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HOA Not Upholding Rules

Started by LA • 19 replies • 1408 views

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LA (Arizona)
Posts: 10
Posted:
I live in a community where the developer/owner of the development lives four hours away in another city.
He has not held any HOA meetings nor provided any information regarding the HOA's to any residents. There are about 50 houses in the community.
Since he began in 2006, he has not upheld any of the rules he made up. Like we haven't had the security gates working, no maintenance done on the roads and no street lights.
My question is why should homeowners keep on paying this guy when he hasn't done anything? The majority of houses are not even complete. He hasn't even completed the work on the houses.
Should we keep paying? Some of us say no and others say yes.
GeorgerwilliamsW (Indiana)
Posts: 975
Posted:
Quote:
Posted By LA on 08/08/2008 11:47 AM
I live in a community where the developer/owner of the development lives four hours away in another city.
He has not held any HOA meetings nor provided any information regarding the HOA's to any residents. There are about 50 houses in the community.
Since he began in 2006, he has not upheld any of the rules he made up. Like we haven't had the security gates working, no maintenance done on the roads and no street lights.
My question is why should homeowners keep on paying this guy when he hasn't done anything? The majority of houses are not even complete. He hasn't even completed the work on the houses.
Should we keep paying? Some of us say no and others say yes.


You will get lots of advice here from people who know a great deal about Arizona homeowners associations.

But absolutely do not stop paying your association fees. That is the wrong way to go about stating your position. It makes you a deadbeat and diminish the strength of your position.

All it will do is result in the developer filing liens for non-payment. It will give the developer the upper hand.

Pay your fees.
NicoleO4 (California)
Posts: 160
Posted:
I would say pay your dues.. but get to know your supporting documents.. Find out what your governing documents are.... and proceed accordingly.
If you don't pay your dues.. it can be a big deal and you don't need a leing on your property.
NicoleO4 (California)
Posts: 160
Posted:
Quote:
Posted By NicoleO4 on 08/08/2008 12:03 PM
I would say pay your dues.. but get to know your supporting documents.. Find out what your governing documents are.... and proceed accordingly.
If you don't pay your dues.. it can be a big deal and you don't need a leing on your property.

Opps.. Lien.... it isn't work the hassle that way and it only hurts you the homeowner.
SusanW1 (Michigan)
Posts: 5,202
Posted:
You MAY be able to file a breech of contract, and a judge would let you put dues in escrow until the developer fulfilled his contract.

You and your fellow homeowners need to get an attorney ASAP.
It sounds like this guy is using your money to do other things.
GeorgerwilliamsW (Indiana)
Posts: 975
Posted:
Quote:
Posted By SusanW1 on 08/08/2008 12:49 PM
You MAY be able to file a breech of contract, and a judge would let you put dues in escrow until the developer fulfilled his contract.

You and your fellow homeowners need to get an attorney ASAP.
It sounds like this guy is using your money to do other things.
Susan,

Arizona has a dispute resolution process in place for homeowners and homeowners associations. A lawsuit is probably not the first step. Why don't we let people who are more knowledgeable about Arizona law and process than either you or I are handle this one.

GeorgerwilliamsW (Indiana)
Posts: 975
Posted:
Quote:
Posted By LA on 08/08/2008 11:47 AM
I live in a community where the developer/owner of the development lives four hours away in another city.
He has not held any HOA meetings nor provided any information regarding the HOA's to any residents. There are about 50 houses in the community.
Since he began in 2006, he has not upheld any of the rules he made up. Like we haven't had the security gates working, no maintenance done on the roads and no street lights.
My question is why should homeowners keep on paying this guy when he hasn't done anything? The majority of houses are not even complete. He hasn't even completed the work on the houses.
Should we keep paying? Some of us say no and others say yes.


This link may be of some help. It is a link to the Office of Administrative Hearings in Arizona:

http://www.azoah.com/HOA.htm

You may also find this document helpful:

http://www.azoah.com/Vol42.htm

SusanW1 (Michigan)
Posts: 5,202
Posted:
This sounds like it's between a DEVELOPER and the people who have bought some of the homes in his development. The homeowners have no Association of their own, yet.

