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HOA will you any way they can, charge you for the clean-up, and hope you catch a ride someplace else.
But people have won in Texas, it happened in SA not too long ago.
Army captain serving in Iraq had his paid-up, $300,000 house siezed by his homeowners association for about 2 months worth of dues.
He got NOTHING from the sale.
The association got $3,500, to cover the fees plus legal costs.
Yes, that's right. They seized his house and sold it for $3,500.
The laws allow for this, and Texas has the most association-friendly laws on the books. Astonishingly enough a Republican state senator runs the largest association management company in the US.
What.
The.
?
"You owe us $600, so we can seize and sell your house in less than a month."
http://www.npr.org/templates/story/s...078864&ps=cprsJune 29, 2010 Capt. Mike Clauer was serving in Iraq last year as company commander of an Army National Guard unit assigned to escort convoys. It was exceedingly dangerous work — explosive devices buried in the road were a constant threat to the lives of Clauer and his men.
He was halfway through his deployment when he got a bolt from the blue — a frantic phone call from his wife, May, back in Texas.
"She was bawling on the phone and was telling me that the HOA [homeowners association] had foreclosed on our house, and it was sold," he says. "And I couldn't believe that could even happen."
Clauer had a hard time understanding what his wife was saying. His $300,000 house was already completely paid for. Could it be possible that their home was foreclosed on and sold because his wife had missed two payments of their HOA dues?
In many states it is not difficult for an HOA to foreclose on a member's home for past dues even if the amount owed is just a few hundred dollars.
"I was really in a hurry trying to get home before my family was living on the streets," Clauer says.
Sold For A Steal
But by the time he got back to Texas, it was too late. The Clauers' four-bedroom, 3,500-square-foot home had been sold on the courthouse steps for just $3,500 — enough to cover outstanding HOA dues and legal costs.
The new owner quickly sold it for $135,000 and netted a tidy profit.
"Basically it's everything to us," Clauer says. "Having a house like this paid for was huge for us, for our retirement plans. We thought we were so far ahead, and now it's like we're starting from the beginning."
Clauer's $300,000 home was completely paid for when his HOA foreclosed on it because his wife had missed two association payments. The 3,500-square-foot home was sold for $3,500 on the courthouse steps.
Lawyers for the HOA say that while Clauer's case is regrettable, it was his and his wife's fault for not paying their dues in a timely manner.
"The fact of the matter is, the laws of the state of Texas allow the homeowners association to file assessment liens on properties who haven't paid their assessments, and they also allow foreclosure on those liens," says Patrick Whitaker, who represents the HOA. "And the homeowners association followed the letter of the law."
Beg For Mercy
And in 33 states, an HOA does not need to go before a judge to collect on the liens.
It's called nonjudicial foreclosure, and in practice it means a house can be sold on the courthouse steps with no judge or arbitrator involved. In Texas the process period is a mere 27 days — the shortest of any state.
David Kahne, a Houston lawyer who advises homeowners, says that in Texas, the law is so weighted in favor of HOAs, he advises people that instead of hiring him, they should call their association and beg for mercy.
"I suggest you call the association and cry," he says.
If a homeowner misses a couple of association dues payments, the $250 or $500 they owe often becomes $3,000 after the association's lawyers add their legal fees, Kahne says.
It's not the HOA that has to pay the lawyer's bill but the delinquent homeowner. If the homeowner wishes to contest and loses, the owner is on the hook for legal fees that could run deep into the tens of thousands of dollars.
Kahne says that as the economy has gone under, HOA management companies and lawyers have been making millions off homeowners through this foreclosure process.
"We're having literally thousands of lawsuits filed over very small amounts of money," Kahne says. "And those very small amounts of money rapidly become large amounts of money when the association attorneys add their bills."
Suddenly faced with a demand that they pay $3,000 immediately or lose their home, many disbelieving homeowners don't know where to turn.
