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Subject: Delinquent HOA member dues - Connecticut
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Author Messages
GwennS
(Connecticut)

Posts:5


05/23/2021 8:19 AM  
I became Treasurer of our HOA two years ago. There is a homeowner who has not paid the past 10 years' homeowners dues. We plan to file a suit in small claims court as the total due is under $5,000. We have corresponded with the homeowner a number of times and they have stated their intent to pay the dues in installments but we have not seen a penny from them. I have emails stating all this. Is there a statue of limitations in Connecticut regarding how many years' dues we can collect? I can't seem to find this information in my internet research.
MelissaP1
(Alabama)

Posts:10595


05/23/2021 8:29 AM  
Worst idea ever to file a lawsuit. Never do that to collect HOA dues. The HOA has two options. Lien or foreclosure. A lien means they can NOT sell their house without paying the lien. The lien covers the legal expenses for filing the lien, back dues, interest, late fees, and other related collection expenses. (certified letters etc...) There is still room for negotiation if they will pay back dues. Can let the interest and collection expenses go.

A foreclosure is a STOP the bleeding step. It occurs after a lien that foreclosing on. Our policy is to CONSIDER foreclosure after a year. IF the bank is foreclosing, then we will keep the lien. Otherwise doing the work of the bank that will get paid first and foremost.

A foreclosure is not a profit making adventure. The HOA never wants to own the home. It's a bad idea. There is a right of redemption period in many states up to a year. Meaning the HOA can't touch the house for a year. Plus may have to make house payments, repairs, maintenance, insurance, utilities, and HOA dues. Unable to rent for a profit as the HOA is a non-profit. Selling could result in a big tax bill.

If you decide to go the foreclosure route understand this could be a year to resolve. Plus your HOA will only be getting the money owed to it. It's filling in a hole with hopes the next owner doesn't make a new one.

Should include a lien progresses and keeps adding the unpaid dues. Lawsuits is a set amount. It does not accumulate. Plus the owner could sell their house and move without paying a dime. It cost the HOA money to collect. Plus the HOA has no right to one's social security number. Making some collection options more difficult.

A lawsuit makes for "good tv" it doesn't result in the best results in real life.

Former HOA President
GwennS
(Connecticut)

Posts:5


05/23/2021 8:37 AM  
Thanks for your advice. I was concerned about the expense of placing a lien on the property and if it made sense but if it's true that the member would pay the related fees then that issue is resolved.

A neighboring HOA has filed small claims suits against delinquent members and has been successful. I figured it would be the least expensive route to go.

But I would like to find out if I can collect all 10 years dues or is there a statute of limitation. Previous board members have asked for the delinquent fees to no success.

AugustinD


Posts:1937


05/23/2021 8:49 AM  
Posted By GwennS on 05/23/2021 8:19 AM
I became Treasurer of our HOA two years ago. There is a homeowner who has not paid the past 10 years' homeowners dues. We plan to file a suit in small claims court as the total due is under $5,000. We have corresponded with the homeowner a number of times and they have stated their intent to pay the dues in installments but we have not seen a penny from them. I have emails stating all this. Is there a statue of limitations in Connecticut regarding how many years' dues we can collect? I can't seem to find this information in my internet research.
I googled for: connecticut debt statute of limitations. It seems a creditor can lawfully seek debt via a lawsuit for up to six years after the debt is incurred. But I suspect there may be nuance to this, and your HOA might very well be permitted, under the law, to go after every dollar owed going past six years.

I am not an attorney. I am experienced with HOAs, condos and lawsuits of a few flavors involving same. I post to help prepare folks for meetings with attorneys, so that maybe the folks have a better command of the vocabulary and law that the attorney may reference.

At this forum, I think most of the veterans speak of two options that are particularly cost-effective and effective in general for collecting debt:

-- Just place a lien on the home, pursuant to what the HOA's governing documents (covenants and bylaws) and state statute for HOAs/COAs permit. Once the home changes hands via a sale, the debt will be paid off in the course of the sale.

