This looks like a lawsuit to me. Can you spell alienation from property, invasion of privacy and unfettered enjoyment of private property, intentional infliction of emotional distress, among other potential causes of action?
This Board action brings new meaning to the term ENFORCEMENT. Consequently what’s next, an HOA lock on our mail boxes ?
So was this the best business judgment decision that the Board could come up with ? Consequently is granting HOAs a higher priority lean for unpaid assessments really a good idea ? … I Was 2 weeks late. They then doc'd me $800 in attorney fees... In addition does this seem reasonable to anyone other than those receiving the fees ?
What happened to the old methods of debt collection which didn’t involve the fastest, most expensive and confrontational methods available, did they disappear ? Because foreclosure powers automatically starts a feeding frenzied that quickly overwhelms members with a mountain of fees that they often cannot recover from in time.
Finally it’s understood that association assessments are owed without question or the CID will become insolvent and like any debt, there should be consequences. Except who should decide what these consequences should be and more important, in who’s best interest ?
If one defaulted on a credit card, the bank does not come to one's house and take all of your stuff.
When the fees are paid, the homeowner still won't be equal because they've been denied access to their own home. There's no way to remedy that. The late fees are supposed to compensate the HOA for the late revenue, but who compensates the homeowner for the forever-lost use of property and/or amenities?
This indeed does seem like a complete, illegal even, overreach and abuse of power.
An HOA or condo association isn't just "any creditor." They are secured creditors, meaning that your obligation to pay them is secured by an interest in your property. They have a security interest in your property, just like your bank has a mortgage, which is a security interest in your property. You don't pay, they get the property, to the extent of the unpaid secured debt.
How did your association get that security interest? In your CC&Rs, you agreed to give that security interest to the association. You may not like that, but that's the way the law sees it. It's in the document. Just like the bank's foreclosure rights are in the note and the mortgage, and that right is also on the deed (just as we often call your CC&Rs "deed restrictions")--same idea.
But your credit card company and the hospital are unsecured creditors. If you don't pay, they have to get a judgment against you and then execute it by seizing your assets (bank accounts, wages, baseball card collection, etc.), which is hard and often not very productive. They don't have any existing interest in your property that they can quickly and easily foreclose on to satisfy the debt.
The reason associations get this treatment? Two reasons: one is the contract, and the other is state statutes that authorize these lien rights and establish the priority of the various liens--first mortgages and later ones, taxes, association assessments, bills owed to others, etc.
The idea is that if Wells Fargo Credit Card Services loses some money, they are a big corporation that can chase down creditors, fight with them, sell the debt to a collection agency, write off the loss, and generally make it part of their business. But if your HOA doesn't get paid, the rest of the neighbors have to pay it, and that can start everybody down a slippery slope. And nobody expects your HOA or condo association, run by volunteers with day jobs, to chase down the assets of everybody who doesn't pay their assessments.
That's the explanation--you may not like it, but there it is.
Anonymous said: "The reason associations get this treatment? Two reasons: one is the contract, and the other is state statutes that authorize these lien rights and establish the priority of the various liens"
First off, these are not "associations" - they are incorporated entities and are wholly distinct from the homeowner or any neighbor.
Second, the "contract" is not a contract but rather a servitude of questionable constitutionality. The debts you refer to are incurred by the HOA corporation, not the homeowner and they are not purchase money debts nor are they typically for fixtures, maintenance, or improvements to the home. Instead they are "forward looking" in nature and unlimited in number of terms or amounts. As such these assessment demands should be recognized as unconstitutional "taxes". Corporations do not have the constitutional authority to impose a tax.
Anonymous said "But if your HOA doesn't get paid, the rest of the neighbors have to pay it, and that can start everybody down a slippery slope."
Well the VENDORS would certainly like everyone to believe that the HOA corporation must survive and maintain "services" at the same or higher levels. However, that is a false premise to begin with. Other alternatives are eliminating services (frequently there are not any "services" provided to the homeowners to begin with) or eliminating the HOA corporation, or making the HOA corporation survive on a voluntary membership basis. The industry absolutely fears all three of these. If it was so desirable to begin with, then see how many homeowners want these things when they have a choice!
