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Subject: Is it legal for the HOA to post members that are delinquent on their dues on a public web-site

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JackT1

Posts:0

06/02/2007 1:52 PM
OK. The lawyer said that membership had the right to know who is delinquent. How do you find out who is?

JohnC10
(Arizona)

Posts:106

06/02/2007 5:08 PM
Have your lawyer send the HOA a letter.

JackT1

Posts:0

06/03/2007 4:56 AM
Brad. What is your association doing to collect delinquent dues?

JackT1

Posts:0

06/03/2007 4:57 AM
John C 10. What lawyer do you refer to??

BradD2
(Florida)

Posts:418

06/03/2007 12:44 PM
Any member of an Association can request specific records. One of those is the account balance summary (or even the details). You can also request a listing of or perhaps even a copy of all liens that the Association has applied to properties in the Association. People paying or not paying are part of the Association records as they are the source of income.

JohnC10
(Arizona)

Posts:106

06/03/2007 1:55 PM
Posted By JackT1 on 06/03/2007 4:57 AM John C 10. What lawyer do you refer to?? 'your lawyer' You can also go to your county recorder's site to find the liens your association has filed.

JackT1

Posts:0

06/03/2007 2:35 PM
I don't have a lawyer. Last one I hired I had to fire. He took a case and later said I had no case (after I paid him). I persued litigation and after 4 judges collected.

GloriaM
(North Carolina)

Posts:778

06/04/2007 11:29 AM
Jack: A personal reason or any other reason does not release a person from the debt, unless it was bankruptcy or a foreclosure. It could however open dialouge for the board to agree to a payment arrangement or forebearance agreement.

Dr. Gloria J. Martinez, CFO Official HOATalk.com Sponsor Author of "A Guide to Community Living" Faith Management Services, LLC (North Carolina) (704) 799-3791 www.FaithManagementServices.com *See legal notice below (end of page) or go to www.hoatalk.com/legal

DuaneW1
(Georgia)

Posts:29

06/23/2007 10:52 PM
I can see how publishing the delinquent accounts would cause more animosity, but on the other hand, a number of our 'assessment impaired' neighbors have no problem attending HOA socials, coming to meetings to complain about other neighbors, meanwhile feeling quite secure that most of the membership is unaware of their impairment problems. One in particular has NEVER paid his assessments (3 years worth, plus interest and attorney fees)and yet just bought a $2,000 dog! He takes care of his property and faithfully attends all the HOA meetings, and was even going to run for office UNTIL he found out he had to pay his assessments first, oops, he changed his mind about running! It is aggravating, I almost wish I didn't know who the people were myself. So, while I like the 'transparency' image, I can see too many fallible people acting out in horrid ways justifying their actions. Best to keep it private, for safety sake if for no other reason.

MelissaP1
(Alabama)

Posts:650

06/24/2007 5:31 AM
Collections reports are the only records really kept private amongst the board members. It's really NOT everyone's business about how much someone owes other than the direct party effected. You should be able to call up and find out how much YOU owe, but finding out your neighbor owes, shouldn't be done. You do NOT know the circumstances of why that person owes money. There are PLENTY of personal reasons for that. Plus we ALWAYS refered to the members who owe by LOT numbers NOT names. It gave it some resemblance of privacy. Your board is responsible for making sure they pursue their options of making a member pay up. We had a policy to lien after 6 months of non-payment. That's because it costs $300 to file a lien in my county. That's roughly equal to 6 months dues owed. Liens cost money and come out of the HOA budget to place. Liens/Foreclosures ARE Public records. If someone has one on them or in the process of a foreclosure, it is published in the local paper classifieds. (sometime in smaller publications). If you want to find out, read the legals section of the newspaper that is printed a few times a week. A foreclosure notice should run for a few weeks to a few months. Lien notices may run singularly or a few times. Plus, if you see a notice, that means your board is pursuing the debt. How would you like for any of your neighbors to know what you may owe the HOA. What if you were late for a bill because of Prostate surgery? You have a late fee that shows up because you mailed it in a day late? Do you want to tell everyone about your prostate surgery? It's the same with other members who run behind. As for your person who wanted to run but was behind in dues... Believe it or not, they most likely could have ran for office! That's because you ONLY lose your rifht to vote if you don't pay. Basically, meaning that he couldn't vote for himself at the elections or anyone else. However, who's going to cast a vote for someone who hasn't paid their assessments? So he could have ran, but NOT gotten voted in.

