L.P. from Middlesex County writes:
Dear Mister Condo,
I am a first-time home owner. For the first 2 years I lived in my unit I tried to be active in my (small) HOA, but the main Trustee never had time for me and HOA meetings were always cancelled. When he sold his unit, he hurriedly gave me a “crash-course” on duties a week before the closing. It wasn’t until weeks after that I realized he had conned me. He left me with unpaid bills (some a year old!), angry contractors, and one unit egregiously in the hole to the HOA. After weeks of talking with my neighbors, I got them to agree to a payment plan: they agreed to pay a minimum of their balance every month for 6 months—enough time to figure something out—and after 6 months they had to pay in full every month. A year later they are still only paying the minimum and have become even more in debt to the HOA with back fees and Reserve Studies. A friend’s wife—who is a lawyer—is helping me out with the lien process, but my question is this: what should I expect? This family (a retired couple and their adult son) have lived here for 20 years and now I (this young newcomer) is going to be threatening foreclosure. We all live in the same small building, run into each other often, and share a common stairwell. I feel terrible that I’m the one that’s going to be “evicting” them, but obviously they cannot afford to live here—we have not been able to do basic, needed maintenance for years because of their finances.
Mister Condo replies:
L.P., heavy is the head that wears the crown, my friend. People who purchase into an HOA do so at their own choosing. They are aware of the fees and costs associated with owning a home, condo, or unit within an association. While you are the embodiment of the HOA as it takes action against them for defaulting on their duty to pay their fees in timely fashion, they are also the makers of their own destiny. They need only look in the mirror to see the folks responsible for their demise. In fact, it is you they should be thanking for carrying their weight as they neglected to pay their fair share over the years. Where did they think the money would come from if they didn’t pay? Did they not realize that they were in fact forcing their neighbors to pay more than their fair share because they weren’t willing or able to pay theirs? You asked what should you expect? That’s really hard to say at this point. My guess is if these folks are insolvent, they will eventually be foreclosed upon and you will sell their unit and hopefully find some new owners who will fulfill their obligation to pay their fair share of the common fees. Eventually, the association should regain financial strength and get itself back on track. That is the nature of HOAs. The HOA is a not-for-profit business, the key word being “business”. Business is conducted under the terms of business agreed to by all parties. As long as those terms are met, the business thrives. When/if a party defaults, the business protects itself by exercising the clauses that make it a business, no more, no less. You are on the right track to getting back to business. Good luck!