Prompted by reports of families losing their homes over as little as $120 in unpaid fees, a state Senate committee on Tuesday began hearing testimony on alleged foreclosure abuses by homeowners associations.

The private neighborhood groups regulate everything from how homeowners paint their houses to what ornaments they put on their front lawns. The associations, which govern developments that are home to about 8 million Californians, also collect fees and maintain common areas such as private streets, pools and parks. 

In recent years, a growing number of families have complained of capricious and heavy-handed enforcement by their associations and have pushed for laws to limit their power. Among the most contentious issues is the right association boards have to foreclose on homes.

By law, homeowners associations can put a lien on the home of a member who owes fees and, if the debt is not paid, put the house up for auction. The only recourse for the homeowner is to sue to block the action.

In some cases, associations have used foreclosure to collect very small sums.

Last year, for example, a retired couple lost their Calaveras County home to foreclosure by their homeowners association because they failed to pay a $120 assessment fee.

"It never occurred to them that they could lose their home over $120," the couple's son, Joel Radcliff, told the Senate Housing and Community Development Committee on Tuesday. "Every penny of their life savings went into this home."

He said his parents, Tom and Anita Radcliff, had fallen behind on their bills because his father had health problems. They tried to pay the assessment, including the late fees, last summer, but the $156 check they delivered was $1.50 short, Joel Radcliff said. The collection agency refused to accept it. Eventually, the amount owed had mushroomed to nearly $2,000 with interest and late charges.

In December, their house — which is on a 3-acre lot and was appraised at $285,000 — was sold for $70,000. The Radcliffs, who were given eviction notices last month, are preparing to sue to regain their home, said their attorney, Michael Macomber.

A survey by Sentinel Fair Housing, an advocacy group, concluded that homeowners associations accounted for about 12% of all foreclosure actions filed in five Northern California counties in 2001. 

In 92% of the cases involving homeowners associations, the amount owed was less than $5,000. Most of these homeowners paid what was owed, but nearly 1 in 10 had a home sold at auction.

Steve Cogswell, the group's associate director, testified that in many cases homeowners who have a dispute with their associations over an assessment or charge don't challenge them in court because legal fees cost more than the amount owed.

Skip Daum, a spokesman for Community Associations Institute, a trade group of homeowners associations, defended foreclosure as a critical tool to force collection of assessments from delinquent homeowners. If they are not made to pay, the burden to maintain the community would fall on other homeowners, he said.

"Losing your home is always tragic," he said, but foreclosure powers "are in the best interest of responsible homeowners and the community overall."

Committee Chairwoman Sen. Denise Moreno Ducheny (D-San Diego) said lawmakers would hold further hearings this year and study possible legislation to restrict foreclosure powers by homeowners associations.