Former HOA President

Jadedone4
(Virginia)

Posts:495

06/24/2007 6:08 AM
Membership has the right to know who is delinquent IF the governing documents, or state/local codes allow for the "open review of HOA records" by a member in proper standing (usually either the governing documents or the state authority has language in them addressing this). I do not believe that a member NOT in good standing would be able to run and/or be elected to office. Most governing documents, state the same criteria for candidates as for members voting. Also most governing documents address (usually in removal of board-member) that if the board-member is not current in personal dues/assessments, then he/she can be removed from the HOA position (this also often flows down to committees, and sub-groups within the HOA structure). HOA's (while it may occur) are not "do as I say do, but NOT as I do," organizations, when they are ran PROPERLY.

RobertR1
(South Carolina)

Posts:2148

06/24/2007 6:55 AM
To all, Good meaty conversation pro and con. Let's go back to square one. Shouldn't the procedure be part of all CC&R's? No reason this couldn't be included in Master deed or by laws. I think you will run into big trouble publishing names, and, as been said, "to what avail." However I do believe that at each Board meeeting of all associationss the total amounts in arrears should be posted and attempts to collect posted. This total should be added to the last 12 months total. Monthly reports for past year, then owners can have a sense of what is going on, names would not be mentioned and if the numbers get get of whack, ask for an explanation from the board. Would it work? I don't know, but there are advantages.

Jadedone4
(Virginia)

Posts:495

06/24/2007 7:49 AM
Robert, I agree with your post, this has been a good discussion. The way that I have set-up delinquent accounts in my HOA is as follows; 1. the overall amount delinquent is publised in the monthly financial report, as a dollar figure amount, and also as a percentage of delinquent accounts (versus accounts in the black). This way we have two "triggers" which allow us to gauge where the financial responsibilities of the HOA. If the dollar amount, or the percentage exceed a threshold, then the board knows that more extensive corrective actions are necessary. 2. the actual delinquency report is ONLY held by the Treasurer, Secretary, and the managing agent. Board-members are allowed to review during the meeting, but do not take any copies with them - on the three listed above. The Treasurer has what I call a working copy, the Secretary a archiva/record copy, and the managing agent has another "in-use" working copy (to assess whether or not an owner is current, when seeking keys to the game room or any other amenities, etc). 3. there is an additional "trigger" once accounts reach attorney status and there is no action taken by owner, which is reported to the board for additional actions. I understand the use of "lot" numbers versus actual owner names, but some find that to be cumbersome (large communities 500 plus units = 500 plus numbers). Also, lot numbers while they do not immediately denote a unit's address and owner, are not that hard to figure out. I am in agreement that a member can request to view the list, but however would extremely hesitant to provide a photocopy of the list. I do not agree that the procedure should be included in the governing documents - except to say that it actually IS included in most. I do not believe that it should be listed as specificity related to "delinquency reports," etc - but continued to be under the umbrella of "open books, reports, etc - sections of most governing documents. If changes in "fair credit/privacy" laws are affected at the federal, state, or local level, that means that governing documents would need to be amended to be in compliance. I think that some "interpretative" abilities should be housed with the HOA, so as to address individual community's needs - and not be one size fits all. The applicable federal, state, and local laws/statutes/codes speak to what "shall" occur with regards to governing documents (and in particular, books, documents, reports - to include delinquent reports); and the HOA should be able to insert "may" clauses in-line with those statutes/codes/laws, which allow the HOA flexibility - as long as it follows the above laws/statutes/codes.

