Article Courtesy of FOX NEWS
By Robert Massi
Published December 18, 2015
I’ll be honest.
Most of the time I am advising homeowners on how to protect themselves from
their HOA. But when I sat down with Marshall Goldstein in a beautiful
development in Florida, I found myself on the other side of the equation.
Homeowners associations (HOAs) are the governing bodies that may
exist in single-family housing developments or condo and
townhouse complexes. Their stated purpose is to help maintain
good relations among neighbors, keep property values stable and
provide a mechanism for democratic decisions about expenditures
for repairs and amenities, such as tennis courts, swimming pools
and golf courses. HOA boards consist of volunteer members who
may or may not have the professional expertise needed to deal
with issues that arise. |
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In some cases of foreclosure, homeowners will choose to walk away from their
homes. Having run out of hope, they step aside, and the lender steps in and
takes over the property. If a single house in a neighborhood is abandoned, the
homeowners immediately adjacent to the property will be most affected. If
multiple houses are left empty and unattended, the HOA is likely to face
significant safety issues, and the value of the entire community is put at risk.
If a foreclosed home is becoming an eyesore and you are on an HOA board, you can
take specific steps to help your organization reclaim and restore the
neighborhood without compromising the fiscal stability of the HOA:
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In most cases, the people who feel the impact of
abandoned homes are the ones who confront the HOA and demand action. But the
HOA’s rights are limited. While assuring association members that you are
taking the necessary steps to protect the quality of their neighborhood, you
need to let them know the limits of your authority up front.
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Decide your level of financial commitment. Can you afford
to use HOA monies to update and repair an abandoned home? Will the
neighborhood be able to support future assessments to deal with rehabbing
neighborhood eyesores?
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Assess the condition of the home before deciding if you
want to exercise your rights under the laws of your state. This poses a
particular problem because, in most cases, unless there is an apparent
safety or health issue, HOAs cannot enter a private residence without a
court order. You’ll be able to identify issues with the exterior, but you
probably won’t know what’s going on inside the house.
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So what can you do if you can assess the house only from
the exterior? You need to bring in outside authorities. The HOA can and
should contact the appropriate city division to ask it to enforce safety or
code violations that apply to the outside of the house, such as covering an
unused pool that poses a safety hazard. In this way, at least, the HOA is
taking a proactive role in protecting the integrity of the neighborhood and
the adjacent property owners.
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In almost every state, an HOA has the power to place
liens on property for nonpayment of membership dues. Once the lien is filed,
and with legal counsel representing the board, it can exercise its
foreclosure rights (either judicial or non-judicial, depending on the
state.)
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Once the HOA has foreclosed, depending on the integrity
of the home, it is possible in most cases to attract investors who will
purchase it – sometimes sight unseen. The prevailing issue then becomes that
the lenders may decide to move forward with the foreclosure, and the new
owners will have to deal with them. Recent rulings in the Nevada Supreme
Court have offered relief in this situation, declaring that if the lender is
on notice of the HOA-initiated foreclosure and doesn’t act, the first
mortgage is expunged.
From everything I’ve seen, this can be an HOA’s biggest challenge. As a board
member, you need to make decisions that are in the best interest of the
neighborhood. And, based on most cases I’ve seen, you need to realize that you
can’t please everyone. But remember: Your role on the board may be that of a
volunteer helping to look out for the interest of others, but your personal
financial security is tied up in the health of your neighborhood as well. |