-- Hire an attorney specialized in debt collection. The attorney will take his/her fair share but the pit bull and legal tactics the attorney used can be a mighty deterrent to other members thinking of not paying their assessment. Using a debt collection-specialized attorney is often an excellent investment.

In my (not too vast) experience with HOA/COA debt collection, collection companies are not as effective (and are often more costly) as attorneys specialized in debt collection.

GwennS
(Connecticut)

Posts:5


05/23/2021 8:57 AM  
Thank you. The problem with the lien is we may not see the money until they sell the house, which could be years from now. Even without a lien, the homeowner would have to be up to date with their dues before they could close on the sale of the property. Usually the purchaser's realtor or attorney calls us to confirm that the dues are paid up.
AugustinD


Posts:1937


05/23/2021 9:00 AM  
Posted By GwennS on 05/23/2021 8:37 AM
T I was concerned about the expense of placing a lien on the property
Based on discussion here and specific experience where I am (which is not Ct), nationwide I believe liens are darned cheap to record with the county clerk. A call to your county clerk will likely answer your questions.

I caution you: Certain steps are likely required to ensure the recorded lien is bulletproof. Your HOA must speak with an attorney for direction on how to proceed.
AugustinD


Posts:1937


05/23/2021 9:03 AM  
Posted By GwennS on 05/23/2021 8:57 AM
Thank you. The problem with the lien is we may not see the money until they sell the house, which could be years from now. Even without a lien, the homeowner would have to be up to date with their dues before they could close on the sale of the property. Usually the purchaser's realtor or attorney calls us to confirm that the dues are paid up.
Correct. In my mind, the choice is either (1) lien and wait it out, continually adding late fees and interest as allowed by the governing documents and state law; or (2) hire a debt-collection specialized attorney, and let the attorney take her or his chunk out of the proceeds.

I understand you may not like either of these choices. The world is not perfect and so on.
GwennS
(Connecticut)

Posts:5


05/23/2021 9:08 AM  
I'm hoping a pre-lien notice of intent to file will encourage the member to pay up.
MelissaP1
(Alabama)

Posts:10595


05/23/2021 9:14 AM  
Remember a foreclosure is on the filed lien. Which if the lien is unpaid in let's say a 1 year, then you can foreclose on that lien. This is something would put in the notification on the foreclosure possibilities for not paying up. Usually notification of a lien may get a small reaction but knowing they can wait it out not so much.

Plus some states do require an attorney to file a lien. However, the cost is like 4 to 500 dollars. Which is part of the lien that is to be paid back. Some legal services may do it as well instead of a full attorney. Which NO you do not need a retainer on.

Former HOA President
JohnC46
(South Carolina)

Posts:11667


05/23/2021 9:32 AM  
Gwenn

Most owners have little respect for their BOD thus they ignore letters/requests from them. You need to put fear into people, not slap their wrists with a wet noodle ala a letter from the BOD). The best way to do this is a letter from an attorney threatening a lien and possible foreclosure. Such a letter will typically cost $150.00. Remember it is only a letter. No action taken.

In many state an attorney is not needed to file a lien. Typically they can be filed in small claims court by and Officer of the association for less than $100.00.
AlP7
(Delaware)

Posts:1


05/26/2021 4:58 PM  
What about a wage garnishment?
MelissaP1
(Alabama)

Posts:10595


05/26/2021 5:44 PM  
The HOA has no right to anyone's Social Security numbers. Plus no need for knowing where you work. So wage garnishment would be a bit more difficult without that information.

Former HOA President
SheliaH
(Indiana)

Posts:4297


05/26/2021 6:52 PM  
Ew, what a flashback from my 5 years as treasurer for our HOA board! When I joined the board, there was an owner who was three years behind at the time and throughout the 10 years I served she'd pay a little, then stop, we'd sue and file to do a foreclosure, and a day or two before, she'd declare bankruptcy which of course stops all the collection processes. Then she'd fail to do whatever the court ordered her to do, the case would be thrown out and we'd start over.

