments akin to property taxes. So why is the HOA a corporation and not an official “mini-government” subject to prevailing Constitutional law instead of contract law?

Portions of assessment funds may also be for non-essential amenities. But our current laws treat all of these funds as absolutely essential, and as mandatory obligations. Assessments must be paid No Matter What, or risk lien and foreclosure by your HOA. If HOA fees were truly “contractual” obligations, homeowners would have the power to withhold payment for non-delivery of services, and the HOA would not have the power to foreclose to collect liens.

On the other hand, if HOAs were truly “mini-governments,” then why wouldn’t HOA assessment liens – at least the portion payable for essential services – hold an equal or higher priority than property tax liens?

So many contradictions and double standards, none of which benefit the homeowner.

(link to brief summary of new case law)

 

Another ‘Kid-Friendly’ Homeowners Association

These stories are nauseating. Here’s another California Homeowners Association which has decided that kids are ‘Satan’s Spawn’ and need to be harassed out of the neighborhood. It’s understandable that HOA boards want kids to be safe. But I drive around neighborhoods all day long and see basketball hoops and skateboards and hockey nets. There’s rarely a story of any kid being hit in a neighborhood.

We’ve done enough in the PC world to screw up our kids’ heads. I’d far rather see kids playing basketball than getting fat playing video games.

Fie on the Whitney Oaks Community Association in Rocklin, California. Fie. Yes, I know that’s a little archaic. But it just feels good to say.

Fie!

(HOA bans overnight kids’ sports equipment)

 

 

 

Ultimate Bad Neighbors

Zillionare FaceBook founder Mark Zuckerberg is trying to start his own HOA in Palo Alto, California. He just doesn’t want anyone else to live there except him.

Understandably, when Zuckerberg built his own mansion he wanted some privacy and bought up all the homes around him. He can afford to toss around 38 million bucks. But he’s being sued by a couple who claim they were conned into selling their property at too low a price to a ‘mystery’ corporation that turned out to be Zuckerberg.

I sympathize with this billionaire wanting some privacy and security. He’s probably got more stalkers and paparazzi than George Clooney. But with his wealth why would you subject yourself to the incredible invasion of privacy that happens during depositions and court testimony? To Zuckerberg, 1.7 million dollars is pocket change. Pay these reptilians off and get on with life!

(link to Bloomberg article on Zuckerberg neighbor fight)

 

Hard To Get A Mortgage???

Some folks thought I was crazy when I claimed a Nevada Supreme Court decision could make it impossible for many people to get a mortgage. The court ruled that a 6000 dollar HOA lien could extinguish an 800 thousand dollar mortgage.

How is that possible?

How is that fair?

What mortgage company official in his or her right mind make loans in such an area? Is it any wonder that thousands upon thousands of Nevada homes are for sale and there are no buyers?

(link to industry news column on super-priority liens)