HOA socialism: all members pay for a member’s shortfall

A recent article by KHON2 news reported a controversial aspect of HOA life that homeowners were never told or explained when they bought their HOA controlled home.

“Residents upset over extra homeowners fee to cover hundreds who defaulted on dues.   So how is this allowed to happen and is it legal to make the others pay?”

Those members who have paid their assessments are outraged and argue that it ain’t fair.  It’s not a question of fairness, but of the adhesion CC&Rs contract and legal structure of their HOA corporation.  In short, the HOA is like a small, private business whose income comes from its mandatory members, and when assessments fall short it has the right, under contract, to assess the shortfall to make up the difference.  All buried within the governing documents, but never explained to the membership.

And the  members are all deemed to have given their agreement to the CC&Rs with full knowledge and nothing kept  from them.  “Say it  ain’t so, Joe.”

YES, it’s called joint and severable liability where each member is responsible for other member shortfalls.  But, CAI, that alleged national educational expert organization, does not tell the world that this is the legal structure of an HOA.  Shame on them!

And the other lunacy argued by CAI: foreclose on them. That’s like getting blood from a turnip.  Ludicrous!

Published in: on October 15, 2016 at 3:24 pm  Comments (4)  

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4 CommentsLeave a comment

  1. I find this to be the worst argument for assessing members more. I was on my board too and learned something important–some members don’t pay on time, but eventually they have to pay. As long as the board follows the law, and places a legal lien on the behind property–once it sells, the association gets their money with interest.We were always about $100,000 behind. We’d send out letters that a lien was going to go on their property and we’d bet about $30,000 right a way and work out payment plans with the others. then others would get behind and again we’d have $100,000 behind.

    We always got interest too, so we actually make money on the behinders. Then there are always those who will default no matter what and you have to budget for that–the foreclosures and such–but the banks are pretty good now about paying the dues of the property in default. So when the collection agency said they can collect from the “dirty rotten guys” who fell behind–they really can’t do much except charge the members a lot of money to pay them to do the same thing the lien does. And if they don’t collect, they charge the association the money–so getting a collection agency always cost the association and always cost the members and they NEVER have collected a dime more than we did with plain ole liens–in fact, once they were done we had $144,000 in back dues!!! and many members enriched them. I hate the lawyers who do this to associations and their members.

  2. Socialism, is a “political” term applied to an economic system in which property, albeit not all property (single family residences in PUDs), is held in common and “governed” by the state, a political hierarchy (board of directors aided and abetted by fee-paid “professional” management companies and law firms) and its all too often all-important individual (the autocratic board president).

    Common ownership does not mean decisions are made collectively, instead individuals in positions of authority (5, 7, 9 or other members of the board of directors) make decisions in the name of the collective group.

    “Say it ain’t so Joe.” The righteous outrage of those dues paying members assessed by the state to make up for the +/- 100 non-paying members is exacerbated by the “wisdom” of those financially self-interested non-stakeholders who “earn” fees by spending more of the collective’s monies (OPM) foreclosing on those members not contributing to the community collectively while benefitting from the dues paying members.

    If it ain’t fair Joe, perhaps the dues paying members, burdened by the collective’s joint and severable liability, should simply stop paying their dues then every member will be responsible for every other member’s shortfall.

    In addition to imploding the collective, the “association bar” will likely not foreclose on all the community’s members for love and affection (the members’ ATM [OPM] will give notice to those prosecuting any foreclosures, the “amount requested is unavailable at this time, would you like to request a different amount,” say $0.00?

    Foreclosure, “The difference between genius and stupidity is that genius has its limits.” Albert Einstein

  3. Ok, so it is bad that some members do not pay their fair share. But it is also bad that the HOA pursues the debt? What do you suggest?

  4. The answer is in the old mantra, “you signed the contract”!!

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