That woman lead us to strengthen our procedures, and it wasn't easy because the real estate market was going crash at the time. Today, the board has reduced a lot of the delinquencies - I don't know all the details, but I think the homeowner who was such a pain in the ass is still here (her mortgage company added the association fee to her balance).

Anyway, You will have to sue this homeowner and get a lien on the house at the very least. It's true foreclosure can be a mixed bag - sometimes that prompts the mortgage company or someone to cough up the money, but usually, the best you can hope for is to get the person out of the house. AS I see it, you may not get the money anyway, so why should that homeowner continue to get services and be subsidized by everyone else? I'd rather see the house sit there until someone responsible buys it.

If the homeowner tries bankruptcy, be sure to file a claim with the court and follow up. At one point, I attended a hearing with our attorney because I was prepared to bless out this deadbeat in front of everyone. Instead, the court announced it was throwing out her case (again - I think that was the third time at that point) and even the woman's attorney told us he'd ended his representation (guess he didn't get paid either or found her just as trifling).

It may also help to keep an eye on the property taxes. If the city or county files a lien, it'll get paid before anyone, followed by the mortgage company and then the HOA (meaning you'll still be SOL). In a few states, the first one to file gets dibs on the property, even before the mortgage company, which is rare. Our attorney once suggested buying a property tax lien that had been filed on another house - don't know how that ended because I'd left the board by then.

Oh, and the wage garnishment? That might work, but remember if the person leaves that job, you'll have to find out where he or she works and file the paperwork with the court all over again. You may even be able to garnish the rent payment if the house or condo is being rented out. The problem is, the tenant may need to sign off on the paperwork and if he or she can't or refuses to, you're dead in the water (not to mention the tenant may then leave without paying anything).

As you can see, all of these options require careful thought, so however this ends (and be prepared for it NOT ending well), you need a collection policy RIGHT NOW. Talk to your association attorney about setting it up - there are lots of old conversations on this website with good ideas (just remember they're old - if you have questions, start a new conversation because things may have changed). Once you establish the policy, send a copy to the homeowners. In fact, we do this every year when we send out the upcoming year's budget. One of the most important elements is timeliness - you have to jump on these accounts as soon as you can because the longer you wait, the less likely you'll collect anything (a pox on your predecessors on that board who let this go on without doing anything).

Good luck!

DaveP8
(Oklahoma)

Posts:38


05/27/2021 4:35 AM  
Wow SheliaH, I think that woman's twin brother lives in our neighborhood.
CathyA3
(Ohio)

Posts:2607


05/27/2021 5:00 AM  
What I learned when dealing with this stuff in my community:

In my state, placing a lien is straightforward - we just ask the attorney to do so, and it is done. There is a small charge, but this is added to the delinquent owner's account along with any other collection costs. I agree with others that the collection letters should come from the association's attorney.

Moving to foreclosure is a long process, and the board must follow all legal steps to the letter if they want to be successful. They should document all of the steps taken to get the owner to pay. They want a clear history of bending over backwards to work with the owner, just in case this ends up in front of a judge who views all HOAs as bullies that mistreat owners.

Foreclose is most likely to be successful if the homeowner has stopped paying altogether. Occasional small payments will probably be interpreted by the court as the homeowner making a good faith attempt to pay the debt, whether or not that's actually the case. Fortunately for HOAs, there is a limit to how frequently someone can declare bankruptcy, so that's not a get-out-of-jail-free card for deadbeats.

If the person is paying in dribs and drabs, then going to small claims court is a reasonable option. The homeowner gets a wake-up call, the HOA gets some of their money. The downside is that the HOA is limited to the amount owed at the date of filing and it's not a permanent solution.

