HOAs Behaving B/a/d/l/y/ Criminally

I’ve seen some bad HOA reports, but this one takes the cake house.

“As a result of your actions, we will be invoking section II, Article 4 of the Bylaws, which allows the Board to foreclose on any property that is in violation.
[…]
If you are an owner, you or your tenants must vacate the property by April 30, 2020. You will still be responsible for any liens on your property, including mortgages.

Attorneys, please weigh in. I think I see a few issues here.

1. First off, the eviction notice appears to violate Tennessee eviction law, which I understand requires allow the resident an opportunity to “cure” the alleged offense, not to mention certain time frames (and specific reasons which don’t seem to include working from home in an emergency).

2. The HOA will “foreclose”? The HOA is the mortgage holder? That seems unlikely, as buyers normally get their own mortgages from whomever will give them the best rate.

3. Now, if the HOA believes that working from home during a pandemic somehow damages the Association so badly that they are entitled to these homes in recompense, wouldn’t they need to file a lawsuit and win, first?

4. If the HOA is the mortgage holder, and can theoretically foreclose, even that must follow state and federal law. This appears not to.

5. If the HOA is simply deciding to take the home, leaving the owner of record on the hook for the mortgage — presumably so it can resell the home to another sucker — that would seem to my unlawyerly mind to be theft (the unauthorized taking) and fraud (selling someone else’s property to another party). Isn’t that massively criminal?

6. Assuming #5, isn’t this a an organization (the HOA company/corporation) conducting an organized criminal action? Looks like a RICO case to me.

OK, attorneys; tell me where and how I’m wrong. Or right.

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4 thoughts on “HOAs Behaving B/a/d/l/y/ Criminally

  1. Paul Gross April 3, 2020 / 1:19 pm

    bear –

    The exposure here is that the landowner signed an HOA agreement (civil contract) when they
    bought the property. Further, the HOA can apply liens to the property based upon punitive
    fees ( “fines” ) for prior infractions. These liens MAY allow for foreclosure proceedings, if they
    reach a certain threshold, depending upon State law — similar to seizure for unpaid taxes.

    Owning a home in an HOA is tantamount to voluntarily agreeing to another level of government
    that can tax , fine, and push you around.

    How many stories have you read where some Veteran in a condo was told s/he couldn’t display
    old Glory, due to an HOA restriction on flags ?

    No HOA for me, thanks.

    Like

    • Bear April 3, 2020 / 1:37 pm

      “Further, the HOA can apply liens to the property based upon punitive fees ( “fines” ) for prior infractions. These liens MAY allow for foreclosure proceedings, if they reach a certain threshold, depending upon State law”

      But, per the letter, that is not what they’re doing. What you describe would involve 1) detecting infraction, 2) issuing a fine, 3) waiting for payment, 4) going to court for lien, 5) going back to court if lien not paid, 6) getting a judgement, 7) if still not paid, getting a judgement for seizure, and 8) forcing foreclosure.

      This letter skips straight from #1 to #8, with no apparent legal basis whatsoever. Under state and federal law, that’s unlawful. There are minimum times for nonpayment, and minimum times for orders and response. The time periods required by law alone are several times the 30 days this letter gives. There’s no mention of service, much less judgement.

      The letter is general enough that they are advising tenants that they are “foreclosing” on someone else’s property.

      Legally, they can’t do what they seem to be doing even if (unlikely) the HOA is the mortgage holder.

      Like

      • Paul April 6, 2020 / 12:05 pm

        Agreed.

        But if article 2, section 4 of the by-laws ( a copy of which the “tenant” should have received
        at the mortgage closing ) actually read that the HOA can foreclose, this is going to be a long ugly fight. And re-selling it would be unlikely if they can’t get clear title to property.

        I’ve lived in an HOA — and took a position on the Board in an honest attempt to improve things.
        What a shitshow.
        Never again.

        Like

        • Bear April 6, 2020 / 1:12 pm

          There’s plenty of precedent at state and federal levels that if a contract provision violates law, the contract provision is void, not the law. Where folks waive rights in a contract, an equivalent option (such as arbitration instead of court) has to be present. And several courts have tossed arbitration when the arbitrator is chosen and paid by one party.

          On the face it, this letter appears to violate two state laws and one federal law.

          Like

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