Anonymous said: "Just like the bank's foreclosure rights are in the note and the mortgage, and that right is also on the deed (just as we often call your CC&Rs "deed restrictions")--same idea."
No, it is not the same idea at all. The bank provided purchase money for the home. The HOA corporation did not. In fact, the HOA "debt" only arises AFTERwards and such debt is the debt incurred by the HOA corporation board, not the homeowner.
A typical debt associated with a lien can be paid off and the lien released. With an HOA "lien" however, the debt can never be paid off, the periodic amounts "owed" invariably increase and continue on into perpetuity. The only other entity that has something even close to being similar is a political subdivision of the state which has taxing powers. However, HOAs are not governmental entities and have no authority to tax under any state constitution. Accordingly, this private taxation must be recognized as unconstitutional and eradicated.
"And nobody expects your HOA or condo association, run by volunteers with day jobs, to chase down the assets of everybody who doesn't pay their assessments."
Ditto many local governing bodies in the U.S. that are also run by volunteers or those who receive a modest stipend. But they use the tax collector and due process to collect delinquent property taxes, not private attorneys.
EdgewaterIsle.com said..."If one defaulted on a credit card, the bank does not come to one's house and take all of your stuff."
On a tangent about bill collectors, yesterday's New York Times reports:
www.nytimes.com/2011/06/13/business/13collect.html "Debt Collectors Ask to Be Paid a Little Respect" June 13, 2011, p. A1 ... “There really ought to be a law on how consumers behave towards debt collectors,” said [Mark] Neeb [president of ACA Internaional] ... After several years in which the overzealous tactics of debt collectors have been the focus of regulators and media alike, ACA International has beefed up its lobbying operation in Washington to pursue a wish list of laws and regulations that it would like changed. ... The mission has taken on some urgency. Next month debt collectors will come under the supervision of a hard-nosed new regulator, the Consumer Financial Protection Bureau. Until now, the profession had been regulated by a relatively toothless Federal Trade Commission, which had the ability to crack down on rogue debt collectors but could not write rules and regulations for the industry.
The N.Y. Times story goes on to report that (emphasis added):
"Third-party debt collectors are typically hired by a store, cellphone company or a bank, to collect a debt that has become delinquent. Often, huge portfolios of delinquent debt are sold to a debt buyer for pennies on the dollar; the debt buyer, in turn, may hire a collection agency, or a law firm specializing in debt collection."
One of the readers had comment that is so brilliant that it ought to be a law:
"Why can't the primary debt holder, instead of selling the debt to a collection agency, allow the debtor the chance to purchase his/her debt at the same price and terms the collection agency is bidding?" -Hank. June 13, 2011. 9:40 AM. Comment # 37.
Why not indeed, if the original creditor is already willing to sell the debt for "pennies on the dollar"?
In your CC&Rs, you agreed to give that security interest to the association."
Yes, I am quite familiar with CC&Rs, having been imprisoned in a HOA for 15 years, only escaping within the last few years.
Your said that "I agreed to give them a security interest." My HOA had lien rights, could charge late fees and lawyer fees, and they could revoke pool access and voting rights, but NO WHERE does it say anything like they will deny any owner access to their house, including driveway. In fact, my former HOA has recently been issued a "Certificate of Sale" on a non-paying owner (see California's foreclosure laws on how that works), but they are not placing tons of concrete in front of that owner's garage.
There are monetary and civil remedies available to the HOA to use against homeowners who are late. The remedy this HOA took, to place 3 cement blocks in a driveway, I will bet, are in NO CC & Rs anywhere in this country. What this HOA did is outrageous beyond words.
Hey guys - this is Brent Brooks the homeowner here. thanks for your thoughts on this and a powerful group is forming in facebook in regards to this and many people are coming out of the woodwork here. Please friend me: https://www.facebook.com/blankstage
11 comments:
This looks like a lawsuit to me. Can you spell alienation from property, invasion of privacy and unfettered enjoyment of private property, intentional infliction of emotional distress, among other potential causes of action?
Welcome to the Hotel Privatopia.
