Seller fined $20K by HOA for not mowing yard - Posted by BOB H

Posted by Darren on August 17, 2004 at 13:24:58:

He should try to get the local newspaper or tv station news team to do a quick story about the injustice. They hate publicity.

Seller fined $20K by HOA for not mowing yard - Posted by BOB H

Posted by BOB H on August 14, 2004 at 03:21:55:

I am not making this up.

We bought a property this week that had a HOA lien. It showed up on
the title commitment simply as a Notice of Noncompliance, with no
specific dollar amount. When we reviewed a copy of the lien, it cited
"failure to maintain the property", and assessed a fine of $25 a day for
each day the homeowner was in noncompliance.

Now, granted the guy didn’t mow his lawn all that often, but other than
the yard, the exterior condition of the property is virtually
indistinguishable from the the other homes in the neighborhood. These
are single family homes, and the HOA maintains only the community
pools, greenbelts, etc. The normal dues are only $96/Quarter.

We received the pay off the day before closing, and learned the balance
owing on the lien was just under $20,000. To say that we were
absolutely stunned, would be a gross understatement. The only result
of attempting to reason and negotiate with the HOA, was my getting
thrown out of their offices.

You hear horror stories about HOA’s all the time, but this has to be the
most flagrant abuse of power that I have ever seen. The seller, who was
expecting $20,000 at closing, instead got $2,500 (we increased our
offer by $2,500 to get the deal closed). All because he didn’t mow his
lawn as often as the HOA wanted him to.

The point of posting this, other than to just express my outrage, is to
forewarn others, especially those who are buying subject to, of this
potential financial nightmare. If it can happen to us, it can happen to
you.

We don’t generally buy subject to, but we routinely buy discounted 2nd’s
that are often junior to HOA liens, on which, we rarely confirm the
balance. You can bet that we won’t be overlooking that anymore.

Hope this helps prevent somebody from making an expensive mistake.

Bob H

Re: Seller fined $20K by HOA for not mowing yard - Posted by Dave T

Posted by Dave T on August 16, 2004 at 01:22:26:

I am just wondering here. Don’t the HOA liens have to be filed as if they were a mechanic’s lien under the UCCs?

If so, then wouldn’t the lien have to be for the acutal costs the HOA incurred to mow the lawn (perhaps with a reasonable amount of interest added)?

I don’t know the answers, I am just asking the question because a $20K lien for lawn mowing seems unreasonable and vindictive.

Re: Seller fined $20K by HOA for not mowing yard - Posted by Chris (CA)

Posted by Chris (CA) on August 14, 2004 at 18:19:58:

I couldn’t pass this one up. HOA’s really light my fire. I have had some that are complete a$$es and I have had others that I didn’t even knew they existed. I had one that was a horrible experience. I had two intrusive inspections due to a law suit. They repainted the townhouse and covered the A/C while it was running and resulted in a blown fuse. Easy fix, after we found out they covered the unit to paint. I called and called and called to have them send someone out to fix the unit, but ended up having to fix at it myself. Had a light out in front of the townhouse that I called and called and called on and still never got fixed. I had a safety hazard in front of the townhouse that was their responsibility to fix and they never did. The HOA dues were around $150.00 per month. What a rip off. I did read, and I forget where, that CA is voting on new legislation that will prevent HOAs from forclosing on your property if the missed payments or fine is less than a certain dollar amount. I think it was either $2,500 or $25,000, I forget. I have always laughed at the fact that a little old $80 to $150 a month missed HOA due could result in my house being taken away from me. It’s a joke! But hey, what can you do?

Re: Seller fined $20K by HOA for not mowing yard - Posted by Kristine-CA

Posted by Kristine-CA on August 14, 2004 at 11:44:16:

I have had more than one deal fall out of escrow because of HOA liens and judgements that wouldn’t allow the deal to fly–on vacant land deals. The sellers were pretty bummed and really didn’t understand how the judgements could be so high. Didn’t understand that very high lawyer’s fees were included.

And the HOAs and attorneys were absolutely impossible to deal with. They don’t want a deed in lieu–in one case this would have saved a deal where I wanted to buy the seller’s other property not in the HOA but needed this judgement released. They wouldn’t consider a settlement. And these are in unfinished developments where the properties just go to tax sale (and that’s how the how my sellers bought them). And they don’t stand to reap any excess proceeds because the taxes AND HOA judgements exceed any possible sale price at tax sale. I do not get it. Why leave the parcel non-performing?

One of the those bureaucratic frustrations where I am. Kristine

other HOA stuff - Posted by David Krulac

Posted by David Krulac on August 14, 2004 at 11:20:47:

where HOAs and POAs are concerned there are a couple of other issues too:

  1. they can apply to vacant lots and the ffes can cover initiation and other fees an can easily be thousands of $ even on vacant lots.

  2. the HOAs/POAs can enforce their liens by selling the property at a sheriff sale, just like a mortgage foreclosure, so be cautious if you are in a junior position as you can get wiped out.

  3. heard about a POA that was fining an owner because he wasn’t parking in the right partking space.
    At another POA they were fining an owner becasue she painted her front door a “non-appoved color”. Another POA fined an owner becasue the owner did not properly disquise their propane tank.
    These HOAs/POAs can and do what ever they want and can charge whatever they want including what you might consider excessive fines and interest.

Re: Seller fined $20K by HOA for not mowing yard - Posted by BOB H

Posted by BOB H on August 16, 2004 at 12:27:55:

The HOA’s authority to lien is granted in the Covenants, thus
bypassing the requirements & limitations imposed on mechanic’s
liens and the like.

In this case, the HOA didn’t have any actual expenses except legal
fees, because they didn’t do any work to the property - they just
continued to fine the owner $25/day. We couldn’t even get an
accounting of how they calculated the pay off! They threw me out
of their office when I requested documentation supporting their
lien amount.

And yes, $20K is at the very least unreasonable and vindictive.
I’m encouraging the seller to bring legal action against the HOA,
but he’s embarassed, broke, and just ready to take his lumps and
move on. My guess is that they are going to get away with this,
with no repercussions whatsoever - and that’s the biggest
injustice of all.

Re: Seller fined $20K by HOA for not mowing yard - Posted by Kimberly (OK)

Posted by Kimberly (OK) on August 14, 2004 at 21:04:51:

Kristine,

I thought California had changed/was changing the law to limit the HOAs, because too many of their liens were for ridiculous amounts.

Kim

Re: other HOA stuff - Posted by Chuck Rosenberg

Posted by Chuck Rosenberg on September 05, 2005 at 20:14:51:

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