MelissaP1
(Alabama)

Posts:650

06/24/2007 9:20 AM
I was president of 107 patio homes. So refering to lot numbers wasn't that hard. It is true that the people attending the meetings could easily figure out who we were talking about. Especially if they had a copy of the map of the HOA. I usually kept one available. Now I didn't keep it really that "secret" about who owed the association money. I did refer to them as "lot" numbers especially if they were in the room. However, I usually gave a quick explanation why the person did owe money. There were bonafide reason why some didn't pay. Alot of the time it was a misunderstanding. Occasionally I had members who thought their "escrow" account paid the dues. Simple mistakes like that. We had a 6 month before we liened policy. That's because it cost $300 to file a lien and that's the amount of dues owed by that time. So we never paid any real attention to the account until it got over 3 to 6 months behind. Then it would be brought up that I would like to have a vote to place a lien on this property after 6 months and numerous attempts at contact. When I did finally lien or foreclose on a property that was severly behind in dues, it was ALWAYS open to the people to vote or voice their opinion. Surprisingly, there were members AGAINST placing a lien on some homes. Usually those were on homes where the owner had attempted to repay back the money on a payment plan but it hadn't been reflected yet on the statements. Members aren't the ONLY places where members behind in dues has to be reported. I've had to sign paperwork associated with HUD at many closings. That information has to be reported to HUD before closing certain type of loans. That form basically has about 25 questions asking how many lots, how many hehind in dues, how much is collected a year, is it fee simple, and possible condition issues. So this information is recorded with the government occassionally.

Former HOA President

MicheleD
(Kentucky)

Posts:1698

06/24/2007 9:33 AM
I have seen this in other posts about liens you've made, Melissa, but it still just boggles my mind that liens cost you $300 to file! Our filing fees for liens are $7.50 for a notary and $13.00 to file the lien. The lien-release fees are identical, $7.50 for notary and $13.00 filing fee to the county clerk. We add both of those amounts, plus a standard administration fee of $12.00 that we include as part of the lien payoff amount when either the homeowner or closing attorney calls us to get the payoff amount, so we recoup that in the end. I wonder what makes liens to expensive where you are?

MelissaP1
(Alabama)

Posts:650

06/24/2007 11:49 AM
Actually, they cost us about $250 to place a lien. However, that rate changed after I left office. I believe the fact was that we used an attorney to file our liens. He was really a "friend" of our bookkeeper who was responsible for filing the liens. We called the bookkeeper and requested a lien be placed on the property and they were supposed to get the attorney to do it. I agree that it was entirely too high. However, you have to consider that the attorney's cost would be attached to the lien when it was paid back. So the liened person would have to pay the backdue plus our legal costs. It made the lien a little bit more "stiffer" than just a regularly filed lien with no attorney costs. Plus, the association has to be represented by legal council in court. (In most cases/situations). The liens were just easier and more official coming from an attorney than from me anyways. It cost us over $750 in court filing costs alone to file our CC&R's and by-laws. Eviction notices and removal cost me almost $200 in court costs alone. It's going to be another $350 to have the police pick up property owed to me by my ex-renter. Our court costs are kind of high in the county I am in. I think each county courthouse is different. So your kind of lucky your liens are as low as they are.

Former HOA President

JudithC
(Virginia)

Posts:252

06/24/2007 2:19 PM
Before the days of the internet, some associations used to do this on bulletin boards and mailbox stands. The argument I have heard against it (other than common decency)is what if you have made a mistake in the accounting and it is not really true. What kind of grief have you opened the association up to? No one seems to have mentioned this, but mistakes do happen in accounting. In general, I think it is crass to post anything on the website that if someone's name were googled, would pop up with something negative. There are too many people now that do google names just to find out if someone is "real". Usually you can provide the same information to the membership without exposing someone to this type of harassment. Recently I wanted to show someone what it felt like as they said they could not see my point of view. I put together a nice negative statement about them that was true and had them identified by name. It turns out I could not bring myself to upload this even to prove a point.

MicheleD
(Kentucky)

