In many states it is not difficult for an HOA to foreclose on a residents home for past due amounts even if the amount owed is just a few hundred dollars.
“The fact of the matter is, the laws of the state of Virginia allow the homeowners association to file assessment liens on properties who haven’t paid their assessments, and they also allow foreclosure on those liens,”
While these situations are rare in Williamsburg. VA this marks the second case filed recently by the Fords Colony Home Owners Association. This time the HOA has engaged the Association Dues Assurance Corporation of St Clair Shores Michigan to foreclose on a home located at 100 Walton Heath in the Fords Colony neighborhood.
A foreclosure auction is scheduled for September 27th unless the lien is satisfied prior to that time according to a notice that was posted in the local newspaper.
Anyone who stops paying a mortgage knows the bank can come after their home but most don’t realize that a home owners association has the same power.
The property being foreclosed on by Ford’s Colony HOA is a 5900 square foot nine bedroom home built in 2009 and owned by Patrice Perry. The home is currently assessed by James City County for $701k
( note: we were unable to verify the amount of unpaid HOA fees due on this home)
If an association did not have a means, a forceful means, to collect that money from any homeowner who, for whatever reason, couldn’t pay, it places an unfair burden on every other owner in that association.
Homeowners associations require dues to maintain common areas — pools, parks, landscaping and lighting. After owners default, the associations are left with few options. They can either slash services or raise the fees.
Homeowner Associations generally attempt to work deals with homeowners and only foreclose after dues go unpaid for more than a year or longer, experts say. That way they avoid the attorneys fees and court costs that come with foreclosing. By foreclosing, the associations are then on the hook for maintaining the seized properties. The filing indicates a lien was filed against the property back in January 2011
Frank Rathbun, a spokesman for the Virginia-based Community Association Institute, CAI, said associations don’t want to foreclose, but will as a last resort.
“Associations have to operate as the businesses they are,” Rathbun said. “Homeowner associations have a responsibility to maintain the community.”
Virginia law allows homeowners associations to foreclose on a home or property if the owner owes money to the association.
The Virginia Property Owners’ Association Act governs the operation of property owners’ associations. According to the act, homeowners associations can file liens on residents if they don’t pay assessments, fines or other costs associated with both.
Nationally, about 62 million people live in 310,000 homeowners associations, condominium communities, residential cooperatives and other planned communities, according to the Community Association Institute. A survey by the group in October found that 65 percent of homeowners associations have delinquency rates exceeding 5 percent, up from just 19 percent of associations in 2005.
What about you ?. Do you think Home Owner Associations should be allowed to foreclose when HOA fees are not paid ?
Pssssst…….I’m a real estate agent.
This post was authored by local resident and REALTOR, John Womeldorf. John is known around town as Mr. Williamsburg, for both his extensive knowledge of the Williamsburg/ Hampton Roads area and his expertise in the local real estate market.
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