Courts finally realizing the gross injustice of HOA foreclosures

The gross injustice of HOA foreclosures is slowly being realized by the courts. In Brooks, the Tennessee appellate court heard an appeal on a non-judicial foreclosure whereby the HOA sold, and bought, a “free and clear” home valued in excess of $321,740 for just $12,828, of which about half, $6,734, were attorney fees.

That’s more than 25 times the “damages” to the HOA, and more than the 10 times limit set by the US Supreme Court for punitive damages. See State Farm v. Campbell, 538 U.S. 408 (2003). And, the Rivertown HOA failed to acknowledge that the homeowner had paid part of this amount before the foreclosure.

The court held, emphasis added,

In addition to finding that the foreclosure sale price shocked the conscience of the court, the trial court determined that various irregularities in Rivertown’s bookkeeping justified setting aside the sale. In its January 27 order, the trial court found that it was “unclear as to what amount would have brought Plaintiff to a zero balance on assessments[.]”

Brooks v. Rivertown on Island, No. W2011-003260COA-R3-CV (Tenn. App., Dec. 6, 2011).

Published in: on December 8, 2011 at 7:34 am  Comments (2)  
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  1. […] [i] Cited in Courts finally realizing the gross injustice of HOA foreclosures. […]

  2. As in FL, better rewrite the statute and quick! No HOA Board of amateurs should have EVER been given the right to take an owner’s home in the community. And in a non-judicial proceeding! Not so fast, Jack. Have you ever heard of property rights? And to top it all off, flawed bookkeeping to get the whole thing thrown out! Unpaid taxes, default on mortgages and unpaid mechanics’ liens are the ONLY instances where a foreclosure proceeding should be allowed by state law!

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