CAI attorney advises negotiate payments in HOA short sales

Arizona’s Ekmark & Ekmark (CAI/CCAL member) has joined the blog world.  It’s chosen vehicle is a Bog provider called Posterous, and his blog is simply — easily confused with preposterous. 

 In its blog, advice is given to HOA boards to be realistic and negotiate for partial payments of debts, as any other organization would do when facing financial problems with a small chance of getting any money out of debtors.  In short sales situations, Ekmark informs the HOA that it must act quickly to get at least some money out of a losing situation, even though it is complicated negotiating process.

 I have written repeatedly about the short-sighted, self-defeating, hardnosed position that the HOA does not negotiate and does not give in one inch.  That posture stems from the great fear of a slippery-slope path to a loss in absolute power over homeowners — it would be a seen as a sign of weakness.  How true that is — asking the HOA to face reality rather than to foreclose themselves out of business as the CAI lawyers have been exhorting HOAs to do over the years. 

 And by the way, what about all that abdication to the HOA attorney to run up attorney fees on homeowners facing financial problems, rather than advising the board to sit and negotiate a sensible payment plan?  What advice can be given HOA boards on how to negotiate a plan.  A failure to undertake this effort would raise questions as to the real intent of the above advice on accepting partial payments. A person may get the feeling that it’s just another attempt to keep at least a part of the attorney fees coming in, since these fees are generally the bulk of the money owed by the homeowner.  And they don’t go to help the HOA!  Don’t you think HOA attorneys should cut their fees, and help be a good corporate citizen?

 What do you say CAI attorneys?   What does your corporate conscience have to say?

 NOW that I’ve said the above,  let us not forget that the HOA has no legal standing in the lender/mortgage contract.  There’s really no reason for the lender to give away even more of its money in this short sale transaction.  The homeowner may still be personally obligated to the HOA for its past debts, but that’s no concern of the lender, is it? So why would it even care about the HOA’s attempt to negotiate a piece of the action?   And if the homeowner attempts to bargain for a larger piece of the pie to payoff the HOA, even partially, he risks losing the short sale.

 No, it appears once again that the CAI attorneys are silently ascribing de jure public government attributes as if the HOA assessments were indeed equivalent to taxes.  You know, taxes must be paid!  But, the HOA is not a recognized legal form of civil government.  It cannot claim such attributes; it cannot demand payment of assessments from the short sale.  Especially without even offering to be bound to the 14th Amendment as all public entities are subject. 

 So, I ask, what is the real motivation behind this interference into short sales advice?

Published in: on June 22, 2010 at 9:57 am  Comments (2)  
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2 CommentsLeave a comment

  1. Hi there everyone, it’s my first go to see at this site, and post is really fruitful designed for me, keep up posting these types of articles or reviews.

  2. […] HOAs having the right to foreclose, I wrote in my HOA Constitutional Government commentary, “CAI attorney advises negotiate payments in HOA short sales“,  I have written repeatedly about the short-sighted, self-defeating, hardnosed position […]

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