Home Auctions

JamesC (Maryland)
Posts: 282

Posted:

I just called the owner of our management company and ask if any of his other properties (he has many) have every held an auction in any of his other properties.
He told me no, saying auctions are the extreme last step someone would take to get rid of their home. He also said most banks who have foreclosed will more often then not hold an auction at a court house, etc.
The reason for my question involves a neighbor who has recently passed away, and the family wants to get rid of it asap.
Like everywhere else, the market is bad in Maryland, they do not need the money, but don't want the headache of putting it on the market and waiting. We have one home in the community that has been on the market for over two months.
Ours is a private community with assigned parking and homeowners are very protective of their assigned spaces.
He told me I should first inform them we do not allow auctions and to inform them of the parking situation and the possibility of anyone attending the auction being towed.

Just a dumb question::Has anyone in your community held an auction to get rid of their home?

Thanks:

Jim

JeffR7 (California)
Posts: 251

Posted:

How can you stop an auction of a private property. The owner is free to do whatever they feel is necessary. Unless you can find that your governing documents specifically prohibit auctions of property. First I doubt it, second I am pretty sure it would be illegal. Just like you can't regulate a price that the owner wants to sell at.

Parking has nothing to do with this as it should be treated as in any other case where a resident has guests over.

PetunkaM (Florida)
Posts: 1,009

Posted:

He told me I should first inform them we do not allow auctions and to inform them of the parking situation and the possibility of anyone attending the auction being towed. (James)

Whoa, what a management company. No soul no brain. They have NO authority to even say that.

TimB4 (Tennessee)
Posts: 21,047

Posted:

Quote:

Posted By JamesC on 10/25/2011 2:12 PM

He told me I should first inform them we do not allow auctions and to inform them of the parking situation and the possibility of anyone attending the auction being towed.

Jim,

The person who gave you that advice gave you bad advice. Where in your governing documents does it prevent someone from having an auction?

If it's not there, you can't say it is.

You should inform the member that if they wish to hold an auction, that guest parking is limited and they should make arrangements for their guests parking.

Tim

PetunkaM (Florida)
Posts: 1,009

Posted:

‘He also said most banks who have foreclosed will more often then not hold an auction at a court house, etc. ‘

James,
That is very true and many private actions are not hold on site either. It really all depends, you need to find more info. But, that would be the least of my worries. If the family wants to dump the house if could hurt the home values in the community.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

If the family wants to dump the house if could hurt the home values in the community.

Auctions are not valid comps. House values would not change.

An auction only lasts 30-60 minutes. He is overreacting about towing. Just designate an area for parking outside the area assigned spaces. Problem solved. Most auctions around here have about 1-5 people attending. Auction is not a good way to sell a property. The family is better off reducing the price by $10,000 per week until it sells.

BradP (Kansas)
Posts: 2,640

Posted:

The HOA is being petty and stupid in my opinion. As others have said they have zero right to dictate what the property sells for, he could sell it for a $1 if local and state laws allow it. As for the parking issue, again I think the HOA is being petty, the auction as someone said lasts maybe an hour, will take place when most people are at work. Why not just let it go for an hour. Would the HOA rather have this family sit on the home, not maintain it or auction it off to someone who will maintain it. What is next, can't do a for sale by owner?

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Guess what will affect property values? If the owner gets fed up, lists it with a realtor for a very, very low price. This would be a valid comp when you sell your house.

PetunkaM (Florida)
Posts: 1,009

Posted:

Auctions are not valid comps. House values would not change. ‘

Steve,

I did not know that. But I do have a meeting with a real estate broker on Friday and will ask him his Florida opinion which may not be worth much. You know, all is upside down in this state and even experts have no clue what is going on.

JeffR7 (California)
Posts: 251

Posted:

There is no such thing as a valid or invalid comp. Appraisers may chose any properties they want to come up with their analysis. It is however true that many of them will try to avoid foreclosures and short sales. Auctions, would be questionable because they may not even see in the MLS that it was an auction unless they read all the comments.

JamesC (Maryland)
Posts: 282

Posted:

Appreciate the comments insulting or not, (one post saying ::The HOA is being petty and stupid::,.but no one has bothered to answer anything about my original post which was ::::::::::::::::HAS ANYONE IN YOUR COMMUNITY HELD AN AUCTION TO GET RID OF THEIR HOME.

