A huge jury verdict in Nevada was just awarded to a homeowner against two HOA collection companies. Across the country many HOA boards assess minor fines and liens against homeowners and then turn the accounts over to their law firms for collection. It’s so tempting for an ambulance-chasing law firm to turn to the easy profits of debt collecting. It’s not unheard of for minor fines to turn into huge foreclosures. Law firms add so-called ‘collection costs’, legal fees, interest and other such nonsense onto nickel-and-dime fines. It’s enormously profitable for such lawyers to have a buddy down at the county offices when the properties are auctioned off for pennies on the dollar. A whole roomful of Las Vegas lawyers are in jail right now for similar racketeering convictions.
The law firm hired by the Arrowcreek Homeowners Association in Washoe County, Nevada was accused of violating federal and state regulations against racketeering and violations of the Fair Debt Collections Act. The jury agreed and awarded the homeowner more than $600 thousand.
The link below is to a press release by the homeowners legal team. Obviously, the press release is to attract business. But since this law firm has affiliates in many other states it could possibly strike some fear in the hearts of the HOA Lawn Nazis!
Yep, that’s the quotable quote emerging from an HOA scandal in Anne Arundel County, Maryland.
Residents of the Russett Community Association voted to throw out the top two board members who homeowners claimed were misusing HOA funds. True to form, the two board members voted that the recall elections weren’t valid because they weren’t approved by the board. Then they fought the recall election in court, and of course they spent neighborhood dues money to pay for their own defense. It happens in thousands of HOAs across the country!
In this case, though, a judge ordered that the two board bullies step down from their positions. They’re not going easily, though. They’ve squandered anywhere from 80 to 100,000 bucks and more in dues money to fight the homeowners in court.
Those of us ‘in the know’ just shake our heads in wonder.
It’s all about the news media, folks. It’s all about publicity. P.T. Barnum was once rumored to have said, “There’s no such thing as bad publicity, it’s all publicity.”
Five years ago I wouldn’t have believed it possible, but now anti-HOA stories have almost gone mainstream. Our misery as HOA homeowners really is getting out there and prospective home buyers are paying attention. Does a Homeowners Association really protect your property values? Well, your property is only worth what someone is willing to pay. So if a growing number of people are saying they’ll never buy an HOA property, doesn’t that mean your HOA is actually hurting your property values?
Oh, the tempers have started furiously flying at the sight of the assessment letters arriving in the mail!
The homeowners in the elite HOA of The Lakes in Visalia, in the Central San Joaquin Valley, are fuming because the private roads need paving (according the property manager and the board) and that requires an emergency assessment of $2,300 per lot. If a person owns three lots they need to triple that payment. Why the need for the emergency assessments? Quick answer: The reserves are underfunded. Which comes as no surprise to all of us who work daily on HOA issues.
The HOA attorney has informed the unhappy homeowners that the HOA board is within its legal rights to demand the assessments. And, if not paid, they will lien the properties until it is.
Our regular readers have heard me say this many times: Buying into an HOA comes with massive risks. When the ink dries on the purchase contract, you become the guarantor for all debts, loans, lawsuits, settlements, liabilities, construction defects and disaster rebuilds for the entire HOA. There is no way to escape it. The CC&Rs are never quite that clear and easily understood, but that’s what it boils down to.
The Lakes of Visalia has now joined the massive number of HOAs that are already war zones. Welcome to the REAL WORLD of HOA living!
We’ve seen this kind of thing over and over. You buy an expensive HOA home next to a golf course or a pretty little lake. You pay an extra high premium for such a nice view.
Suddenly, it all goes away. The golf course is sold to a new developer who hatches a plan to add a whole new subdivision on top of the golf course. The pretty little lake, it turns out, is a drainage basin for the county and the county suddenly decides to drain it.
Where’s your investment? Gone, gone, gone. Welcome to HOA living.
