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Thread: For the real estate people out there, HOA question (North Carolina)

  1. #1

    For the real estate people out there, HOA question (North Carolina)

    I live in a small private HOA subdivision (about 10 houses total) in western North Carolina.

    There is one house that has delinquent on their dues for years (think thousands of dollars).

    Long story short, the house has been rented/vacant for 2+ years, and is currently For Sale.

    I tracked down the owner via the county's website and they are based in Texas.

    couple of questions:

    * How would be the best way to try and get this money?

    * As for the house be for sale now, is there any stipulation that can be placed in the contract when the house is bought that the existing owed dues would be paid?

    Thanks.

  2. #2

    For the real estate people out there, HOA question (North Carolina)

    What’s the HOA’s lawyer say? A lien is the obvious answer.

  3. #3
    I am President of an HOA in upstate SC that consists of about 48 properties surrounding a 22 acre lake. We have 2 members that have refused to pay dues and assessments for the whole time I have lived here (12 years) and I too am talking thousands. We have tried chasing this money many different times but our HOA has a hole in it that basically leaves us with no iron clad way to get those funds. We have closed off access to these members with signs in front of their lake property and legal letters sent to them restricting access to the lake.

    Unless your HOA says explicitly that liens will be placed on all properties that do not pay dues and that this is recorded down at the court house, you can't get that money.

    I do not think you can put that kind of stipulation into a real estate transaction but I am no lawyer. It would be best to just start from scratch with the new owner. You don't want to create any bad feelings with him as its not his fault

  4. #4
    I don't believe we have an HOA lawyer.
    I have a copy of the HOA by laws/agreement. I will check to see if there is a stipulation about liens placed on houses for lack of payment.

    Our big issue is that we are needing the road to be repaved and with the fairly steep grade of the road, it is pretty expensive to do.

  5. #5
    Quote Originally Posted by DeacOnCapeCod View Post
    I don't believe we have an HOA lawyer.
    I have a copy of the HOA by laws/agreement. I will check to see if there is a stipulation about liens placed on houses for lack of payment.

    Our big issue is that we are needing the road to be repaved and with the fairly steep grade of the road, it is pretty expensive to do.
    There are two legal documents you need to review: 1) the bylaws, and 2) more critically, the declaration of covenants, restrictions and easements that goes with the title of each home and that establishes the legal authority of the HOA. This is where the lien right will most likely be located.

    Most HOAs established in the last 30 years (or more) will have this right as a matter of course, but it's always possible yours does not.

    The HOA should really consider hiring an attorney to make sure this is done correctly. In most cities of any size there are law firms that specialize in HOA stuff and they will work at reasonable rates. Google [your city] HOA Lawyer and see what comes up.

  6. #6
    I disagree with you
    ImTheCaptain's Avatar
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    surely the Mafia is active in the western Carolinas

  7. #7
    Quote Originally Posted by Deacon923 View Post
    There are two legal documents you need to review: 1) the bylaws, and 2) more critically, the declaration of covenants, restrictions and easements that goes with the title of each home and that establishes the legal authority of the HOA. This is where the lien right will most likely be located.

    Most HOAs established in the last 30 years (or more) will have this right as a matter of course, but it's always possible yours does not.

    The HOA should really consider hiring an attorney to make sure this is done correctly. In most cities of any size there are law firms that specialize in HOA stuff and they will work at reasonable rates. Google [your city] HOA Lawyer and see what comes up.
    Thanks for the info. I have a feeling that we are going to need to update it and include the necessary language.

  8. #8
    Quote Originally Posted by Deacon923 View Post
    There are two legal documents you need to review: 1) the bylaws, and 2) more critically, the declaration of covenants, restrictions and easements that goes with the title of each home and that establishes the legal authority of the HOA. This is where the lien right will most likely be located.

    Most HOAs established in the last 30 years (or more) will have this right as a matter of course, but it's always possible yours does not.

    The HOA should really consider hiring an attorney to make sure this is done correctly. In most cities of any size there are law firms that specialize in HOA stuff and they will work at reasonable rates. Google [your city] HOA Lawyer and see what comes up.
    Our problem is our bylaws are over 50 years old and the HOA was never filed with the county even though we still have to pay property taxes. We have had the cities best real estate lawyers look at things and there isn't anything we can do. If we wanted to revise the bylaws, everyone in the HOA would have to agree to having a lien placed on them for non payment on dues and assessments. Those that haven't paid in the last 12 years would never sign such a document.

  9. #9
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    Yeah, there are problems when an HOA is too strong and is run by jerks who feel like it's fair to cause their neighbors tons of stress over the smallest issues. Then there are cases when an HOA has no real enforcement power and residents figure out they can do whatever the hell they want, even when it threatens the property values of adjacent properties, with no repercussions.

  10. #10
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    Quote Originally Posted by DeacWatcher View Post
    I am President of an HOA in upstate SC that consists of about 48 properties surrounding a 22 acre lake. We have 2 members that have refused to pay dues and assessments for the whole time I have lived here (12 years) and I too am talking thousands. We have tried chasing this money many different times but our HOA has a hole in it that basically leaves us with no iron clad way to get those funds. We have closed off access to these members with signs in front of their lake property and legal letters sent to them restricting access to the lake.

    Unless your HOA says explicitly that liens will be placed on all properties that do not pay dues and that this is recorded down at the court house, you can't get that money.

    I do not think you can put that kind of stipulation into a real estate transaction but I am no lawyer. It would be best to just start from scratch with the new owner. You don't want to create any bad feelings with him as its not his fault
    I'd check with a lawyer regarding what recourse you have with the sale of the property. Even if you can't enforce a lein, the property has outstanding dues and assessments that the seller is aware of (assuming you have receipts of delivery). The buyer shold be informed of those. It might be something as simple as a letter from the HOA attorney to the listing broker that gets the ball rolling. As small as your community is, you might be able to get the buyer to commit to paying future dues for forgiveness of past due payments and and agreement to form an HOA with the ability to place a lien. Of course that assumes the other 7 or 8 property owners are on board with that.

  11. #11
    Quote Originally Posted by DeacOnCapeCod View Post
    I don't believe we have an HOA lawyer.
    I have a copy of the HOA by laws/agreement. I will check to see if there is a stipulation about liens placed on houses for lack of payment.

    Our big issue is that we are needing the road to be repaved and with the fairly steep grade of the road, it is pretty expensive to do.
    We had to have several parts of the lake dredged as we were losing depth so at the annual meeting 5 years ago, we managed to pass an annual assessment to pay the 150K it was going to cost. It extends 7 years into the future (we are in year 4 of it). Everyone but those 2 houses pay it or have paid it to this point and I guess you could say we have been lucky that there haven't been more defections. We have been able to hammer home that this stuff must be done to hold our property value and it has worked.

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