A Homeowners Association must be a familiar term if you live in a condo.
Within that, HOA fees are the expenses you pay to maintain the property you live on, along with other residents of the condo community.
Once you purchase a property governed by these rules, it constitutes acceptance, meaning you are officially considered an HOA due-paying member.
Now, HOA fees can get pretty high – and your budget might not be able to handle it. At the same time, not paying HOA fees could get you in trouble – and can even lead to HOA foreclosure proceedings.
There’s a mitigating circumstance to this – you can learn how to get out of paying HOA dues.
Don’t go anywhere!
We’ll be dealing with the issue of HOA liens, what happens when a homeowner fails to pay dues – and even how to find foreclosure lawyers.
How To Avoid Paying For HOA Fees – Your Options
Paying HOA fees can get extremely high – so much so that you’re not able to keep up with the ongoing expenses.
Luckily, you have a few options.
Filling Bankruptcy – Chapter 7
Chapter 7 bankruptcy is your light at the end of the tunnel.
If you refer to this chapter, there is a possibility to discharge past dues. That is if you want to hold on to your property and save it from a judicial foreclosure.
A chapter 7 discharge releases the debtor from liability for most debts and prevents the creditors from collecting any actions and imposing a mortgage foreclosure.
Here’s the deal:
Dues that have accumulated before the filing date will be discharged, while the remaining dues that have been incurred after the filing will still have to be paid and considered a debt.
Under certain conditions, you’ll have the right to discharge any outstanding dues and hold on to your property. However, this will only be possible if no lien has been placed on your home.
Who is eligible?
It’s important to note that you can’t rely on chapter 7 relief without any prior knowledge. You have to qualify for it.
How Does It Work?
The debtor must first fill out the petition with the details of the place of residence. Furthermore, they must also file with the court.
If the debtor’s incomes are lower than the poverty level – as pointed out in the Bankruptcy Code – and the debtor is unable to pay the fees (even in installments), the court may pass the decision that the fees be paid.
Filling Bankruptcy – Chapter 13
Unlike the previous chapter, Chapter 13 bankruptcy deals with secured debts from a 3-5 year plan. This option’s suitable for someone who wants to stay at the collateral property, including your home and vehicle.
Unlike the previous chapter, in case the HOA puts a lien on your property for unpaid dues or special assessments, you may be able to strip the lien if the outstanding balances of mortgages are higher than property values.
The so-called lien stripping implies removing junior liens.
If you decide to give up the property fully in Chapter 13, you’ll no longer be liable for post-petition HOA fees that have been incurred before the transfer has been made.
Lowering HOA Fees
A financial crisis is nothing new. Moreover, life’s unpredictable circumstances sometimes put us in a situation where we cannot pay our fees due to unexpected expenses.
In this specific case, we’re referring to the HOA dues.
There are ways to reduce HOA fees; we’ll outline a couple of solutions below:
- Analyze the budget for areas that seem to cost too much
- Review your current and future contracts with vendors (landscaping costs, professional management)
- Request quotes from insurance companies and prepare to negotiate
- Consider deferring nonessential repairs and projects to your community
- Suggest using the reserve fund to cover essential projects, if there’s a sufficient amount of cash
What If You Don’t Pay HOA Fees?
If you miss a payment, your HOA will notify you of your due and outline the possible consequences if you don’t pay the amount you owe.
If you’re warned more than once, and those preliminary actions prove unsuccessful, the HOA can take advantage of the opportunity and take legal action against delinquent members.
Below are the possible outcomes if you decide to ignore your obligation to pay HOA fees regularly.
Privileges Can Be Taken Away
This one’s perhaps the lightest consequence that can happen to you. In essence, you might be denied access to shared areas of your community – such as the gym, pools, tennis courts, etc.
A Lawsuit Can Be Filed
If homeowners association dues accumulate and multiple fines have already been imposed on you, the next step could involve a lawsuit. In such cases, the HOA has the right to deduct a certain percentage from your salary until the owed amount’s paid in full.
You Risk HOA Foreclosures
You’re probably familiar with mortgage lenders and mortgage foreclosure – but what does an HOA foreclosure mean?
If you fail to settle the agreed amount, and it has already accumulated to a certain extent, the HOA forecloses on your home – as in, takes possession of the property and/or sells it.
Before they initiate foreclosure proceedings, they must give you a 30-day notice. That would be the best time to look for foreclosure lawyers in your area. Facing foreclosure and completing the entire process can take anywhere from six months to a full year.
Foreclosure Attorneys – Why Do You Need Them?
If you’re facing foreclosure – be it judicial or nonjudicial foreclosure – you should not only inquire about hiring a foreclosure attorney but also whether it will be worth it to pay one.
You can use a lawyer referral service – a network that connects people who need legal advice.
Be sure to find a lawyer that has experience dealing with HOA foreclosures and puts effort into building a trustworthy attorney-client relationship. In this confidential relationship, you don’t have to worry about your sensitive or confidential information being compromised.
Bills Can Go To A Collection Agency
Also, if you fail to pay your bills, your HOA could hire an agency to collect your unpaid bills – which is generally realized through constant calls and letters.
The Responsibilities Of HOA
Homeowners don’t just collect dues; they have responsibilities, as well.
Here are the most notable responsibilities of HOA members.
