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Subject: Threat of HOA Lien

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MukeshP
(Ohio)

Posts:2

07/27/2008 6:50 PM
We have a developer controlled HOA in Ohio which is threatening to put a lien on our properties for non-payment of dues. As background the HOA has assessed dues but never provided full and proper accounting. The homeownwers have asked numerous time for a full account but to no avail. As protest we have refused to pay the dues that are assessed. What I need to find out is, is there anything we the homeowners can do to get the lien released if one is filed. Please help!!!! Thanks, MSPCPA

MicheleD
(Kentucky)

Posts:1866

07/27/2008 7:01 PM
Posted By MukeshP on 07/27/2008 6:50 PM We have a developer controlled HOA in Ohio which is threatening to put a lien on our properties for non-payment of dues. As background the HOA has assessed dues but never provided full and proper accounting. The homeownwers have asked numerous time for a full account but to no avail. As protest we have refused to pay the dues that are assessed. What I need to find out is, is there anything we the homeowners can do to get the lien released if one is filed. Please help!!!! Thanks, MSPCPA There is most definitely a surefire way to get the lien released if one is filed: You can pay the total lien payoff amount. Unfortunately for the homeowners, your CC&Rs most likely do NOT stipulate that your assessments are due ONLY IF the developer provides a full and proper accounting. Most likely the ONLY condition on whether you HAVE to pay the assessments is that you OWN the property (in other words, your name is on the deed). If you foolishly continue to refuse to pay "until" whatever your well-intended ultimatum is, all you will have succeeded in doing in the end is emptying your bank account more than your assessments actually are: assessments + any late fees/penalties + any attorney collection/lien filing fees + any lien release fees.

MukeshP
(Ohio)

Posts:2

07/27/2008 7:12 PM
I understand that no paying is not an option. But how are we to know that the homeowners are not being ripped off by the developer if there is no accounting of the assessement. Thank, MSPCPA

MicheleD
(Kentucky)

Posts:1866

07/27/2008 7:36 PM
I sympathize with you, for sure. I'm not at all aware of Ohio statutes and laws, but there are a handful of posters on here who might know what your options are to obtain the financials. I do know that under no condition would you be smart to protest by not paying. Also, how old is your development? At what point does the developer turn over control? How many members in your HOA and what are your annual assessments (or monthly if they are billed that way)?

SusanW1
(Michigan)

Posts:2316

07/27/2008 7:37 PM
You need to get the courts involved. A judge MAY rule to let you hold the funds in escrow IF that is a part of your agreement before he turns over the complex to an HOA.

TonyM3
(Arizona)

Posts:140

07/27/2008 8:05 PM
Sec. 5312.08. (A) Unless otherwise prohibited by this section, any owner may examine and copy the books, records, and minutes of the owners association, described in division (C) of section 5312.06 of the Revised Code, pursuant to reasonable standards set forth in the declaration, bylaws, or rules the board promulgates. The standards may include, but are not limited to, standards governing the type of documents that are subject to examination and copying, the times and locations at which those documents may be examined or copied, and the specification of a reasonable fee for copying the documents. http://www.legislature.state.oh.us/bills.cfm?ID=127_HB_220_I

TonyM3
(Arizona)

Posts:140

07/27/2008 8:10 PM
I think you'd have to at least threaten to sue based on the revised statutes, but unless you're a member in good standing (ie dues paid up) I don't think you'll have a leg to stand on.

KirkW1
(Texas)

Posts:1190

07/27/2008 8:20 PM
I don't think you being in good standing would hamper your ability to sue. But you might find that the process of placing a lien and even foreclosing runs much faster then the process of forcing the books to open up. I would highly recommend paying the dues and pursue the open the books as a another matter. If possible be in court and ask the judge, "What if he still refuses?" The judge will make it painfully clear that non-compliance is not a valid option.

TonyM3
(Arizona)

Posts:140

07/27/2008 8:27 PM
Posted By KirkW1 on 07/27/2008 8:20 PM I don't think you being in good standing would hamper your ability to sue. True, but will probably hamper achievement of the desired goal.

GlenL
(Ohio)

Posts:1470

07/27/2008 8:34 PM
Posted By TonyM3 on 07/27/2008 8:05 PM Sec. 5312.08. (A) Unless otherwise prohibited by this section, any owner may examine and copy the books, records, and minutes of the owners association, described in division (C) of section 5312.06 of the Revised Code, pursuant to reasonable standards set forth in the declaration, bylaws, or rules the board promulgates. The standards may include, but are not limited to, standards governing the type of documents that are subject to examination and copying, the times and locations at which those documents may be examined or copied, and the specification of a reasonable fee for copying the documents. http://www.legislature.state.oh.us/bills.cfm?ID=127_HB_220_I Tony that is a proposed bill it has not been enacted at this time as far as I know. There are no HOA regulations in Ohio at this time except for condominiums.

TonyM3
(Arizona)

Posts:140

07/27/2008 8:37 PM
That's what I figured...maybe he could put on his best poker face and bluff like crazy. Why is Ohio so far behind the times I wonder?

MicheleD
(Kentucky)

Posts:1866

07/27/2008 9:03 PM
Posted By TonyM3 on 07/27/2008 8:37 PM That's what I figured...maybe he could put on his best poker face and bluff like crazy. Why is Ohio so far behind the times I wonder? Because it shares a border with Kentucky?? We don't have any decent HOA legislation, either. Wait. We don't have ANY HOA legislation. . .there's some proposed Condo action, but no HOA.

GlenL
(Ohio)

Posts:1470

07/27/2008 9:06 PM
Michele let's blame it on Tennessee since it's below both of our States.