With the recession, foreclosure filings for delinquent HOA assessments in Texas have increased from about 1 percent of all home foreclosures to more than 10 percent currently, according to the industry.
'Won't You Be My Neighbor'
Over the past 20 years, HOAs have exploded across Texas. While there are 1,100 municipalities, there are now 30,000 HOAs. And these associations have far more power to take away a citizen's home than any city or county in Texas.
The perception that the balance of power has swung too far toward HOAs has begun to permeate the Texas Legislature. Reform legislation has passed the Texas House of Representatives, but no bill has been able to make it through the state Senate.
Basically it's everything to us. Having a house like this paid for was huge for us, for our retirement plans. We thought we were so far ahead, and now it's like we're starting from the beginning.- Capt. Mike Clauer, whose house was foreclosed on after two missed HOA payments
"Associations are a collection of neighbors," says Republican state Sen. John Carona, who represents Dallas. "The goal has to be to work well together — have a harmonious community — and to create a lifestyle that people enjoy and want to be a part of."
In addition to representing Dallas, Carona owns the largest HOA management company in the country — Associa, which has more than 100 offices, 6,000 employees and 7,000 HOA clients in 30 states and Mexico.
Carona defends the rights of HOAs to foreclose for delinquent dues, even for small amounts.
"If an association did not have a means, a forceful means, to collect that money from any homeowner who, for whatever reason, couldn't pay, it places an unfair burden on every other owner in that association," Carona says. "And a burden, quite candidly, that those other members didn't bargain for."
There have been complaints that some members of HOA boards have bought HOA-foreclosed properties for a pittance, and then sold them for a hefty profit.
In Texas, there are no laws to prevent this. Carona says the best way to address this apparent conflict of interest is not by passing new state laws but by letting the HOAs handle it internally through modification of the association's cons ution.
"I think that an association can avoid that type of thing by adopting conflict-of-interest rules," he says.
Closing Loopholes
Republican state Rep. Burt Solomons from North Texas has been trying in vain to pass HOA reform legislation. He says during state legislative hearings there was no shortage of outraged homeowners, but he acknowledges that the HOAs, their property management companies and their lawyers fought back effectively.
Pending a legal case, Clauer, his wife, May, and his daughters, Kirsten and Kamryn, are still living in the home that was foreclosed on.
Solomons says HOA board members and advocates testify and say, "'We need the power to access and fine and foreclose, and we need the money. And we look for people in violation of the rules and restrictions that we put in place.'"
"And they drive around in golf carts looking for them," Solomons says.
In theory, HOAs are only supposed to foreclose for nonpayment of dues. But Solomons says that through a loophole in Texas law, in practice, HOAs can foreclose for nonpayment of HOA fines, too. Solomons watched with frustration last year as his reform bill died in the Senate.
Legal Recourse
As for Clauer, he's gone from fighting in Iraq to fighting his HOA in Texas. And if he weren't in the military, Clauer would have no legal recourse at this point.
But in a spasm of gra ude in 2003, Congress passed the Servicemembers Civil Relief Act, which was supposed to prevent nonjudicial foreclosures against military personnel fighting oversees.
"Hopefully we're going to get the house back," Clauer says. "That's what we're fighting for — that the judge will understand that this was illegal. That the HOA can't do what they've done."
If a federal court decides in favor of the Clauers, the foreclosure and subsequent sales of their home would have to be unwound and the deed returned to them. If they lose, the captain's nice, paid-for, suburban home would be lost to his family forever. The case goes to court early next year
I will never, EVER belong to a homeowner's association. that.
HOA will you any way they can, charge you for the clean-up, and hope you catch a ride someplace else.
But people have won in Texas, it happened in SA not too long ago.
Sad story, but that's why you read and understand any contract carefully.
I hope the people who did this to Clauer (HOA) die.
Homeowners associations are evil ins utions that should be avoided at all costs.