We dealt with two serious delinquency cases when I was on the board. One is similar to the homeowner in the OP's community: owner knows how to play the game, chronically unemployed, has filed bankruptcy once, and now appears to have some sort of disability although they haven't requested an accommodation. We are never getting rid of this person, although they got a wake-up call themselves when we successfully foreclosed on the other delinquent owner. The second one was a perfect storm of things going right: owner with attitude problem stopped paying altogether, ignored payment plans, ignored collection letters, foreclosure auction netted about $50,000 over minimum bid thanks to a hot real estate market in my area and a newbie investor buyer who overpaid (the association did make money on this one).
JimC24
(Connecticut)

Posts:37


05/30/2021 6:16 PM  
Hi GwennS,

I am on the Association and the Board at a condo also in CT. When I became the condo president I found that several people had not paid condo dues for an extended period. I was worried that there may be some limitations to how far we can go back to collect. My records showed that the worst offender hadn't paid for four years. I don't want to give you bad information, but I don't believe there are any limitations on how far you can go back to collect. I do remember that four years was not a problem. What I did was I contacted the owner and notified them that our records showed that he had not paid dues for the last four years and informed him of the delinquent balance. Of course he stalled and tried to propose a slow motion payment plan. This went on for a while and became frustrating. I then told him if he paid the delinquent dues over the next six months that I would not charge him late fees, but if he did not agree that I would turn it over to our lawyer and he would not only have to pay the back condo dues, he would also be charged some legal fees and late payment fees. After watching the process - here is how I understand it works. The lawyer or property manager notifies the owner with a letter that they are delinquent on condo dues payments. I think they have 60 days to pay the balance before the condo can exercises its lien and start a foreclosure process on the owner. The lawyer will do a search for other lien holders, which usually includes the bank, so the bank will be notified of the foreclosure process. More often than not the bank will choose to pay the back condo dues, legal fees and late fees. This is more likely to happen if the owner is still current on the mortgage, they don't want to foreclose on homeowner that is paying their mortgage. If the owner is not current on the mortgage, there is a greater chance that the bank will start its own foreclosure process to take a more senior position in the foreclosure process. If the bank forecloses, then they are only obligated to pay for I think 9 months of back condo dues and probably no late fees. Even when the bank chooses to pay the condo dues - I don't think it is a positive experience for the homeowner. Either the balance gets added to the principal or the Escrow account. Knowing the way banks operate, I am sure they take every advantage to charge fees for this - but thankfully I never had to experience this myself. I can give you the name of the lawyer I used but I don't want to violate the site rules or make it sound like I am advertising, but you should be able to find a lawyer pretty easily to do start this process. It probably won't cost you anything - all the legal fees went to the homeowner in my case. You want to notify the owner and tell them that your records show they hadn't paid condo dues from "Start Date" to "End Date" and to please provide evidence of payment. It will take them a while to get back to you - longer if they haven't paid. Then go from there. You don't need to go to small claims court. Good luck!
AugustinD


Posts:1937


05/30/2021 8:13 PM  
Posted By JimC24 on 05/30/2021 6:16 PM
I then told him if he paid the delinquent dues over the next six months that I would not charge him late fees,
Good to know that in Connecticut, a condo president can bill a delinquent owner for late fees as the condo president sees fit. JimC24, by any chance did you arrange a separate account, in your name, to deposit any late fees that you do decide to bill delinquent owners? This might be helpful to your county's district attorney.
JimC24
(Connecticut)

Posts:37


05/31/2021 7:14 AM  
Posted By AugustinD on 05/30/2021 8:13 PM
Posted By JimC24 on 05/30/2021 6:16 PM
I then told him if he paid the delinquent dues over the next six months that I would not charge him late fees,
Good to know that in Connecticut, a condo president can bill a delinquent owner for late fees as the condo president sees fit. JimC24, by any chance did you arrange a separate account, in your name, to deposit any late fees that you do decide to bill delinquent owners? This might be helpful to your county's district attorney.




No I know you're joking. It was the lawyer the determined what was appropriate to charge for late fees. The amount was $25 for each late payment which adds up to $1,200 over four years. The bank paid it. The owner who lived in a posh home in another town sold the unit shortly afterward via a short sale.
AugustinD


Posts:1937


05/31/2021 7:30 AM  
-- JimC24, are you the only one on the Board?

