What You Don’t Know About Your Homeowners Association Can Hurt You
Homeowners Associations are common all around the United States and are supposed to work for the betterment of their neighborhoods and the families that live there. While some are virtually non-existent, others are extremely active and have a variety of regulations and rules you and your house must follow.
Sounds good right? Who wants bright neon green houses or yards with weeds so high you can lose small children in them? HOAs are supposed to make sure that everyone is aware of the rules and that they are followed so everyone’s home values stay as high as possible.
But sometimes HOAs cross the line and do some pretty heinous things. If you’re like most of us, you would never think that your neighbors would or could (legally) do such things, but you’d be shocked at what’s going on out there.
When HOAs Go Bad
One of the craziest examples about HOA’s abusing their power is when it comes to them having the power to foreclose on homes. According to a 2010 article on MotherJones.com, “In 33 states, (HOAs) can foreclose without a court order over a few hundred dollars in unpaid dues. The process in Texas is especially quick—just 27 days.”
This is what Michael Clauer, and active duty Texas soldier, found out when he lost his home while serving in Iraq. After being deployed, his wife fell into a deep depression. She didn’t open her mail, take phone calls and could only focus on caring for her two children (one of which had a severe seizure disorder). During that time, she failed to pay $800 in HOA fees and the organization started the foreclosure process on the $300,000 house, which was owned free and clear by the family.
The Clauer’s were only sent a few letters while other homeowners who owed less money were paid personal visits to work out the lack of payments. The HOA completed the foreclosure process while the Clauers tried to fight it legally and sold it to third party who then sold it again.
A Happy Ending
After tons of bad press, the Clauers prevailed and were able to get their house back. There is a law called the Servicemembers Civil Relief Act, which basically stops foreclosures on active-duty troops and they used this to come to a financial settlement with the HOA.
But if Mike had not been on active duty, they might have been out of luck. There have been allegations that this HOA and others like it are specifically targeting people who own their homes so they can foreclose on them and flip them for big money.
Clearly, states that allow these types of foreclosures need to adjust their laws to make it so a neighborhood organization cannot take your home over a couple hundred dollars in unpaid fees. While we would like to think that our neighbors would not do something like this to us, it’s clear that some people don’t care and need their moral compasses adjusted.