Tag: foreclosure

NC reform bills need your support

Three very material and important bills seeking meaningful HOA reforms are before the North Carolina General Assembly (legislature): H311, S312, and H542.  (See ‘There is no oversight’ Proposed bills call for changes to HOAs in North Carolina). These bills address the two categories of reform legislation as I have defined them: constitutional and operational.

It has been my experience over some 23 years that reform legislation falls into two categorical levels: constitutional seeking to change the systemic HOA scheme, and operational seeking to apply the existing day-to-day laws and governing documents in a fair and just manner.

The average homeowner does not quite understand the broader constitutional issues but well feels the effects of the current day-to-day conditions. AN example of operational reform would be to change the time frame or approval percentage of an existing covenant. It’s a procedural change.

H311,

An act to establish a community association oversight division in the office of the attorney general.  In short, the AG is authorized to investigate HOA wrongdoing and to take remedial action including legal action, if so determined. The division is a rulemaking body —  adopt and change rules —  to carry out its authority. It is a constitutional 14th Amendment due process and equal protection of the laws bill.

S312,

An act that requires notice of liens and the ability to foreclose. A lengthy bill to inform the homeowner that a lien has been placed on his property and the right to work out a repayment plan. While the right to foreclose is removed, the HOA can proceed with legal action to obtain payment of the debt, like garnishment, etc. It has a constitutional aspect in removing the right to foreclose – seen as a special law for a special entity, the HOA – and an operational aspect with respect to the procedures to follow in attempting to collect the unpaid assessments.

H542,

An act placing a limit on foreclosure and notice of a lien. The lien notice is similar to S312. The bill also sets a $2,500 minimum, or 1 year of unpaid assessments not paid within 30 days. It is an operational bill dealing with everyday procedures.

I prefer S312 over H542 since HOA foreclosure rights are unreasonable, against good public policy, and whose purpose is to serve as a punishment.  What right does a private entity, that has not advanced any hard cash like a bank, have to receive foreclosure payments far in excess of the HOA assessment debt that also includes exorbitant attorney payments not found in the public sector?

[Please feel free to repost with proper credit].

Dual HOA punishments: no homestead protection & foreclosure

The unreasonable HOA take all foreclosure right is a cruel and unusual punishment. (Courts finally realizing the gross injustice of HOA foreclosures). It is linked to the denial of the homestead exemption which in effect, crushes without exception the dastardly homeowner for not paying up! 

The Arizona Legislature is considering SB 1470 that attempts to restore homestead protection and correct this shameful treatment of good people. The opposition offers no justification, and the “general interest” argument is without merit as it denies fundamental rights. It’s a simple one-liner to be deleted. The case for the exemption was well stated in 2007 by California’s L. A. Times columnist Donie Vanitzian, JD,

“It is the titleholder’s personal asset that functions as a kind of perverse collateral, requiring the owner to pay assessments to the association-entity or lose his asset. . . . On purchase of that home and without anything more, the titleholder’s asset became a personal risk and personal liability for the owner. Instantly, the titleholder’s asset also became collateral for the association-entity.”

(California Common Interest Developments — Homeowner’s Guide, Donie Vanitzian, p. xviii, xix, Thomson – West 2006).

The Arizona 9 page, plus addendums, residential purchase agreement of some 400 lines does not inform the buyer that his home is security for the survival of the HOA. It is a statutory lien created by the state and not a voluntary agreement. On the other hand he is informed that his home is security for the mortgage.

Please protect the sanctity of the home and restore the homestead exemption to HOA homes.  Pass SB 1470!

Court requires constitutional due process in HOA foreclosures

The enlightenment and awareness that the US Constitution and its due process requirement extends to private government HOAs is gaining momentum. ”The writing is on the wall.”

In the recent Colorado appellate decision in Hummel (C&C Investments v. Hummel, 022COA42, April 14, 2022)  concerning proper notice of homeowner foreclosure by the HOA, the court surprisingly acted sua sponte —in the name of justice. The courts have repeatedly failed to invoke, in the pursuit of justice as it claims to be its fundamental purpose, its right to act sua ponte — on its own — raising discussions of issues not raised by either party.  

In Hummel the question arose as to whether or not the homeowner was given notice of impending foreclosure action by the HOA.  The HOA send a processor server who said he posted the notice in the newspaper, which is allowed under certain circumstances. She discovered her plight only when an eviction notice was pinned to her door. The question be determined was, What is proper, legal service?

While court rules require that the HOA serve notice, the court held that it “must also meet the mandates of due process before foreclosing on an individual’s property” and that,

“[I]t is not unreasonable to require a homeowners association to make a good faith, rather than a highly technical, effort to effectuate actual notice to a fellow neighbor before foreclosing on their property.”

In support of its opinion, the Court referenced the Colorado appellate court’s court view:

“Although an association is not the government, it serves “quasi-governmental functions” when enforcing covenants and must abide by the due process requirements of the United States and Colorado Constitutions.“

“[T]he United States Supreme Court has long held that when foreclosing a lien against an individual’s home, due process requires “notice [that is] reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.”

The appellate court found that the trial court failed to adhere to these principles before ordering a default judgment.

Now comes the downside to HOA paradise

It is only natural for a family suffering from the economic affect of the virus to save the mortgage payments first and to not pay their assessments. Members do not understand that the BOD is obligated not to allow this to happen and an increase in foreclosures looms a head. Their friendly, neighborly, smiling BOD directors will turn to foreclosures in an ineffective attempt to stem the tide.

We’re all familiar with the saying “there are no free lunches.” As the current economic crisis becomes more severe hitting the pocketbooks of many families, don’t neglect paying your HOA dues if you can. The survival of the HOA has always been a motivating factor of HOA boards supported by court rulings, and if assessment income drops as a result of decreasing member finances, guess what?

Whatcan the board  do? Stop maintenance, stop events, clubs, shows, etc. to save cash and help their members survive in an act of good neighbors. Hopefully you may have an enlightened, progressive BOD that ignores the advice of their HOA attorneys, who probably will scare them into you’re gonna get sued.

There are no free lunches living in an HOA.

 

 

Homeowner Advocate Research Research

FYI —-

I have collected, and read over the years, several hundred federal and state opinions on HOAs, state actors, mini-governments, foreclosure, due process, equal protection of the laws, constitutionality, etc.  Must be supreme court or appellate court records. It would be helpful to all if you would forward me a link to any important cases that you’ve come across so I could add them to my database.  Email as attachment to info@pvtgov.org, or fax to private fax at 480-907-2196.

Any questions can be sent by text or, preferably, email. No calls please.

Thanks.

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