You can checkout any time you like.
But you can never leave!
This Board action brings new meaning to the term ENFORCEMENT. Consequently what’s next, an HOA lock on our mail boxes ?
So was this the best business judgment decision that the Board could come up with ? Consequently is granting HOAs a higher priority lean for unpaid assessments really a good idea ? … I Was 2 weeks late. They then doc'd me $800 in attorney fees... In addition does this seem reasonable to anyone other than those receiving the fees ?
What happened to the old methods of debt collection which didn’t involve the fastest, most expensive and confrontational methods available, did they disappear ? Because foreclosure powers automatically starts a feeding frenzied that quickly overwhelms members with a mountain of fees that they often cannot recover from in time.
Finally it’s understood that association assessments are owed without question or the CID will become insolvent and like any debt, there should be consequences. Except who should decide what these consequences should be and more important, in who’s best interest ?
If one defaulted on a credit card, the bank does not come to one's house and take all of your stuff.
When the fees are paid, the homeowner still won't be equal because they've been denied access to their own home. There's no way to remedy that. The late fees are supposed to compensate the HOA for the late revenue, but who compensates the homeowner for the forever-lost use of property and/or amenities?
This indeed does seem like a complete, illegal even, overreach and abuse of power.
"If one defaulted on a credit card, the bank does not come to one's house and take all of your stuff."
See Evan McKenzie's comment at http://privatopia.blogspot.com/2010/04/lawyer-be-aggressive-with-your.html (you will have to scroll down, it's like the 12th comment):
An HOA or condo association isn't just "any creditor." They are secured creditors, meaning that your obligation to pay them is secured by an interest in your property. They have a security interest in your property, just like your bank has a mortgage, which is a security interest in your property. You don't pay, they get the property, to the extent of the unpaid secured debt.
How did your association get that security interest? In your CC&Rs, you agreed to give that security interest to the association. You may not like that, but that's the way the law sees it. It's in the document. Just like the bank's foreclosure rights are in the note and the mortgage, and that right is also on the deed (just as we often call your CC&Rs "deed restrictions")--same idea.
But your credit card company and the hospital are unsecured creditors. If you don't pay, they have to get a judgment against you and then execute it by seizing your assets (bank accounts, wages, baseball card collection, etc.), which is hard and often not very productive. They don't have any existing interest in your property that they can quickly and easily foreclose on to satisfy the debt.
The reason associations get this treatment? Two reasons: one is the contract, and the other is state statutes that authorize these lien rights and establish the priority of the various liens--first mortgages and later ones, taxes, association assessments, bills owed to others, etc.
The idea is that if Wells Fargo Credit Card Services loses some money, they are a big corporation that can chase down creditors, fight with them, sell the debt to a collection agency, write off the loss, and generally make it part of their business. But if your HOA doesn't get paid, the rest of the neighbors have to pay it, and that can start everybody down a slippery slope. And nobody expects your HOA or condo association, run by volunteers with day jobs, to chase down the assets of everybody who doesn't pay their assessments.
That's the explanation--you may not like it, but there it is.
Anonymous said: "The reason associations get this treatment? Two reasons: one is the contract, and the other is state statutes that authorize these lien rights and establish the priority of the various liens"
First off, these are not "associations" - they are incorporated entities and are wholly distinct from the homeowner or any neighbor.
Second, the "contract" is not a contract but rather a servitude of questionable constitutionality. The debts you refer to are incurred by the HOA corporation, not the homeowner and they are not purchase money debts nor are they typically for fixtures, maintenance, or improvements to the home. Instead they are "forward looking" in nature and unlimited in number of terms or amounts. As such these assessment demands should be recognized as unconstitutional "taxes". Corporations do not have the constitutional authority to impose a tax.
Anonymous said "But if your HOA doesn't get paid, the rest of the neighbors have to pay it, and that can start everybody down a slippery slope."
Well the VENDORS would certainly like everyone to believe that the HOA corporation must survive and maintain "services" at the same or higher levels. However, that is a false premise to begin with. Other alternatives are eliminating services (frequently there are not any "services" provided to the homeowners to begin with) or eliminating the HOA corporation, or making the HOA corporation survive on a voluntary membership basis. The industry absolutely fears all three of these. If it was so desirable to begin with, then see how many homeowners want these things when they have a choice!