-- If there are a few directors on the Board, has a Board majority delegated negotiating settlements of delinquent accounts to you?

-- Or are the other directors so disinterested that everyone recognizes you as the go-to guy and the only one capable of getting this sleepy puppy (your condo association) moving?

JimC24
(Connecticut)

Posts:37


05/31/2021 12:18 PM  
AugustinD

There are other people on the board but generally most people are disinterested or afraid of confrontation. I don't enjoy putting other owners or my neighbors in collection - it's not fun at all and it doesn't make me very popular. One lady that was behind 18 months and would not answer our calls for a payment plan came to my door yelling and crying after she received a collection letter. It may sound like I am exceeding my authority - I wish someone would call me on it - but no one will because that would mean they would have to step up and no one wants that as long as I or someone else am doing the dirty work. We hired a property manager a few years ago - so collections now fall on him. He doesn't act as fast as I would like, but it's beats doing it myself. Haha sorry if I made it sound like I was bragging.
JimC24
(Connecticut)

Posts:37


05/31/2021 12:18 PM  
AugustinD

There are other people on the board but generally most people are disinterested or afraid of confrontation. I don't enjoy putting other owners or my neighbors in collection - it's not fun at all and it doesn't make me very popular. One lady that was behind 18 months and would not answer our calls for a payment plan came to my door yelling and crying after she received a collection letter. It may sound like I am exceeding my authority - I wish someone would call me on it - but no one will because that would mean they would have to step up and no one wants that as long as I or someone else am doing the dirty work. We hired a property manager a few years ago - so collections now fall on him. He doesn't act as fast as I would like, but it's beats doing it myself. Haha sorry if I made it sound like I was bragging.
AugustinD


Posts:1937


05/31/2021 6:38 PM  
I understand, Jim. One director getting dumped on to do all the work is unfortunately not uncommon. Thank you for clarifying.
BenA2
(Texas)

Posts:1114


05/31/2021 7:02 PM  
Posted By MelissaP1 on 05/23/2021 8:29 AM
Worst idea ever to file a lawsuit. Never do that to collect HOA dues. The HOA has two options. Lien or foreclosure. A lien means they can NOT sell their house without paying the lien. The lien covers the legal expenses for filing the lien, back dues, interest, late fees, and other related collection expenses. (certified letters etc...) There is still room for negotiation if they will pay back dues. Can let the interest and collection expenses go.

A foreclosure is a STOP the bleeding step. It occurs after a lien that foreclosing on. Our policy is to CONSIDER foreclosure after a year. IF the bank is foreclosing, then we will keep the lien. Otherwise doing the work of the bank that will get paid first and foremost.

A foreclosure is not a profit making adventure. The HOA never wants to own the home. It's a bad idea. There is a right of redemption period in many states up to a year. Meaning the HOA can't touch the house for a year. Plus may have to make house payments, repairs, maintenance, insurance, utilities, and HOA dues. Unable to rent for a profit as the HOA is a non-profit. Selling could result in a big tax bill.

If you decide to go the foreclosure route understand this could be a year to resolve. Plus your HOA will only be getting the money owed to it. It's filling in a hole with hopes the next owner doesn't make a new one.

Should include a lien progresses and keeps adding the unpaid dues. Lawsuits is a set amount. It does not accumulate. Plus the owner could sell their house and move without paying a dime. It cost the HOA money to collect. Plus the HOA has no right to one's social security number. Making some collection options more difficult.

A lawsuit makes for "good tv" it doesn't result in the best results in real life.



I agree that a lien is the first and easiest measure to collect but I strongly disagree about foreclosing on a $5,000 debt. We are talking about the forced sale of someone's home and the legal fees will likely be more than what is collected.

I don't know about Connecticut but in most states small claims courts are set up to be easy and inexpensive. In many states, lawyers are not allowed in small claims court so legal fees are minimal.

