Foreclosure in McKinney>Question Details

Cannonfodder, Other/Just Looking in McKinney, TX

Can my HOA bill me legal fees for a missed payment when they didn't attempt to contact me throughout the year?

Asked by Cannonfodder, McKinney, TX Sun Oct 25, 2009

I have an HOA who just sent me a letter for foreclosing on my home over a 197 dollar payment. I had thought this matter was finished at the beginning of the year. Apparently I did not make a 2nd payment on the $390 bill. However, over the course of the year I have not received any phone calls, emails, letters on my door or in my mail box explaining I needed to make this payment. I have received a few certified letter notices that were probably from them (now that I am aware of this, its my guess). However, I live alone and they never get delivered. The little notices just tell you there is a certified letter no senders name, so if you do not pick it up, you don't get it. I haven't made the journey to the post office to get them. So now instead of 197 dollars, I owe an additional 600 in legal fees for a total of $900. Do I have any recourse? Should I pay and then take them to small claims court? A simple phone call on their part would have resolved this months ago.

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Naima Sumner’s answer
When you purchased the house, you agreed and you signed lots of documents to abide by the HOA bylaws and pay HOA dues. What they can do is spelled out in those documents. Did you not read them?

Unfortunately, the harsh truth is YES you can lose your house over $197 delinquency. HOAs don't come knocking on your door, they send certified letters to document the notice to you.

You need to get on the phone with them ASAP, arrange a payment plan or get an attorney if you don't think you should be paying them.

Good luck,

Naima
2 votes Thank Flag Link Mon Oct 26, 2009
Unfortunately, you may little recourse fighting your HOA. You have to understand how much power they have over you. To them, you're just a peon, a nobody. Those certified letters were notices to you informing you of missed payments.

Taking an HOA to court is nasty business, mostly for you. Most likely you'll lose and end up with all their legal fees. Lovely, huh? Yes, I agree, a phone call would've been nice.

So it's best just to pay what you owe right now, instead of delaying it or ignoring. Don't bother taking them to court.

It's best to deliver payment in person, and insist on getting a receipt for proof of payment.
1 vote Thank Flag Link Thu May 12, 2011
Im in the same situation with those stupid certified letters, now my bill is more than i can afford.
If i would have gotten notice via regular mail, the bill would have been paid.
Anyhow are you in stonebridge or live oak village? just curious.
And does anyone know if there are limits on the amount of legal fees that can be levied against a claim like this?
1 vote Thank Flag Link Fri Nov 20, 2009
Unfortunately for you and many homeowners the harsh truth is that HOAs have power. Fighting them will cost you money. No one ever brings these abuses up to the legislature to curtail their power, and fighting them on your own is 10 times as expensive as paying up.

The property you bought came subject to the association via the Covenants on the property. You should have received a copy of the Covenants at or before closing. The Covenants spell out your responsibilities and their powers. Normally, the Covenants state that at a particular time of year the dues are fixed and payable, usually in January. Whether you get a bill or not, a notice or not, letters, phone calls or any communication at all is irrelevant according to most CCRs (Covenants, Conditions & Restrictions).

Yes, as Mack and Grace point out, you usually will get a copy by un-certified mail of what was sent by certified mail and it is your responsibility to read the notice, and the notice is considered delivered when they deposit it, not if you pick it up.

You might try communicating with them, preferably by mail, that you did not receive the prior notices, apologize for heaven's sake, for the misunderstanding and send them a check for the original amount due, at a minimum. Ask in your letter if they will please forgive the additional fees. Of course, they will most likely refuse to remove them and bill you again for the missing amount.

Pay it. On your payment check write the property address and that you are paying under protest -- something like HOA Dues 123 Elm - PAID UNDER PROTEST. This notation, when presented in a court of law, indicates that you did not willingly pay them but rather under duress. If, and this is something you need to discuss with an attorney, you decide to sue them over the additional fees, it is best to show that you did pay them but under protest. You cannot sue them for a loss you had, if you didn't actually pay them. Justice of the Peace court can handle your lawsuit, but the judge will ask you to prove your loss so that he could potentially award payment to you. Refusing to pay altogether can have dire consequences.

Does the HOA have the power to foreclose? Yes. Will they? Some do. They're heartless idiots. The property is subject to liens that are superior to the HOA's lien. Taxes are always superior, period. If you have a mortgage loan, that lien is most likely superior as well, even though the CCRs were filed prior to the mortgage. The reason is that most CCRs contain a subordination clause, which basically puts the HOA's liens behind your mortgage even though filed first. Otherwise, lenders would not be disposed to offer mortgage loans on residential property.