Anonymous said:
"Just like the bank's foreclosure rights are in the note and the mortgage, and that right is also on the deed (just as we often call your CC&Rs "deed restrictions")--same idea."
No, it is not the same idea at all. The bank provided purchase money for the home. The HOA corporation did not. In fact, the HOA "debt" only arises AFTERwards and such debt is the debt incurred by the HOA corporation board, not the homeowner.
A typical debt associated with a lien can be paid off and the lien released. With an HOA "lien" however, the debt can never be paid off, the periodic amounts "owed" invariably increase and continue on into perpetuity. The only other entity that has something even close to being similar is a political subdivision of the state which has taxing powers. However, HOAs are not governmental entities and have no authority to tax under any state constitution. Accordingly, this private taxation must be recognized as unconstitutional and eradicated.
"And nobody expects your HOA or condo association, run by volunteers with day jobs, to chase down the assets of everybody who doesn't pay their assessments."
Ditto many local governing bodies in the U.S. that are also run by volunteers or those who receive a modest stipend. But they use the tax collector and due process to collect delinquent property taxes, not private attorneys.
EdgewaterIsle.com said..."If one defaulted on a credit card, the bank does not come to one's house and take all of your stuff."
On a tangent about bill collectors, yesterday's New York Times reports:
www.nytimes.com/2011/06/13/business/13collect.html
"Debt Collectors Ask to Be Paid a Little Respect"
June 13, 2011, p. A1
...
“There really ought to be a law on how consumers behave towards debt collectors,” said [Mark] Neeb [president of ACA Internaional]
...
After several years in which the overzealous tactics of debt collectors have been the focus of regulators and media alike, ACA International has beefed up its lobbying operation in Washington to pursue a wish list of laws and regulations that it would like changed.
...
The mission has taken on some urgency. Next month debt collectors will come under the supervision of a hard-nosed new regulator, the Consumer Financial Protection Bureau.
Until now, the profession had been regulated by a relatively toothless Federal Trade Commission, which had the ability to crack down on rogue debt collectors but could not write rules and regulations for the industry.
The N.Y. Times story goes on to report that (emphasis added):
"Third-party debt collectors are typically hired by a store, cellphone company or a bank, to collect a debt that has become delinquent. Often, huge portfolios of delinquent debt are sold to a debt buyer for pennies on the dollar; the debt buyer, in turn, may hire a collection agency, or a law firm specializing in debt collection."
One of the readers had comment that is so brilliant that it ought to be a law:
"Why can't the primary debt holder, instead of selling the debt to a collection agency, allow the debtor the chance to purchase his/her debt at the same price and terms the collection agency is bidding?"
-Hank. June 13, 2011. 9:40 AM. Comment # 37.
Why not indeed, if the original creditor is already willing to sell the debt for "pennies on the dollar"?
"Anonymous: June 14, 2011 12:53:00 PM CDT
In your CC&Rs, you agreed to give that security interest to the association."
Yes, I am quite familiar with CC&Rs, having been imprisoned in a HOA for 15 years, only escaping within the last few years.
Your said that "I agreed to give them a security interest." My HOA had lien rights, could charge late fees and lawyer fees, and they could revoke pool access and voting rights, but NO WHERE does it say anything like they will deny any owner access to their house, including driveway. In fact, my former HOA has recently been issued a "Certificate of Sale" on a non-paying owner (see California's foreclosure laws on how that works), but they are not placing tons of concrete in front of that owner's garage.
There are monetary and civil remedies available to the HOA to use against homeowners who are late. The remedy this HOA took, to place 3 cement blocks in a driveway, I will bet, are in NO CC & Rs anywhere in this country. What this HOA did is outrageous beyond words.
Hey guys - this is Brent Brooks the homeowner here. thanks for your thoughts on this and a powerful group is forming in facebook in regards to this and many people are coming out of the woodwork here. Please friend me: https://www.facebook.com/blankstage
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