Lawsuits are how we enforce civil law. I'm not sure why you have such an aversion to them but it is misplaced. We are a nation of laws and the courts are an appropriate venue for settling legal disputes.
CathyA3
(Ohio)

Posts:2607


06/01/2021 4:56 AM  
Posted By JimC24 on 05/31/2021 12:18 PM
... snip ...
I don't enjoy putting other owners or my neighbors in collection - it's not fun at all and it doesn't make me very popular. One lady that was behind 18 months and would not answer our calls for a payment plan came to my door yelling and crying after she received a collection letter. It may sound like I am exceeding my authority - I wish someone would call me on it - but no one will because that would mean they would have to step up and no one wants that as long as I or someone else am doing the dirty work. ... snip ...



I felt the same way when during my first year or so on the board, but after dealing with a few deadbeats with bad attitudes, I was over it. These folks have no problems with stiffing their neighbors. And I wasn't the one who put them in that position: they did it to themselves, much as they wanted to pretend otherwise.

You also might want to look in your bylaws. Mine list collections and foreclosure as part of a director's duties. It's not optional, and it's not exceeding the board's authority.
GwennS
(Connecticut)

Posts:5


06/07/2021 12:48 PM  
So, I sent a letter to the delinquent homeowner, certified mail, return receipt requested. I gave them a month to pay up their account. I said if we do not receive payment we will seek alternate means of collection. They were not at home to accept the letter and have not picked up the letter from the post office. I'm afraid they won't accept the letter. We know for a fact that they are not suffering financially. They just don't want to pay the dues. In my state, we cannot levy a lien until we take them to court. I'm thinking I go to their mortgage company first for payment (although they do not have a PUD Rider on file) and then to small claims court if I don't have success with the mortgage bank. Can I move ahead if I do not have confirmed receipt of the letter from them? According to our by-laws they cannot sell their home until the dues are all paid up so eventually we'll get payment but who knows when they will move.
MaxB4
(California)

Posts:1614


06/07/2021 1:05 PM  
Foer the past two years I have had issues getting the USPS to get letters with returned receipt requested properly delivered, especially to HOA's or Condos with cluster boxes.

You mention there isn't a PUD Rider on file, by who, the association or the lender. If the borrower didn't sign a PUD Rider or one isn't recorded, you might have a problem. I know the recorded lien is an enforceable document, unless the property is foreclosed. If you have a law firm, I would ask for their guidance as they who know you state's rules of HOA's and collection practices.
MaxB4
(California)

Posts:1614


06/07/2021 1:27 PM  
Here is a link to a PUD Rider

https://www.hud.gov/sites/documents/Model_PUD_Rider_9-2014.pdf
JohnC46
(South Carolina)

Posts:11667


06/07/2021 6:37 PM  
FYI our most delinquent owner is 3 years behind (we do have a lien) but we
were curious so we discussed with an attorney the subject of a foreclosure. The first
issue is it will cost our HOA about $5K with no guarantee of any money to the HOA
as it depends on how much/many will get paid which is in relationship to the equity in the home.
The attorney said for about $750 he could pull the numbers together so then we can discuss it.

Generally, I advise against foreclosures as they are expensive, time consuming, and legal
maneuvers can delay them. Unless the numbers are really in favor of the HOA, I will advise against.

Also one has to look at other things. In this one case it is a young family who just had their
2nd child and as we are small patio homes, I expect they may be discussing selling and buying a bigger place.
MaxB4
(California)

Posts:1614


06/07/2021 6:55 PM  
Posted By JohnC46 on 06/07/2021 6:37 PM
FYI our most delinquent owner is 3 years behind (we do have a lien) but we
were curious so we discussed with an attorney the subject of a foreclosure. The first
issue is it will cost our HOA about $5K with no guarantee of any money to the HOA
as it depends on how much/many will get paid which is in relationship to the equity in the home.
The attorney said for about $750 he could pull the numbers together so then we can discuss it.