Posts:1698

06/24/2007 3:45 PM
I see. I thought the county costs were that high. We had an attorney draft our lien template years ago. We periodically send it to him for review to make sure that it is up to date. But our treasurer prepares the lien documents (from the template), gets them notarized, then either delivers to the County Clerk's office for filing, or mails them with a self-addressed, stamped return envelope for the recorded copy to be returned to us for our files. That has helped streamline our court costs considerably. If we were ever to have to foreclose, which, fortunately we have not had to do, we would probably have the attorney proceed with that. But thanks for clarifying that cost for me. For what it's worth, here is a draft of our template. We just fill in the name, address and amount owed for each lien. XXXXX XXXXXXX Residents Association, Inc. Notice of Assessment Lien Whereas, pursuant to Article IV, Section 10 (as amended), of the Declaration of Covenants, Conditions and Restrictions for XXX XXX (a subdivision in Jefferson County, Kentucky), which states “If any assessment is not paid by January 31, the owner will receive a second notice. If payment has not been received in full by March 1, a late charge of 50 percent of the Residents Association assessments will be assessed. The Residents Association may bring an action at law against the owner personally obligated to pay the assessment, or foreclose a lien against the property, and interest, costs and reasonable attorney fees of such action or foreclosure shall be added to the amount of such assessments. No owner may waive or otherwise escape liability for assessments provided for herein by abandonment of his or her lot”, and Whereas, Section 1 being recorded in Deed Book XXXXX, Page 170, and Section 2 being recorded in Deed Book XXXXX, Page 184, and Section 3 being recorded in Deed Book XXXX, Page 501, and Section 4 being recorded in Deed Book XXXX, Page 375, and Section 5 being recorded in Deed Book XXXX, Page 462, and Section 6 being recorded in Deed Book XXXX, Page 474, and Section 7 being recorded in Deed Book XXXXX, Page 193, and Section 9 being recorded in Deed Book XXXXX, Page 0481, in Jefferson County Clerk’s office; and Whereas, XXXX XXXX Residents Association, Inc., a Kentucky corporation, P.O. Box XXXX, Louisville, KY 40268-0480, is authorized to levy a yearly assessment for purposes generally benefiting the Association and said assessment shall constitute a lien on each individual property until paid, and Whereas, the owner(s) of the property set out below have failed to pay the assessment for the calendar year 2007 within the time required. OWNER(S): XXXX XXXXX ADDRESS: XXXXX Court Louisville, KY 40258 AMOUNT DUE: $261.00 Now, therefore, XXXXX XXXX Residents Association Association, Inc., does hereby give notice that it asserts the lien provided against the above property for the amount of the assessment ($150.00 per year plus a 50 percent late penalty), the costs of recording this lien and all reasonable attorney fees and costs incurred in enforcing said lien. Dated this XXXth day of XXXXXX, 2007. XXXX XXXX Residents Association, Inc. By: ___________________________________ XXX XXXXX Treasurer, Board of Directors STATE OF KENTUCKY ) ) COUNTY OF JEFFERSON ) Subscribed, sworn to and acknowledged before me this _____ day of _________________, 2007. ______________________________________ Notary Public, State at Large My commission expires ___________________________. Partial payment not sufficient to file for release of lien. For total payoff amount, please contact: XXX XXXX Residents Association, Inc. Attn: Treasurer PO Box XXXXX Louisville, KY 40268-0480 This document prepared by: _____________________ XXXX XXXX PO Box XXX Louisville, KY 40268 502-XXX-XXXX

MelissaP1
(Alabama)

Posts:650

06/24/2007 8:43 PM
Our liens also run in the newspaper. It's considered a form of PUBLIC NOTICE of the lien in case they don't respond by mail/certified letter. That costs a few dollars there to run the ad in the newspaper. It's much like how one gets divorced if the other party refused to acknowledge the paperwork. I got lucky on our foreclosure. The lawyer was unaware of the process and only charged us $800! However, he warned me that next time he was NOT going to be so "cheap". He also forgot to give us the money we got from the foreclosure for almost 6 months! We accidently found it in our folder when I was placing another lien on someone in an emergency situation. I found out through the paper, the bank was foreclosing on a property in our HOA before I had a chance to lien it. Banks NEVER notify a HOA of their lien or foreclosing intents. If they do, it's because they want some kind of "deal" like forgiving dues.

Former HOA President

MicheleD
(Kentucky)

Posts:1698

06/24/2007 11:12 PM
We are not allowed to collect on a lien if the home goes into foreclosure. Hmm. I wonder if that means if WE foreclose on the lien, too? Hadn't thought of that. Here is the verbiage: "Section 11. Subordination of the Lien to First Mortgage. The lien of the assessments provided for herein shall be subordinate to the lien of any first mortgage. Sale or transfer of any lot shall not affect the assessment lien or liens provided for in the preceding sections. However, the sale or transfer of any lot pursuant to mortgage foreclosure or any proceeding in lieu thereof shall extinguish the lien of such assessments as to payments, which became due prior to such sale or transfer. No sale or transfer shall relieve such lot from liability for any assessments thereafter becoming due or from the lien. " Anyway, we have never had to foreclose, so I guess it's a moot point. How odd that it has to run in the paper! Amazing how different processes can be from state to state.