GeorgerwilliamsW (Indiana)
Posts: 975
Posted:
We don't know that. The homeowners association is probably in existence (fees are being paid), but continues to be controlled by the developer until it is turned over to the homeowners. Here it is known as Class A and Class B members.
MaryA1 (Arizona)
Posts: 7,043
Posted:
Quote:
Posted By LA on 08/08/2008 11:47 AM
I live in a community where the developer/owner of the development lives four hours away in another city.
He has not held any HOA meetings nor provided any information regarding the HOA's to any residents. There are about 50 houses in the community.
Since he began in 2006, he has not upheld any of the rules he made up. Like we haven't had the security gates working, no maintenance done on the roads and no street lights.
My question is why should homeowners keep on paying this guy when he hasn't done anything? The majority of houses are not even complete. He hasn't even completed the work on the houses.
Should we keep paying? Some of us say no and others say yes.

First of all, it's not uncommon for the developer to not hold any meetings while still in control of the assn.

Secondly, regardless of what the developer has failed to do, it's very important to CONTINUE PAYING YOUR ASSN ASSESSMENTS. Please heed my words, you home could be foreclosed if you do not pay your assessments! Please inform you neighbors of this also.

When you purchased your home you should have been given a copy of the pubic report. This document will give you information regarding the development and the homeowners association. The developer is required, by the Dept. of Real Estate, to give you a copy of this report before you purchase a lot and the potential buyer is required to sign a receipt acknowledging receipt of the report.

I suggest you read through the state statutes regarding "sale of subdivided lands". The state statutes can viewed, and copied, on the AZ Leg website: www.azleg.gov Click on "statutes", then click on "Title 32". Subsection 32-2181 thru 2185.09 may be of interest to you in determining if the developer has broken any laws.

The AZ Dept of Real Estate is the point of contact for you. I would suggest calling the office, explaining the major things that have not been completed, i.e. any amenities not completed, lack of street lights and road improvements.

Can you tell me the name of the developer; the name of your HOA and where you are located? I may be able to give you more advice/information. Please feel free to contact me privately @ [email protected].
MaryA1 (Arizona)
Posts: 7,043
Posted:
LA,

A few others on this forum have suggested filing a claim with the Office of Admin. Hearings (OAH). While this is an avenue available to homeowners for settling disputes, I would recommend not considering this at this time. If no state laws have been broken or covenants violated there is no basis for a claim with the OAH. I know you've stated there are a number of things the developer isn't doing; however, that doesn't mean he has broken any laws. First, lets determine exactly what he is or isn't doing, then we can determine if any laws have been broken and what course of action should be taken against him.
GeorgerwilliamsW (Indiana)
Posts: 975
Posted:
OK, Mary. Your are in charge. You have the knowledge none of us out-of-staters have.
LA (Arizona)
Posts: 10
Posted:
I've heard that they can foreclose, but how is that possible? Doesn't the bank "have" the house until it is paid?

the developer is MT Development in Douglas Arizona. We don't know the name of the HOA. This guy says he's running the HOA and we don't need to see any documentation of how the HOA funds are being applied.
MaryA1 (Arizona)
Posts: 7,043
Posted:
Quote:
Posted By LA on 08/08/2008 3:33 PM
I've heard that they can foreclose, but how is that possible? Doesn't the bank "have" the house until it is paid?

the developer is MT Development in Douglas Arizona. We don't know the name of the HOA. This guy says he's running the HOA and we don't need to see any documentation of how the HOA funds are being applied.

LA,

The HOA has the same lien authority as the mortgage company. If you don't pay your mortgage, the mortgage company can foreclose. If you don't pay your HOA assessments, the HOA can foreclose. And, just like a mortgage company, if the HOA forecloses you have no homestead exemption protection for whatever equity (up to $150,000) you have in your home. This is also spelled out in state statutes -- 33-1256 if you're in a condo assn or 33-1807 if you're in a planned community. Go to the website I referenced in my previous msg and click on Title 33. You will see all the state statutes pertaining to HOAs. It would be a good idea for you to read them so you know what the laws are and what protections you have. There are additional statutes under Title 10 that also apply to HOAs that are nonprofit corporations -- The Nonprofit Corp. Act, Chapter 24 thru 40. You will also want to familiarize yourself with these laws.