Our MC is a great company and since the owner told me none of his many (other) communities had ever held an auction sale on their properties, he was not sure about what to tell me. We discussed the concerns and the problems with permitting such a sale to take place on the property.
Those who say the HOA has no control or right to interfer are wrong. All the homes in the "PRIVATE" community are located on private property belonging to the Association. The two entrances to the community come off of the main street and onto private property. We receive no services from the county or state and maintain everything by contracting out for services.
We do not now, or have ever permitted solicitors, or even ice cream vendors on the property. Commercial vehicles are permitted to park in the community, only while on service calls.
To hold an open auction on a home in the community would not be received well by the other homeowners.

As far as the assigned parking being enforced:
An equitable servitude is a restriction on the use of land or a building that can be continually enforced. When a land buyer is aware of an agreement that restricts the use of the land, the buyer may be held to the terms of the restriction, regardless of whether it was written in the deed.

Jim

PetunkaM (Florida)
Posts: 1,009

Posted:

'Those who say the HOA has no control or right to interfer are wrong. All the homes in the "PRIVATE" community are located on private property belonging to the Association. '

Oh really? Do you mean ‘homeowner’s property’ belongs to the association? That is a new one on me.

JeffR7 (California)
Posts: 251

Posted:

James, you really have it backwards. The association owns nothing. Zilch. Zada. All common areas are owned by all owners and the association is formed for mutual benefit of all owners.

You, of course, is free to do whatever you feel you need to do, but don't be surprise if this family retains an attorney who sues your association for every penny they believe they lost as a result of your interference.

Why are you making such a big deal about this auction? What do you expect it to be like? More likely than not you'll have 10-20 people showing up at the house for less than an hour and leaving. How will that affect any other owners? Do you permit guests coming over to people houses or do you control that too?

TimB4 (Tennessee)
Posts: 21,047

Posted:

Quote:

Posted By JamesC on 10/26/2011 7:27 PM

Those who say the HOA has no control or right to interfer are wrong. All the homes in the "PRIVATE" community are located on private property belonging to the Association.

This may be true for Condominiums. This is not the case for privately owned property.

Matter of fact, the Association typically doesn't own any property. The membership owns an undivided interest in the common area and the Association was created to manage this common area. Even though the Association is given rights to sell or trade any common area, they are actually acting as an agent for the membership (the owners of the property).

Quote:

Posted By JamesC on 10/26/2011 7:27 PM

We receive no services from the county or state and maintain everything by contracting out for services.
We do not now, or have ever permitted solicitors, or even ice cream vendors on the property. Commercial vehicles are permitted to park in the community, only while on service calls.

That is certainly within the Authority of a Board of Directors in an Association where the roads are private.

Quote:

Posted By JamesC on 10/26/2011 7:27 PM

To hold an open auction on a home in the community would not be received well by the other homeowners.

Have there been complaints from other homeowners?

Now I do understand the concern of the Board about parking, but other than that I don't see how it would impact the other homeowners. Certainly no worse than a bunch of children wondering through the neighborhood and lingering around waiting for rides (wait, doesn't that happen every day that school is in session).

Quote:

Posted By JamesC on 10/26/2011 7:27 PM

As far as the assigned parking being enforced:
An equitable servitude is a restriction on the use of land or a building that can be continually enforced. When a land buyer is aware of an agreement that restricts the use of the land, the buyer may be held to the terms of the restriction, regardless of whether it was written in the deed.

Yep. Certainly a way of stating how the Board may adopt and enforce rules/regulations relating to common areas.

To answer your specific question:

No. I have never been involved with an auction within our development.
However, I don't see it being any more of an impact than having garage sales.

PetunkaM (Florida)
Posts: 1,009

Posted:

However, I don't see it being any more of an impact than having garage sales. (Tim)

Tim,

do you really mean that?

TimB4 (Tennessee)
Posts: 21,047

Posted:

As far as traffic goes, yes.

Unless the people are expecting a large crowd, I can understand the concern about parking, but if they schedule it during a work day during the late morning/early afternoon, I don't think that there will be that big of an impact to the neighbors.

As I said, I've never personally experienced one in a neighborhood.

I do think this may be a case of a board being overly concerned.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Hold everyone horses on this issue. Did we miss the fact the owner of the home died? That means the family can NOT auction the home off until PROBATE court has processed the deceased possessions. This can take atleast 6 months or more to process through. It goes faster if the person had a will. However, either way, there is a time period which the assets/home has to actually be transferred to the family members.

There doesn't have to be an auction at all. The family can hire a realtor and put the house up for sale like any other property once the court rules it to them. The family could keep the property or rent it out. A CHOICE to get rid of the property could be to auction it off if they decide NOT to go through the hassle of renting/selling it.

Now if the property goes through Probate court and is repossesed by the bank, then the property may be auctioned off. Most of those type of foreclosures take place at the outside of the courthouse and NOT on the property itself.