JudithC
(Virginia)

Posts:252

06/25/2007 4:18 AM
What strange language that is -- it sounds like the real estate interests were very large in the attorney's mine when he wrote it! What if at the foreclosure sale they get more money for the property than the bank is owed? Certainly the other debts should be covered out of the excess. Perhaps they are presuming that no one would allow their house to head into foreclosure if selling it would get them the cash, but that presumption doesn't always hold up.

MelissaP1
(Alabama)

Posts:650

06/25/2007 4:23 AM
A HOA can foreclose but they have to pay the bank from any of the profits if the owner owed the bank money. That's basically what your statement was about. You can lien and then foreclose if you beat the bank to it. However, you risk doing the work of the bank and getting nothing. Either way you do it, the bank ALWAYS gets paid FIRST and then all the other parties get to divide up the rest.

Former HOA President

RogerB
(Colorado)

Posts:3701

06/25/2007 6:34 AM
Melissa, your statement "the bank ALWAYS gets paid FIRST and then all the other parties get to divide up the rest" is not true in Colorado. The HOA comes first for 6 months of assessments. Each state may be different.

Roger Borcherding Official HOATalk.com Sponsor DARCO Property Management (Colorado) (303) 925-0150 *See legal notice below (end of page) or go to www.hoatalk.com/legal

MelissaP1
(Alabama)

Posts:650

06/25/2007 2:25 PM
Question Roger? Is that from a HOA or bank initiated foreclosure? Just curious. The property We foreclosed on was behind in dues over 2 years plus a special assessment. 6 months of dues wouldn't have been worth the effort in our case. Dues are only $50 a month. Sounds like a HUGE discouragement to me for a HOA to file foreclosure if they only get 6 months back. The dues would have to be pretty large to even consider paying out.

Former HOA President

RogerB
(Colorado)

Posts:3701

06/25/2007 8:20 PM
Melissa, it is call a "super lien" and applies no matter who forecloses. I have never been involved with doing it, just am aware of it. We have never had to go beyond filing a lien to even the point of involving an attorney. Attached is an example of the delinquent assessment procedures we recommend.
Attachment: 1625203734871.doc
Roger Borcherding Official HOATalk.com Sponsor DARCO Property Management (Colorado) (303) 925-0150 *See legal notice below (end of page) or go to www.hoatalk.com/legal

JudithC
(Virginia)

Posts:252

06/25/2007 8:42 PM
In reading the attachment, I note that the homeowners approve or veto the budget. How common is that in associations percentage wise? We don't have such a provision -- the board does it entirely on their own.

RogerB
(Colorado)

Posts:3701

06/25/2007 9:02 PM
Judith, I don't think it is common. It is what we recommend and our clients have all agreed to do. We think it is best to have certain "checks and balances" between the Board and the owners/members of the HOA and the assessment amount, which is part of the budget, is a very important one.

Roger Borcherding Official HOATalk.com Sponsor DARCO Property Management (Colorado) (303) 925-0150 *See legal notice below (end of page) or go to www.hoatalk.com/legal

JudithC
(Virginia)

Posts:252

06/26/2007 3:31 AM
Thanks Roger, come to think of it I guess our documents don't forbid it, though they do specify when the annual meeting is. Either that would have to be changed or our fiscal year changed to be able to have homeowner approval of the budget. From time to time people do complain about not being able to have a yea or nay voice in the budget, and it is very interesting that your firm does in fact recommend it. Food for thought!

BradP
(Kansas)

Posts:1742

06/26/2007 8:12 AM
Michele: Costs varies based on county to file a lien, for example it cost me $8 to file one where I live.

PaulM
(Pennsylvania)

Posts:1347

06/26/2007 8:22 AM
JohnC10: To put another slant on your argument, it is not necessary and highly unethical, IMO, to post the actual names or addresses of those in arrears on dues. If your community does have a JohnQPublic who is also a Good Samaritan, he doesn't need to know WHO it is, just that SOMEONE is, and as he chooses can offer to fulfill the payment need through the appropriate payment channels. Nothing else should be necessary.

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