But, the HOA must follow its own rules. The Covenants say what they must do in order to have a valid lien. The corporate By-Laws of the HOA itself also restrict how the HOA must act, and the HOA may have adopted additional regulations after the CCRs and By-Laws. These regulations, typically requiring consent of the homeowners affected, are refinements, like no swimming after 9 PM or no alcohol at the clubhouse, etc. The priority is that the CCRs must be followed by the HOA guided by the By-Laws, and lastly if not prohibited by the Covenants or By-Laws, the rules and regulations must be followed by both you and them.

The reason that the priority of liens and priority of documents is important is that if the HOA is required by the CCRs to follow a particular sequence of events to fine you or to foreclose, or if the HOA is prohibited from using agents to conduct proceedings against you, or if they must offer a hearing and did not, you have grounds to reverse the actions they took. The bad news is that you need to prevent them from foreclosing first and then sue them afterwards at great expense.
Further, most HOAs don't realize that the priority of liens means that their foreclosure does not prevent later foreclosure by taxing authorities or your mortgage company. They think they get the property free and clear. They don't. So, if they're holding title to the property and not paying the mortgage, they lose title to it. The same story with taxes. They went to all the trouble of wresting title from you and kicking you out, only to lose possession to someone else. Idiots. They take on the expense of your mortgage and taxes and insurance, if they actually foreclose.

Yes, do consult a lawyer, but you should send the HOA a nice (no nastiness) letter explaining your mistake and asking for forgiveness. (You don't want further aggravation -- just a solution.) After you have staved off the foreclosure, do what you should have done years ago and read the CCRs and By-Laws. Figure out your responsibilities and whether they followed the rules. Then try talking to the president calmly without remonstrations.

Good luck.
1 vote Thank Flag Link Mon Oct 26, 2009
Thank you all for your time on answering my question. I stand corrected on the cert letter issue. I didn't know what they were about but I had thought if a certified letter isn't signed off as received, then its not received. Thanks again..
1 vote Thank Flag Link Mon Oct 26, 2009
This is now a legal issue and best answered by an attorney who specializes in real estate law in Texas.

I suggest you call the title company where you closed on the home and ask that lawyer for a referral.

Always pick up certified mail. Ignoring it can lead to a chain of events that could be out of your control.

Have a blessed day.

Ronda Allen-Realtor and Certified Purchasing Manager
CEO of comingsoonhomes.com
RE/MAX Dallas Suburbs - Keith Dobbs Team
#1 Office and #3 Team for RE/MAX in North Texas at mid-year 2009!
Follow me on twitter: http://www.twitter.com/comingsoonhomes
1 vote Thank Flag Link Mon Oct 26, 2009
Yes. You're supposed to go pick up those certified letters, and your obligation is to pay your dues on time - not for the Association to figure out how to keep you informed in the manner most convenient to you.
You might call the responsible party - Treasurer of the Association or the Property Manager - and ask them to waive the legal fees and put off the foreclosure if you pay the amount due and the late fees.
1 vote Thank Flag Link Sun Oct 25, 2009
Hello Cannon and sorry to hear of your dilemma.

Although you did not retrieve them, the certified letters WERE notice to you of the funds due. Under most state laws, a recipient is deemed to have received the letter when it is deposited into the US Mail. Often lawyers will send notices to homeowners via both certified mail as well as regular US mail, but I see that this was not the case this time.

My suggestion is to pay off everything you owe to them right now. Otherwise, under most state laws, the amount due is subject to late charges AND interest penalties that will continue to accrue until the balance is paid in full. Unfortunately, the law office handling the collection has already charged your account for the fees, so the only way to resolve this is directly with the law offices.

First get the law offices out of the way, and then consider a small claims action against the homeowners association for their collection practices and policy. You would not need legal representation in order to appear before a small claims judge, but you should resolve this situation first before it gets any greater. In the meantime, I would strongly suggest that when presented with a return receipt to retrieve registered or certiifed mail, you take a few minutes to have these redelivered to you or pick them up at the office.

Good luck!!

Sincerely,
Grace Morioka, SRES, e-Pro, CID Consultant and Specialist
Area Pro Realty
San Jose, CA
1 vote Thank Flag Link Sun Oct 25, 2009
Good advice below.

Get a lawyer.

I'll refrain from any further comments re: "They didn't attempt to contact me throughout the year" when you acknowledge: "I have received a few certified letter notices that were probably from them." Hey, that's an "attempt to contact" you.

You say: "A simple phone call on their part would have resolved this months ago." That's what you say now. Besides, if you don't respond to certified mail, there's some reason to suspect you might not respond to phone calls.

If there's still an opportunity, pay the full amount due. And consider this a valuable lesson on notification procedures.
0 votes Thank Flag Link Mon Oct 26, 2009
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
In there mind the certified letters were the phone call. I would contact a real estate attorney if I was you.

RJ
Web Reference: http://www.findapadfast.com
0 votes Thank Flag Link Sun Oct 25, 2009
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