HOA member refuses to pay assessments

[stratos]

What is the name of your state? California

A homeowner in our association has refused to pay his assessments for over a year. His states his reason as never having recieved an invoice from the management association. He suspects that the previous owner had his mail forwarded to his new address and thereby never received an invoice. To further complicate matters, the management company was not aware of the change of ownership for over 6 months. The homeowner has subsequently refused paying his back assessments because of the penalty and interest attached to his balance. The management company has since turned this over to a collections agency who has filed a lien and started foreclosure proceedings. The homeowner in question is now threating to sue the management company, Board and HOA.

My question is, does this homeowner have a strong case if he is being truthful and did not recieve assessment invoices from the management company for over 6 months or is the burden of responsibility on him to know that he must pay his HOA assessments regardless of whether he recieved invoices? One would think that he recieved full disclosure reagrdign the HOA and required assessments when he purchased his home.

Thank you in advance for your help in this matter.

[HomeGuru]

Originally Posted by stratos

What is the name of your state? California

A homeowner in our association has refused to pay his assessments for over a year. His states his reason as never having recieved an invoice from the management association. He suspects that the previous owner had his mail forwarded to his new address and thereby never received an invoice. To further complicate matters, the management company was not aware of the change of ownership for over 6 months. The homeowner has subsequently refused paying his back assessments because of the penalty and interest attached to his balance. The management company has since turned this over to a collections agency who has filed a lien and started foreclosure proceedings. The homeowner in question is now threating to sue the management company, Board and HOA.

My question is, does this homeowner have a strong case if he is being truthful and did not recieve assessment invoices from the management company for over 6 months or is the burden of responsibility on him to know that he must pay his HOA assessments regardless of whether he recieved invoices? One would think that he recieved full disclosure reagrdign the HOA and required assessments when he purchased his home.

Thank you in advance for your help in this matter.

**A: the homeowner has no case for the simple fact of the CC&R's.

[stratos]

Homeguru - Thanks for your previous reply.

Just to follow up on this situation, the homeowner in question, who is an irrational zealot, met with the board last night and presented his side of the story. He still claims to never having recieved any invoices, which is hard to beleive because the management company never had any returned mail from the post office for his address. He however did recieve certified mail at that address, so his story is a little fishy and inconsistent. When asked whether he was even aware that there was an HOA for our development, he pleaded ignorance until he was contacted by the collections agency. He also claims not be in posession of our CC&R's, which would identify his responsibility to pay assessments.

The board told him that if this is the case, then he should go after the previous owner, listing agent and title company for not having provided full disclosure. He acknowledged this, but still repeated the threat that his attorney advised him to sue everyone involved, including the management company, HOA and Board Members.

The HOA will of course hire an attorney if he does file a law suit against us. My understanding is that we can also countersue to recover the cost of defending ourselves from this action. Can we sue for more than our actual cost of defense, or can we add more to the amount for all the time and trouble we have incurred as a result of his action?

[ENASNI]

Originally Posted by stratos

Homeguru - Thanks for your previous reply.

Just to follow up on this situation, the homeowner in question, who is an irrational zealot, met with the board last night and presented his side of the story. He still claims to never having recieved any invoices, which is hard to beleive because the management company never had any returned mail from the post office for his address. He however did recieve certified mail at that address, so his story is a little fishy and inconsistent.
The board told him that if this is the case, then he should go after the previous owner, listing agent and title company for not having provided full disclosure.
The HOA will of course hire an attorney if he does file a law suit against us. My understanding is that we can also countersue to recover the cost of defending ourselves from this action.

He acknowledged this, but still repeated the threat that his attorney advised him to sue everyone involved, including the management company, HOA and Board Members.

I highly doubt this is true, if the laywer was advising this he would also be advising him not to speak with you any further regarding this.

Can we sue for more than our actual cost of defense, or can we add more to the amount for all the time and trouble we have incurred as a result of his action?

I am sorry, are you asking for "pain and suffering here". Give me a break, you want the back assesments. You don't want punitive damages here. He may be a pain in your neck, but you can't sue for that.

When asked whether he was even aware that there was an HOA for our development, he pleaded ignorance until he was contacted by the collections agency. He also claims not be in posession of our CC&R's, which would identify his responsibility to pay assessments.

