Thursday, December 27, 2012

Florida homeowners foreclosing on banks - Dec. 26, 2012

Florida homeowners foreclosing on banks - Dec. 26, 2012:
  "Hundreds of homeowners and condo associations are foreclosing on banks that have failed to pay dues and other expenses on the properties they've repossessed."
Banks have this unfortunate habit of foreclosing on a condo or HOA unit and not paying the monthly assessments.  Why should they be treated differently than any other delinquent owner?


IC_deLight said...

The "homeowners" are not foreclosing on the banks. The foreclosures are performed by vendors claiming to represent the HOA corporations and condo corporations - NOT the "homeowners".

The HOA name or label does NOT refer to the homeowners as a group. The term "association" is used and deliberately so to market the HOA as a "group of homeowners", but it is not.

Over 50 years ago (near the birth of the HOA burdened subdivision) states threw out the "aggregate" theory of unincorporated organizations such as partnerships and associations in preference for the entity theory. Under the entity theory, the unincorporated organization is an entity separate and apart from its constituent members.

The term "association" is in the name to imply that the aggregate theory is applicable and unfortunately the news media, courts, juries, prospective purchasers, and even the involuntary members are misled into believing that the HOA refers to the homeowners.

However that proposition has not been true for 50 years EVEN if these were unincorporated associations. The organizations are NOT unincorporated - you just won't hear the industry folks referring to the Corporation.

In fact these are HOA Inc. and the corporation has NEVER been merely a convenient way of referring to the members/shareholders as a group. A corporation has always been an entity separate and distinct from its members/shareholders.

People might not want to buy (in areas where they have choices) if they realized that it means rule by private corporation.

Mike Reardon said...

I actually like this new adventure in HOA hostility.
Going after the banks is going to be a lot harder than going after some elderly, financialy distressed homeowner; it may get interesting.
I would like to see the banks threaten a nuclear option and say.... refuse to finance HOA property. Better yet, use their considerable weight to lobby for legislation that would nueter and de-fang these HOAs.
MAD worked pretty well with Stalin and his prodgeny. It is a pity that these HOAs are not nearly as ethically run.