HOAs- Manditory Or Voluntary?

HOAs- Manditory Or Voluntary?
by Takara Alexis

Numerous homeowners living in these voluntary associations have been happy until in recent times, when some busy-bodies felt that it was time for changes. These people come together and claim it's time to change the community.

Especially in the Orlando area homeowners complained recently that they received letters from their board, claiming that the former voluntary association has been changed into a mandatory association, new deed restrictions have been established and you must pay your dues immediately. In a second and third letter threats of liens, foreclosures etc. have been added to these demands. And all under the cover of a majority vote.

According to some Florida Court Rulings this is not the way it works. If you are a member of a voluntary association you can't be forced without your agreement to become a member of a mandatory association. Don't let these busy-bodies threaten or intimidate you! They have zero right to do so. As long as the deed to your property doesn't say that your property belongs to a mandatory association, nobody can force you.

Numerous homeowners living in mandated properties would only be too happy to be able to get away from them. A lot of law-suits all over the nation are proof of all the existing problems. It appears very obvious that this program has failed the homeowners badly and is only staying alive because the industry is fighting like crazy not to lose their valuable cash cow.

These people will tell you how great the advantages are of being a member of a mandatory association. No pink houses in your neighborhood, no old cars in the drive-ways and no flag poles in the neighbors' front yard. And your property values will go up in no time!

What they definitely won't tell you is that your money can be used to sue you, that you'll be financially responsible for any of the association's liabilities and that other people, like these busy-bodies, have suddenly the right to tell you what to do and not to do on your own property. They will tell you that your dues will be used to improve your neighborhood. They will not tell you that often more than 50% of the collected dues will be used to pay industry partisans like management companies and HOA attorneys.

And in regards of mandatory homeowners' associations raising property values? Don't fall for this industry fairy tale! There are many examples which render this claim absolutely false! Texas Senate hearings revealed a recent study from Harris County, Houston, TX , which clearly proves that just the opposite is the case. Please see the well documented statistics at supporting documents. And in case of a planned resale the title companies' search will reveal that your property belongs to a mandatory HOA. And since more and more home buyers realize what HOAs are all about, it might even inconvenience your resale intentions.

Collection Fees On HOA Bills

Collection Fees On HOA Bills
by Takara Alexis

Collection agencies could charge up to $1,950 plus "reasonable attorney fees" on a house that is late on its homeowner association assessment under a bill passed out of committee Friday by Senate Democrats.

Senate Bill 174 passed along party lines after an intense debate that had Republicans accusing Democrats of wading into a legal battle in favor of collection agencies.

The bill is usually supported by homeowner associations and collection agencies and opposed by consumer protection groups and investors. Sen. Allison Copening, D-Las Vegas, argued that the fee cap would protect homeowners from the excessive collection practices, and "reasonable attorney fees" could be settled by a judge. She said that the collection agency fees are required to keep homeowner associations solvent and able to provide services for existing residents.

Copening works as a lifestyle director for a homeowner association management company, and critics, including homeowners unhappy with their association boards, have said her outside employment presents an issue.

The legislation has been a source of drama this week, and a sign that the Democratic assembly is less than iron clad. Copening this week initially would not say whether she was a part of the Democratic caucus.

Tempers flared Friday in a back and forth between Copening and Sen. Michael Roberson, R-Las Vegas. Sen. Valerie Wiener, chair of the Judiciary Committee, stopped the sides at one point and said, "Take a breath. Take a breath."

Friday was the deadline for bills to make it out of committee, and SB174 now moves to the full Senate.

Consumer advocates said collection fees on late HOA bills have become a growing problem in the recession and as people walk away from their houses.

"The fees that are being charged to homeowners for past-due HOA fees are exorbitant," said Cena Valladolid, operations director for the nonprofit Consumer Credit Counseling Services in Las Vegas. She said collection agencies hired by HOAs have been unwilling to minimize payments or offer any flexibility to consumers.

The bill specifies that collection agency fees are "super-priority liens" - moving to the front of the line to be paid back when a house is sold. Investors have argued that collection agency fees should not be "super-priority," which they say the Legislature specifically reserved for past homeowner association dues.

Republicans argued that the Senate bill wouldn't do much to slow a problem in Nevada of aggressive collection agencies taking on fees of thousands of dollars on relatively small homeowner association bills. Roberson said the Legislature should also refrain from getting involved in a legal disagreement between two private parties.

Copening brought up the case of Paradise Spa homeowner association in Las Vegas, which was raided by the FBI and Nevada Attorney General's office last week. A single investor there owes more than $1 million in assessments, she said. Residents face having their gas shut off on Monday, Copening said, calling the investor a "slumlord."

Roberson, an attorney, scoffed at the "reasonable" attorney fees in the bill. "How are homeowners supposed to dispute 'reasonable or not?'" he said.

"They're going to have to hire their own attorney, and have more legal fees?" said Sen. Ruben Kihuen, D-Las Vegas, who added he was not completely satisfied with the bill, and reserved the right to vote against it on the floor. He said he would move it forward to prevent excessive fees right now.

Sen. Shirley Breeden, D-Henderson, was the other undecided Democrat on the Committee. She called Copening's bill "a good start" to capping collections.

A regulation pending in front of a Legislative committee is arranged to cap the collection fees at $1,950 per home, plus costs.