Then who is his lawyer going to sue? If there is a judge in this country that thinks that a housing community is not going to have CC&R's or a HOA I would like to mee that judge.

[stratos]

Just as a follow up to this soap opera. The board met with the homeowner a couple of weeks ago and it appears that he had a major disclosure issue or lack thereof when he purchased his home. He claims that he was not aware that there was an HOA and was not told so by his realtor, previous buyer, or title company. The board pointed out that we have common areas including a fountain and wouldn't this have clued him in to the idea that we lived in an HOA community. His response was that he believed that the city was maintaining these features. He still was claiming to never having received assessment invoices and was still threatening a law suit, but admitted that there may have been a problem with disclosure.

At that point the board suggested that he take action against only those responsible for his predicament and also pointed out that if he were to file a lawsuit, the HOA would file a countersuit to recover the costs of defending ourselves. His resposne was that he had a $500,000.00 war chest to use for this and had previously stated that he would fight this despite the cost and consequence.

As of today he has not filed his law suit, but he is lobbying hard to get on the board in the upcoming elections next month. He has created a list on non-issues and has even implied that the current board needs more financial scrutiny and that the elections are similar to that of third world dictatorships. The current board if working hard to counter his efforts to get on the board by collecting proxies and getting the association invlovled. My understanding is that we really can't divulge the true nature of this homeowners vendetta against the HOA for fear of getting slapped with a slander suit?

He may end up clearing his account with collections by the time of the elections and avoid foreclosure on his home, but if he is not a member in good standing at the time of the election, can he hold office? I have not been able to find anything in our bylaws or CC&R's about this. I was wondering whether this is a general rule.

[wayne-o]

The bylaws/ ccr's in my association says members cannot vote or be on the board if their dues are in arrears

[gawm]

Originally Posted by stratos

What is the name of your state? California

A homeowner in our association has refused to pay his assessments for over a year. His states his reason as never having recieved an invoice from the management association. He suspects that the previous owner had his mail forwarded to his new address and thereby never received an invoice. To further complicate matters, the management company was not aware of the change of ownership for over 6 months. The homeowner has subsequently refused paying his back assessments because of the penalty and interest attached to his balance. The management company has since turned this over to a collections agency who has filed a lien and started foreclosure proceedings.

God forbid your HOA should try to work with him There seems like there was a little miscommunication here. Why not waive the penalties and interest and just ask for the back dues? What does he owe? A couple of hundred dollars? AHHH, just throw him out on the street. And people wonder why HOA are getting a bad name.

[stratos]

Unfortunately,it's actually a lot more than just a few hundered dollars. It is over $2,000.00 and counting. I don't know if you have read the entire thread, but this guy hasn't paid his monthly assesments for over a year and ignored the pre-lien stage at which point he could have cleared this at a minimal cost. The board may even have been willing to share the pre-lien collection agency costs. The problem is that his home is now in default and it is out of the HOA's hands. He is the one who needs to clear this with the collections agency.

The problem in this country more and more is that people want to blame others for their mistakes. It takes a big person to admit to an error and try and find a solution without lying, threatenting and becoming belligerent about the matter. There is only so much you can do for some people. Sometimes you just have to let them fail and hope they learn.

[gawm]

How much of that 2,000 is actually the assessments? Before the lien, how much more were you charging for penalty and interest? Double? Triple? When it comes to peoples homes and they feel they are being treated unfairly they do get a little irrational. Their are many other avenues you can take to try a recover the lost assessment but the one HOA always choose is fore closer.

[stratos]

I can tell you have a strong opinion on this , but I don't think you understand the situation here and can clearly see the ramifications of what you propose. The HOA turned this over to a collections agency after 10 months of his account being in arrears. Our standard policy is that it goes to collections after only three months, so I think you can say the board was being very generous in this case and gave him ample time to clear his account. After it goes to collections it is the homeowners responsibility to clear this account. Not the HOA's. The problem here is this guy just ignored the problem until it became critical. Tell me, would we be upholding our fiduciary responsibilities if we "bailed" out this homeowner? Don't you think that the other homeowners might be a little upset at the Board if they found out that we spent the HOA's money in this manner?

At this point I think a quote from the film "Cool Hand Luke" in order.

"What we got here, is...failure to communicate. Some men you just can't reach. So you get what we had here last week. Which is the way he wants it. Well, he gets it. I don't like it anymore than you men."