By Deborah Goonan, Independent American Communities
I’ve been following this story for months. Kudos to Kendra Conlon and WTSP for reporting on HOA foreclosure injustice in Florida.
There’s definitely something very wrong with our social values when we allow our legal system to take away a family’s home and 11 years’ worth of equity, all over a single forgotten HOA payment of $150.
Why is a private homeowners association allowed to foreclose on an occupied home over such a paltry sum of money?
How does an assessment debt of $150 balloon to more than $4,000? I can tell you that Rivercrest Community Association did not receive thousands of dollars after the HOA foreclosure sale. They received $150 plus late fees and interest. The bulk of the HOA lien money went to pay HOA attorney Charles Evans Glausier of Bush Ross P.A.
And a third party investor purchased a $270,000 home for less than $19,000.
At HOA auctions, Florida law does not require a minimum bid that is close to the assessed value of the property. Therefore the courts do not view inadequate sale price as a valid reason to set aside a sale.
And, as explained in a previous blog, Rivercrest Community Association does not even use its HOA fees to maintain essential infrastucture, because the Rivercrest CDD handles those functions. The HOA primarily enforces CC&Rs and architectural controls.
Because CDD payments are included on the property tax bill, the Lopezes were paying these in escrow to the mortgage lender. According to Hillsborough County records, CDD fees and property taxes are paid in full and up to date.
Family forced from home over $150 HOA fee
A $150 HOA fee from 2009 mushroomed into an eviction.
Kendra Conlon, WTSP 12:27 AM. EST February 23, 2017
A Hillsborough County judge handed down a heartbreaking decision for a Riverview family. The Lopezes are being forced from their home by foreclosure, all because of a $150 missed homeowners’ association payment.
“This is my home and where I grew up. This is where God put me,” said 8-year-old Jessica Lopez through tears.
Read more (VIDEO):
As a reminder, WTSP reported on other homeowners, who say that Rivercrest HOA uses aggressive tactics, and charges exorbitant fees, threatening foreclosure over small past due assessment balances – including assessments debts that were passed onto unsuspecting buyers.
Riverview homeowners say HOA taking homes
Once again, WTSP and Florida homeowners are calling for legislative change that prevents undue harassment and shake down of property owners, and that also prohibits such cruel and unusual punishment for relatively small unpaid debts to the HOA.
No one should lose their home over an unpaid lien that is a miniscule fraction of the home’s value, unless, of course, the property owner has chosen to abandon the home in a strategic default. Clearly, this is not the case for the Lopez family.
I would add that all states should outlaw unjustified enrichment of foreclosure attorneys, as well as grossly inadequate sale prices at foreclosure sales. Both of these conditions create perverse incentives to harm homeowners in pursuit of personal financial gain.
Furthermore, defendent homeowners should be given the option of post-sale foreclosure redemption, a consideration that is common in the case of property tax sales, but virtually unheard of following HOA foreclosure sales.
Readers should be aware that, although this example is in the state of Florida, most other states have similar laws that allow HOA foreclosure for relatively small liens.
A few states have enacted statutes that require a minium level of assessment delinquency before the HOA can initiate foreclosure on the lien, and have provided a period of redemption that allows the owner to buy back their home after foreclsoure.
In California, for example, unpaid assessments must exceed $1,800 or be more than 12 months delinquent prior to intiating HOA foreclosure. The owner is entitled to a 90-day to 12-month redemption period, subject to specific circumstances.
However, even these concessions are relatively minor, given the high value of real estate in California, and the fact that attorney’s fees and costs can significantly bloat the size of the HOA’s lien.