HOA’s can be a great thing for many, but risky business for others. How so? Here is just one example:
Ordinarily, banks foreclose houses where owners owe $190,000, according to a study conducted by Sentinel Fair Housing in 2001. This same study also discovered that houses foreclosed by HOAs owe just $2,557 on average. These houses are then resold for peanuts compared to their value and sometimes they are sold for amount just sufficient to take care of the amount the initial owner owed the association. Wenonah Blevins’ house which was worth $150,000 at the time was sold off for just $5000 just to cover the $4000 debt she owed, and a great fraction of it would go to the attorney’s fees.
These associations are termed creditors and not debt collectors, which is an important distinction in legal parlance. This means that the attorneys working for the different home owners association are not bound by the laws of federal debt-collection; this definitely means that the attorneys will not collect their fees from the client but from the homeowner. This law allows insignificant fees to hyper-inflate into sums that the homeowner can‘t pay and which leads to eviction, heartbreaks, foreclosure, and endless lawsuits.
These evictions and lawsuits are found on the rules of the Homeowners’ Association devised to control the outlook of an area with the notion that a sanitary, homogeneous appearance will secure the value of homes in the area. And the elected officials of HOAs don’t consider any detail too frivolous to be policed by them. These associations have the capacity to and they make it a point to sanction homeowners over what kind of plants they grow, the way the hedges appear, the color they choose to paint their houses, the age of the residents in a senior living center, and this list could include anything except the race of the homeowners or handicap access; these are covered by the fair housing laws. A family living in Newport Beach, California, battled on in court for a very long time just to keep the basketball hoop on their driveway. Similarly, a woman in Boca Raton, Florida was forced to have her dog weighed at an animal hospital in the presence of a court presence who was the witness. This was to ascertain the weight of the dog to know if it was heavy enough to deserve eviction. As if it couldn’t get worse enough, these associations also create incentives for owners to watch one another if they can’t catch these ‘law breakers’. An HOA in Arizona actually pays residents who report neighbors breaking the rules. You got $150 if you reported a neighbor who dumped trash not permitted in the Dumpster and $100 if you caught your neighbor walking his dog with no leash.