So there has been a few steps skipped here before we have to worry about a property auction. I will tell you to place a lien on the property if possible if the family doesn't pay the dues on it. This can be part of the settlement in probate so the HOA won't be out the dues money...Give the family notice they need to pay the dues atleast while waiting on probate court to sort the details. It's when they don't pay, I'd do the lien process but not before. It's already tough enough to lose a loved one. So be a bit decent about it.

Former HOA President

PetunkaM (Florida)
Posts: 1,009

Posted:

Hold everyone horses on this issue. Did we miss the fact the owner of the home died? That means the family can NOT auction the home off until PROBATE court has processed the deceased possessions. This can take atleast 6 months or more to process through (Melissa)

Not necessarily. The house can be in the 'family trust' in which case there is no probate.

PetunkaM (Florida)
Posts: 1,009

Posted:

James, you really have it backwards. The association owns nothing. Zilch. Zada. All common areas are owned by all owners and the association is formed for mutual benefit of all owners. (Jeff)

Jeff,

That is not the case in our HOA. The Association owns the common areas. Owners have the right to use them/enjoy them as described in the covenants. What is on your deed?

JeffR7 (California)
Posts: 251

Posted:

Petunka, I get to learn something new every day. I have never seen an association to own property. I see quite a few deeds and have never seen that. Usually it's 1/x of an undivided common property in additional to your own real property. The only variance I usually see is parking being either deeded or common property assigned for exclusive use.

Are you in a condo or an HOA? Is it still a non profit HOA? I can just see lots of issues with association owning property and being separately responsible for property taxes and such.

BradP (Kansas)
Posts: 2,640

Posted:

Quote:

Posted By JamesC on 10/26/2011 7:27 PM
Appreciate the comments insulting or not, (one post saying ::The HOA is being petty and stupid::,.but no one has bothered to answer anything about my original post which was ::::::::::::::::HAS ANYONE IN YOUR COMMUNITY HELD AN AUCTION TO GET RID OF THEIR HOME.

Our MC is a great company and since the owner told me none of his many (other) communities had ever held an auction sale on their properties, he was not sure about what to tell me. We discussed the concerns and the problems with permitting such a sale to take place on the property.
Those who say the HOA has no control or right to interfer are wrong. All the homes in the "PRIVATE" community are located on private property belonging to the Association. The two entrances to the community come off of the main street and onto private property. We receive no services from the county or state and maintain everything by contracting out for services.
We do not now, or have ever permitted solicitors, or even ice cream vendors on the property. Commercial vehicles are permitted to park in the community, only while on service calls.
To hold an open auction on a home in the community would not be received well by the other homeowners.

As far as the assigned parking being enforced:
An equitable servitude is a restriction on the use of land or a building that can be continually enforced. When a land buyer is aware of an agreement that restricts the use of the land, the buyer may be held to the terms of the restriction, regardless of whether it was written in the deed.

Jim

Since I was the one with the "insulting" post I will respond to your original question...yes we have had an auction in our neighborhood but not by a private person, it was a sheriff's auction. Since I didn't live right next to the home I forgot it even happened. The sun came up that day and at the end of the day life went on as it typically does. My point of my original post is I am not sure why the HOA feels the need to try to meddle in this. The family just lost a loved one, they don't want the house and would rather unload it and now "big brother" puffs out his chest. Let me sell it, let the parking slide for an hour or so. There are so many extenuating circumstances and this is a once in a blue moon scenario so I don't know why they are so up in arms about it.

JamesC (Maryland)
Posts: 282

Posted:

Quote:

Posted By JeffR7 on 10/26/2011 9:19 PM
James, you really have it backwards. The association owns nothing. Zilch. Zada. All common areas are owned by all owners and the association is formed for mutual benefit of all owners.

You, of course, is free to do whatever you feel you need to do, but don't be surprise if this family retains an attorney who sues your association for every penny they believe they lost as a result of your interference.

Why are you making such a big deal about this auction? What do you expect it to be like? More likely than not you'll have 10-20 people showing up at the house for less than an hour and leaving. How will that affect any other owners? Do you permit guests coming over to people houses or do you control that too?

Jeff:
The members of the Association elects a Board of Directors to enforce the CC&R's and the biggest part is trying to enforce the (R) restrictions.
The Association owns everything including the roads used for homeowners to gain access to their homes. The Board of Directors and the Management Company maintain the enforcement for the roads and the parking spaces where homeowners are permitted to park their two (2) vehicles. The homeowners fully understand the property where their assigned spots are located does not belong to them.