It's a ridiculous situation that, had the HOA had a modi of decency, could've been avoided. That being said, the backstory to this is the wife received several notices from the HOA..even certified letters, but she didn't open them because she was afraid to. Had she bothered to read the letters, chances are this could've been nipped in the bud at the beginning of the issue.
I'm not in any way excusing the baggery of the HOA, but there was more than one solution.....
I would take my M-16 and spray their next meeting, making sure not a single bag left in anything but a bag. What a bunch of ing suckers.
bet that HOA always talks a good game about backing our veterans.
That story gave me chills.
so this dude is overseas fighting for his country while some bags take everything his wife and him have been working for their entire lives over an unpaid $600 debt??
What a load of crap!
You know what people should do? Start donations for this family. It doesn't take much, say like 5 dollar donation each to help them regain what those ers practically stole from them.
The wife should have burned the house to the ground. Or at least taken a sledgehammer to as much of it as possible.
That doesn't do anything to punish these assholes for robbing this guy for $2900.
The problem is state law allows HOAs to pull this sort of crap. There is no way in they should be able to foreclose no matter how much ing money they are owed. They could allow HOAs to attach liens that would be resolved at such time as the houses are sold - everyone gets their money and nobody gets screwed out of a house.
I read another version of this story (Dallas Morning News?) and interestingly there were a number of these HOA foreclosed homes that the same guy ended up paying pennies for the dollar on and then turning over immediately for $100K or more of profit each time. You tell me there's not something ed up there ... no way in a home in this neighborhood would sell for $3500 at a foreclosure auction unless nobody but the HOA and this guy knew when and where it was going to happen.
Power can be a corrupting factor in any venture. Government or not. One reason we need less laws and regulations, because they get abused.
When a bank forecloses, they sell the house, take what's owed to the bank, and give the rest, if any, to the foreclosure victim.
There Otta Be A Law
The HOA probably had a deal with the house flipper who may have given the HOA some kickback to be notified in private of the deal.
The article in the OP hinted that some of the people buying these houses had connections to the HOA's in question.
I seriously would consider murder if someone scammed me out of my house like this. "Temporary insanity" would'nt be a high bar to clear for a jury based on that, even if I was dumb enough to get caught...
My guess is the buyer was an attorney that was in on the deal and someones getting a kickback.
I would have no problem with this whatsoever.
This is a case where laws have clearly been written that act against the public good. I am not normally into conspiracies, but I smell some business interests pushing for these laws at the state level under the radar.
It does not surprise me that some scammer has discovered this rather nasty trick and taken advantage of it.
HOA's suck.
And what a great way to maintain your fellow homeowners' property values by selling that house for $3500.
Doesn't really make sense to me.
You want less regulations on HOA? You see the they're pulling right now, and you want them to have more leeway?
And I like how RG managed to work in a GOP " you" jab at the end of his post.
Please step back a moment and smell the truth.
They entered into a legal contract. When we start making laws to protect people from their own stupidity, where does that end?
Obviously, someone has a deal to foreclose on these houses and get a kick back on the profits when they are flipped. That being said, I do not understand the wife.
She must be good in the sack cuz she must be dumb as a box of rocks to have just ignored all the certified letters she would have gotten before the foreclosure could be official.
This surprises you because .... ?
Sure, it's in the contract, but how American is it to take a man's house when 1) the house itself is totally paid for 2) he's fighting for his country abroad 3) the money he owes is not anywhere equal to the money his house is worth 4) the people he owes money to are bureaucrats that don't offer any service to him other than to say "you can live here if you pay us off twice a year" 5) there's obvious shady business involved in the auctioning and selling of the house?
Regardless if his wife is dumb as to not open the certified letters she presumably signed off more, all you Tea Party folks should sack the up and protest HOAs because they don't do for anyone. Go ahead, take away my pool rights and don't invite me for pizza nights at the community center...suck my you ing liberal s!!!!
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