Sunday, July 24, 2011

Ranlo family frustrated after HOA foreclosed on their home for unpaid dues

Michelle Roberts says her family fell victim to an HOA board that refused to recognize the financial hardship they were experiencing. The board held them to unfair expectations of paying not only the original dues that were in arrears, she said, but also the charges that mounted from attorney hours, court filings and assessments.

Additional fees have taken the $975 they originally owed for HOA dues and mushroomed their debt to more than $6,000. It’s money they don’t have, she said.
Times are tough for a lot of people and this situation is repeating throughout Privatopia as the economy struggles to return to health nearly three years after financial markets imploded in the fall of 2008. HOA assessments while typically substantially lower than property taxes can mushroom once delinquent when the community association industry takes its cut.


Anonymous said...

"Since HOAs are very local and small, participants are often neighbors and hence have incentive to settle disagreements in a civil manner."

-"Free-Market Alternatives To Zoning" (February 28, 2009)

Anonymous said...

From the story, which is far more horrifying than Fred's summary:

More than five years after they moved into a new home in Ranlo, Darin and Michelle Roberts got a retroactive bill for homeowners association dues they’d never paid, but apparently never knew they owed.
HOA dues in Mountain View are $175 a year. But the HOA board realized in early summer 2009 no dues had been paid since the family moved in. That’s apparently because the house was built by the now-defunct company KB Homes, which built some lots in the subdivision but never reported the sales of the homes, Sellers said. So an annual bill was never sent to 104 Ranlo Ave.

“Often builders are exempt from assessments, so they’re not paying,” he said. “So until the association or manager gets notice from the builder that the home has been sold, they have no reason to know someone’s in there and should be paying (HOA dues).”
Roberts said she and her husband were frustrated by the additional costs they incurred. Each time they requested a new payment plan, they were charged $45. Fees for the filings and the work done by paralegals and attorneys mounted.

The Right To Own Your Own Home said...

As a Managing Shareholder of Katzman Garfinkel & Berger (KG&B), I have witnessed the dramatic effect that the downturn in the economy has dealt many communities here in South Florida and across the state.. . .

History has taught us, however, that there are always those who survive and even thrive in tough times! My team of community association attorneys and I started to ask ourselves: What should communities be thinking about right now in terms of saving money, recouping lost money and even making money?. . .

Rethink your traditional collection policy in light of today’s economic realities. . .

Be aggressive with your foreclosure actions.

source: Donna Berger, Community Advocacy Network
"Time To Tighten Up Your Collection Policy" April 01, 2010
discussed here at

And please see my web page about H.O.A. foreclosure at . While the material is nothing new to most readers of this blog, feedback is appreciated (since I don't have an editor working for me, and the web pages are still a work in progress).

Anonymous said...

Try owing no monies, had no contract and $18,000 in legal fees and illegal foreclosure. For what? To who? Not, NC, but, Pennsylvania, where these foreclosures are supposed to be illegal. I am still awaiting an explanation from the "responsible parties, " and anyone who is supposed to be investigating. Yes, there needs to be pro bono attorneys in every locale, and state for far too many of these horrific acts against innocent and unsuspecting homeowners.

Anonymous said...

So obviously the assessments were not "vital" to the operation of the HOA such that the HOA needed the power of foreclosure to collect assessments. After all the builders (and certainly the declarant) were exempt from ever paying.

The VENDORS (HOA management company and HOA attorney) are the entities that needed the HOA to have foreclosure powers so that the vendors could demand thousands and thousands of dollars (many multiples of the alleged debt).

Wonder who the management company is?

Did this HOA preserve value for these homeowners or were the HOA and its vendors the cause of these homeowners losing a considerable amount of money?

To the extent that HOAs can be avoided and to the extent that the existence isn't hidden from a prospective purchaser, I'll bet that this couple will avoid HOA-burdened property and teach others to do the same.

Seems like the only winners here are the HOA management company and HOA attorney. The homeowners lost considerably and their "neighbors" aren't going to benefit from this either.

Anonymous said...

The community association industry isn't taking "a cut". To the contrary, they are responsible for exploding the alleged debt by a multiple of 6 and then trying to walk with 85%+ of that. They aren't taking a cut of the existing debt but rather creating another one out of thin air that is six times bigger.