Generally, I advise against foreclosures as they are expensive, time consuming, and legal
maneuvers can delay them. Unless the numbers are really in favor of the HOA, I will advise against.

Also one has to look at other things. In this one case it is a young family who just had their
2nd child and as we are small patio homes, I expect they may be discussing selling and buying a bigger place.



I can save you guys $750.00, don't do it.
MelissaP1
(Alabama)

Posts:10595


06/08/2021 4:25 AM  
Actually foreclosures are not necessarily that expensive. They are more than a lien but not by that much. Legal expenses are part of the money to get back as part of the foreclosure process. I think it was just $850 for the lawyer to file the foreclosure. May had to pay for a few additional things like legal notices in the newspaper. Otherwise, the opening bid at the foreclosure is what is owed the HOA.

Keep in mind that a foreclosure is ONLY a "stop the bleeding" process. It makes no profit. It just lets the HOA fill in a hole of debt and give a chance to get a new paying member in. If your looking for "profit" your barking up the wrong tree. Plus the HOA just never ever wants to own the home ever. Most likely the bank gets paid first anyways for any debts owed. So realy expect the process to take over a year to see any type of pay back or change of hands.

Former HOA President
CathyA3
(Ohio)

Posts:2607


06/08/2021 6:16 AM  
A lot of things have to go right for a successful foreclosure. As others noted, it costs money, so the board needs to make sure that the potential outcome justifies the expense. And state laws vary. Our attorney was our collection agent, so was involved in the process all along.

Best chance for foreclosure: homeowner has stopped paying altogether, will not communicate with the HOA, owes a significant amount (however you define "significant" in your particular case), and has not filed for bankruptcy. It also helps if a mortgage company is not involved because they will generally be the senior lien. If a mortgage company is involved, then you'll need to set a minimum auction bid high enough to clear that lien before the HOA will see any money. In this case, hope that a clueless newbie investor overpays for the property (it can happen in a hot real estate market with a property in a desirable area). Finally, there are judges out there who think that HOAs are nasty bullies beating up on poor homeowners and who will use any available reason to find against the HOA. This means that the association must follow correct procedures to the letter, and have a paper trail showing that they did everything possible to work with the homeowner before attempting to foreclose.

Small claims court can be helpful for smaller debts and in cases where the owner has at least made occasional attempts to pay. If nothing else, it will get the owner's attention. The bad thing is that you're limited to the amount owed at the time you filed your case - any subsequent debt will not be touched, and if you're dealing with someone who is a chronic non-payer, you may be looking at repeat visits to court.

Our one successful foreclosure involved:

* An owner who stopped paying altogether because she was angry at the COA (ie., the owner was clearly in the wrong and had put it in writing).

* Repeated well-documented failures by the owner to comply with a payment plan. (Payment plans can work for people who are willing to pay but have financial issues, not for those who refuse to pay - but they demonstrate the association's willingness to work with the owner, so are worth doing).

* Collection attempts handled by our attorney who complied with all legal requirements.

* Hot real estate market in my part of the world and a community that is in high demand.

* Newbie, clueless investor who overpaid (in my opinion).
MaxB4
(California)

Posts:1614


06/08/2021 6:43 AM  
You are only foreclosing on the lien of the HOA, not the mortgage, so whoever is bidding has to eventually satisfy all the liens against the property. If no one bids the HOA now owns the lien and is subject to now paying the assessments going forward, not the owner. If the bank(s) foreclose on the mortgage, the HOA may or may not get any money, all they want is their money.
DaveP8
(Oklahoma)

Posts:38


06/08/2021 5:09 PM  
The HOA needs to make sure other homeowners are aware that failing to pay dues is unacceptable. If it takes foreclosure of a deadbeat property owner, so be it. This would send a powerful message that the HOA is serious about dues and will not tolerate non payment.
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Forums > Homeowner Association > HOA Discussions > Delinquent HOA member dues - Connecticut



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