I am making no big deal about the auction as you assert but simply asked the question on the forum if any one in their HOA's have ever had a home auction before.
"A BOARD DOES NOT HAVE THE AUTHORITY TO WAIVE OR EXCUSE COMPLIANCE WITH THE REQUIREMENTS OF THE COVENANTS"
When word got out about a potential auction possibly being held in the community, some of the homeowners become upset and said that if anyone parked in their assigned spaces they would have them towed.

The person who recently past away was not only a neighbor, but also a friend. I moved into the community thirteen years ago (because it had a strict HOA) and realized when he and his wife got divorced, she took the lawn mower. He was paying to have his lawn cut. I volunteered to cut his and have done so for thirteen years because # 1 he had no mower, # 2 because he was sick and # 3 because I am a good guy.
Such a good guy the family gave me "all" of his bay fishing rods, reels and lures. He had a large fishing boat, so I have a lot of the gear.

However! I am still the President of the HOA and have to enforce the guidelines uniformily. When homeowners become irate I have to have an answer for them, because his family members are well to do, and he has passed on.
We on the other hand still have to live in the community and get along.

Jim

BradP (Kansas)
Posts: 2,640

Posted:

Quote:

Posted By JamesC on 10/27/2011 10:18 AM

Posted By JeffR7 on 10/26/2011 9:19 PM
James, you really have it backwards. The association owns nothing. Zilch. Zada. All common areas are owned by all owners and the association is formed for mutual benefit of all owners.

You, of course, is free to do whatever you feel you need to do, but don't be surprise if this family retains an attorney who sues your association for every penny they believe they lost as a result of your interference.

Why are you making such a big deal about this auction? What do you expect it to be like? More likely than not you'll have 10-20 people showing up at the house for less than an hour and leaving. How will that affect any other owners? Do you permit guests coming over to people houses or do you control that too?

Jeff:
The members of the Association elects a Board of Directors to enforce the CC&R's and the biggest part is trying to enforce the (R) restrictions.
The Association owns everything including the roads used for homeowners to gain access to their homes. The Board of Directors and the Management Company maintain the enforcement for the roads and the parking spaces where homeowners are permitted to park their two (2) vehicles. The homeowners fully understand the property where their assigned spots are located does not belong to them.

I am making no big deal about the auction as you assert but simply asked the question on the forum if any one in their HOA's have ever had a home auction before.
"A BOARD DOES NOT HAVE THE AUTHORITY TO WAIVE OR EXCUSE COMPLIANCE WITH THE REQUIREMENTS OF THE COVENANTS"
When word got out about a potential auction possibly being held in the community, some of the homeowners become upset and said that if anyone parked in their assigned spaces they would have them towed.

The person who recently past away was not only a neighbor, but also a friend. I moved into the community thirteen years ago (because it had a strict HOA) and realized when he and his wife got divorced, she took the lawn mower. He was paying to have his lawn cut. I volunteered to cut his and have done so for thirteen years because # 1 he had no mower, # 2 because he was sick and # 3 because I am a good guy.
Such a good guy the family gave me "all" of his bay fishing rods, reels and lures. He had a large fishing boat, so I have a lot of the gear.

However! I am still the President of the HOA and have to enforce the guidelines uniformily. When homeowners become irate I have to have an answer for them, because his family members are well to do, and he has passed on.
We on the other hand still have to live in the community and get along.

Jim

Jim:

in response to this I would ask you this question, what damage will the HOA suffer by allowing the auction and not enforcing the parking? I would counter that the HOA would suffer none, the sale price more than likely won't be used as a comp and the parking issue while inconvenient is not a long term issue. I am not sure the laws in your state but our state laws make it illegal to enforce a covenant or restriction that doesn't have a corresponding negative effect or consequence for the community. I could argue by not allowing the auction that the property sitting there unattended would have a worse effect on your community as a whole.

JamesC (Maryland)
Posts: 282

Posted:

Quote:

Posted By BradP on 10/27/2011 10:23 AM

Posted By
Jim:

in response to this I would ask you this question, what damage will the HOA suffer by allowing the auction and not enforcing the parking? I would counter that the HOA would suffer none, the sale price more than likely won't be used as a comp and the parking issue while inconvenient is not a long term issue. I am not sure the laws in your state but our state laws make it illegal to enforce a covenant or restriction that doesn't have a corresponding negative effect or consequence for the community. I could argue by not allowing the auction that the property sitting there unattended would have a worse effect on your community as a whole.

Brad:
Thanks for your response;

Guess this can be put to rest as I just received an email informing me the house has been sold. I recommended it to some friends of mine because it was a great deal and they are the ones who purchased it.

Thanks for the comments from everyone and especially Tim and Mellissa for their down to earth posts.