I guess this developer doesn't know the laws governing HOAs! Even while the assn is under control of the developer, the members do have certain rights. And, the right to see financial statements is one of them. Since it's been 2 years I can certainly understand the members' concerns. What really bothers me is the fact that you don't even know the name of the HOA. Didn't you receive copies of all the governing documents -- CCRs, bylaws, articles of incorporation? What about the public report that I asked you about? The Dept of Real Estate requires the developer to provide that to each purchaser. The report has the name of the HOA, the name of the "subdivider" (the developer), the effective date and a reference #. I believe, the ref. # is assigned by the R.E. Dept as a matter of tracking the report.

I know a lobbyist for the AZ Assn of Home Builders who I will contact to see if I can find out any info about this developer. I would think he would be a member! Please let me know about the public report!
MaryA1 (Arizona)
Posts: 7,043
Posted:
Quote:
Posted By GeorgerwilliamsW on 08/08/2008 2:24 PM
OK, Mary. Your are in charge. You have the knowledge none of us out-of-staters have.

Thx George! Now, I may have more knowledge about AZ issues, but all of you have a wealth of knowledge too. I'm sure there's a lot of good insight you can provide LA. This developer sounds like a real winner, if you know what I mean!!
LA (Arizona)
Posts: 10
Posted:
My neighbor just got a lien put on their house. Her and her husband are behind a few months because they felt the developer wasn't holding up his end. what do they do now? I haven't paid this past two months because a few of the other neighbors said they weren't going to pay until the developer gave them the documents.
GlenL (Ohio)
Posts: 5,491
Posted:
Quote:
Posted By LA on 08/13/2008 4:35 PM
My neighbor just got a lien put on their house. Her and her husband are behind a few months because they felt the developer wasn't holding up his end. what do they do now? I haven't paid this past two months because a few of the other neighbors said they weren't going to pay until the developer gave them the documents.

Call them first thing and assure them that the check is in the mail for the full amount plus any late fees and make darn sure you mail it; this might stop them from filing against you which is a "ding" on your credit and will require you to pay extra fees to have it released. Follow Mary's advice and council on the "proper" way to go about seeking the information you request. Until the HOA is turned over to the H/O's it's his (the developer) sandbox and his rules. While he doesn't have carte blanche to do as he wants it comes darn close so you have to be extra vigilant to follow the proper procedures.
Studies show that 5 out of 4 people have problems with fractions
MaryA1 (Arizona)
Posts: 7,043
Posted:
Quote:
Posted By LA on 08/13/2008 4:35 PM
My neighbor just got a lien put on their house. Her and her husband are behind a few months because they felt the developer wasn't holding up his end. what do they do now? I haven't paid this past two months because a few of the other neighbors said they weren't going to pay until the developer gave them the documents.

LA,

In my msg dated 8/8 @ 2:14 I advised:

"Secondly, regardless of what the developer has failed to do, it's very important to CONTINUE PAYING YOUR ASSN ASSESSMENTS. Please heed my words, you home could be foreclosed if you do not pay your assessments! Please inform you neighbors of this also."

I hope you will pay more heed to what I now suggest: Both you and your neighbor, who has now been liened, must pay up NOW. The next step after the lien is foreclosure. AZ law states a foreclosure cannot be entered into until the delinquent assessments amount to $1,200 or until delinquent for one year, whichever comes first. However, late fees, costs and attorney fees will continue to mount up until the delinquency is completely paid off. As for your 2-months delinquency, it's only a matter of time b/4 your property is liened. Withholding your assessments because you have a beef with the developer or the BOD is the worst thing an HOA member can do. A much better approach is to continue paying the assessments while trying to work out the problems. You assessments are no different than your mortgage payment. If you are unhappy with your mortgage company, I'm sure you know better than to withhold payment of your mortgage. I don't mean to sound harsh, but I've heard of so many members trying this tactic only to find themselves in a foreclosure and saddled with a huge debt, the bulk of which is comprised of attorney fees.

LA (Arizona)
Posts: 10
Posted:
they said they were told by a friend who said they can set up payment arrangements with the title company (the one who recorded the lien). Is this true? They say they can't afford to pay all of it.
GeraldT4
Posts: 1,022
Posted:
LA - Don't worry about what "they" say. Worry about paying what you owe plus any other expenses that have been incurred. You need to contact the your bank first.

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