GeorgerwilliamsW
(Indiana)

Posts:771

07/28/2008 1:19 AM
I gotta' say that I agree with the thrust of the comments here. Withholding association fees is not the way to protest. It puts the protesters in the wrong as well as the association or developer as well. At the very least, fees should be placed in a trust, but even that is not the best of ideas. Couple of thoughts. First, the vast majority of developers do not want unhappy homeowners. It hurts sales and profits. There is no mention of what other actions have been taken to achieve your objective. I would suggest (1) working very hard to set up a meeting with the CEO of the developer to discuss the issues, and (2) contacting the media to see if you can get some consumer affairs reporter on your side. Alternately, you could have signs made and put in your front yard (even if prohibited) stating your case without libeling the developer. Amazing what results you could get. The liens may be just a threat, but do not count on that. With easy access to attorneys, the developer can very easily file a lien. Now with all that said, while developers are in control of the association they have dictatorial rights. They may not even have to segregate association funds. Sadly, this may be a cause not worth fighting for. You need to ask yourself what is the value of the information. Even if you do receive an accounting, there may be very little you can do with the information.

KirkW1
(Texas)

Posts:1190

07/28/2008 5:43 AM
...Alternately, you could have signs made and put in your front yard (even if prohibited) stating your case without libeling the developer. Amazing what results you could get. The liens may be just a threat, but do not count on that. With easy access to attorneys, the developer can very easily file a lien. ... Prohibited signs on your own property are a very bad idea. They will add fuel to the fire and you will have fines and/or lawsuits. And you are much too likely to be on the losing side. And considering that the liens are just a threat is a horrible idea. I would not consider this even in the realm of reality. Here is the cold, stark, reality. It costs the developer/HOA nothing to file the lien. The cost is passed on to the homeowner. While I don't know the arrangement of the current attorney, there are some that will do the filings with no money up front because they know they will get the money on the back end. And they are paid well enough that they can sit and wait. And if they care to run up the costs, they will do a title search as well (at your expense). Get this very clear, the deck is stacked against you and you should not play those hands. Better to blow the money in Vegas where you have some home of winning (however dismal). I think your best bet is to send certified letter with an excerpt from the law requesting to see the books. Should that fail, look for a consumer protection division to see if they will consider your case. You mention several people. If you divide the cost of the lawyer up, then you can quite possibly afford one to fight the fight. If the loss is too great, your front of owners will quickly dwindle and someone will get badly burned.

GeorgerwilliamsW
(Indiana)

Posts:771

07/28/2008 6:10 AM
Disagree with you entirely, Kirk, (without being disagreeable). The sign routine has worked in two separate situations just in this past year in Hoosierland. Developer changed his ways. For me, the issue is "to what end?" Even if the books are opened, what then? The developer is still completely in control. And, without a doubt, the books will show that the developer has paid a lot more money into the association than the residents. You gotta ask, "Is this worth fighting about?" And on top of that, the developer may decide to charge all his legal expenses to the association itself. It is far better to resolve disputes through negotiation. And in all negotiations, the strategy is to negotiate from strength. Call the media and stage a picket protest in front of the sales office.

GeorgerwilliamsW
(Indiana)

Posts:771

07/28/2008 6:43 AM
Posted By MukeshP on 07/27/2008 6:50 PM We have a developer controlled HOA in Ohio which is threatening to put a lien on our properties for non-payment of dues. As background the HOA has assessed dues but never provided full and proper accounting. The homeownwers have asked numerous time for a full account but to no avail. As protest we have refused to pay the dues that are assessed. What I need to find out is, is there anything we the homeowners can do to get the lien released if one is filed. Please help!!!! Thanks, MSPCPA Getting back to the original question,if a lien is satisfied, then the lien holder usually has 7-30 days by law to release the lien. Otherwise the lien will stay on the property record. And, the lien holder may (check your covenants and state law) be able to sock you with legal and filing fees related to the lien. Your only other option is to sue. The law may allow you to do so in small claims court, but that varies from state to state. Otherwise, you will need to engage an attorney, which will get expensive (probably at least $1,500, and more likely $3,000) I cannot emphasize strongly enough that your best bet is to pay all fees in arrears (plus any late payment charges and interest) to avoid having a lien placed on the property. An added thought: even though a lien is subordinate to a mortgage, your mortgage lender may not be pleased to see the lien. That may create more stress than getting it removed. Rather than continue down the road you are on, see if the local Better Business Bureau has a complaint resolution process that you can use. Also check with the local builders association and the local chamber of commerce. Also, the state consumer protection agency (as Kirk wisely noted) may be of some help, if only to offer some advice. And check to see what the licensing board has to say about filing a complaint against the builder. But if that fails, exercise your constitutional right to picket the builder's sales office or main office. A simple sign, "Unfair to Homeowners" may work wonders if you alert the media.

TonyM3
(Arizona)

Posts:140

07/28/2008 7:00 AM
Posted By MukeshP on 07/27/2008 6:50 PM ..the HOA has assessed dues but never provided full and proper acounting. I'm sure the dues amount was disclosed when you purchased the property. Is there anything different about the HOA property from then till now that leads you to believe that funds are being misappropriated and makes the review of the books important emough to not pay for services rendered? I mean it seems kind of a trivial to hold back dues on that reason alone.

DJ1
(Ontario)

Posts:460

07/28/2008 10:15 AM
Signs worked for us and it would take a while for the developer to go through the proper notification and enforcement option if he pursued trying to get signs removed as a violation. In our case it may be that the developer never pursued that option because he likely knew he hadn't filed the CCR's against our deed and didn't want that discovered before all He** broke loose once homeowners found out 34 homes weren't part of the HOA!

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