Managing Finances
The treasurer is the person who is officially in charge of managing the finances of the HOA. They’re responsible for going over the payment records and paying the repairmen – and have to collect dues from community members.
Besides paying, they should create a budget to pay bills, buy insurance premiums, and taxes for community areas.
Meetings, Documentation, Records
The HOA board members are responsible for attending meetings, recording communication, and holding records of important events.
The board president is the one who schedules the meeting and determines the agenda for future actions. They must be thoroughly acquainted with all CC&Rs.
Also, they have the right to call on votes and announce results.
Besides the president, you have the vice president, the board vice president, and the board secretary.
Investigating Complaints
A mandatory HOA task involves regularly investigating complaints. Whatever the HOA community, conflicts are inevitable.
HOA members are tasked with discovering the source of the conflict and finding a way to rectify the situation. In the event that you are someone who does not comply with complaints made against you, the so-called “prosecutor” has the right to invoke a warning or fine for violating the rule.
Can You Hold The HOA Accountable?
Yes.
Don’t be afraid to stand by your claims if the HOA member isn’t fulfilling some of the responsibilities we’ve mentioned above.
Just as you are obliged to pay the dues and abide by the rules of your community, the HOA is obliged to respect and fulfill their side of the “agreement.”
You might not be able to impose fines and warnings on your HOA members as you might like – but you can follow certain procedures that will instigate a change in your community.
However, working alone will not create the desired effect. You should get together with your neighbors who feel the same way.
Writing a petition would be the first step. Similarly, you can vote for another HOA president at the next meeting. Or, you can check attorney listings on a lawyer referral service – and file a lawsuit against the HOA for failing to perform the obligations outlined in the governing documents.
The steps you are allowed to take – without creating the opposite effect – should, as a rule, be laid out in your HOA documents. So, take a good look and study your options before you decide what to do next.
It would be best to look into the governing documents of your HOA, for they contain the HOA budget, rules, CC&Rs, how the HOA is run, and the like.
What’s The Purpose Of The Homeowners Association?
The purpose behind a standard Homeowners Association is to set forward rules and regulations that apply to your current living situation – and which all your fellow residents must obey.
And just to keep it clear, HOA rules CANNOT override the state law.
HOAs are typical of new developments, condo complexes, townhouse communities, as well as newly established neighborhoods with single-family homes.
If you talk to your real estate agent, you’ll know that the scope of HOA fees differs according to several factors.
Rules & Regulations
HOA’s rules and regulations generally imply the following:
- Any major changes made to your home/condo
- Restrictions regarding the lawn and/or holiday decorations
- Requirements for home maintenance
- Policies regarding noise complaints
- The number of residents allowed in one unit
- Parking rules for residents
- Rules regarding pets and whether they are allowed
- Rules regarding taking out the trash and recycling
- Whether you can rent your condo for a short time (Airbnb agreement)
What To Expect From HOA Fees?
HOA fees are your monthly dues collected by homeowners. What we’re interested in here is how much you can expect from these fees.
Without sugarcoating, the fees can vary according to the demand for real estate in that area, the resale value of your condo, and so on.
So, the fees you pay within your condo community can vary drastically. They can start at a modest $100 and go up to an incredible $1,000 for newer and more expensive neighborhoods.
However, the average range varies between $200 and $400.
Essentially, the more amenities provided, the higher fee you’ll pay.
What Do HOA Fees Cover?
The cost of the fees is no secret – but let us remind you what you’re saving those few hundred dollars for here.
Repair & Maintenance
- Trash removal
- Electric system and lightning
- Heating system
- Sanitation system
- Pest control
- Elevator system
- Roof repairs
- Hallway paint, carpeting
- Pipe replacement
- Gym equipment, swimming pool
- Internet and cable systems
- Special assessments
Reserve Fund
This fund includes the amount of money allocated for emergency repairs and maintenance of common areas in your complex.
If you’re moving to a condo where you have not paid HOA fees so far and you are not familiar with the HOA board – be sure to check the condition of their reserve funds. If the current status of the reserves is solid, that could reduce HOA fees for a time.
Insurance
The insurance premiums for property owners cover the usual wear and tear and/or unforeseen damage caused to the building. That’s different from a reserve fund because it can help reduce costs when it comes to a natural disaster, for example.
Staff
This bit applies to janitorial staff who are under full-time employment and are in charge of maintenance of the building’s common areas. A part of the HOA fees you pay goes toward the paychecks of the personnel.
Property Management
HOA is technically in charge of enforcing the rules outlined in the CC&Rs, but it could also hire a third-party property management company to handle this on its behalf. If you’re looking to reduce HOA fees, it might be a good idea to talk to the board and see if they can discuss this with the company.
Utility Payments
HOA fees cover utility payments such as heating, water, air conditioning, and electricity for common areas of the complex.
It depends on how your community is set up, though. Sometimes, the utility fees cover expenses for individual units, too.
Is There A Voluntary HOA?
Yes, and this association can enforce community rules much like “regular” HOA – but they’re not mandatory unless members have signed contracts.
So, if you don’t sign it, they can’t fine you for violating the CC&Rs.
Final Thoughts
If you’re looking to avoid paying HOA fees, and you already have several delinquent assessments, there might be a way for you to avoid legal actions and stop paying the dues permanently.
Your two options would be filing bankruptcy for Chapter 7 and Chapter 13, and in order to do that, you must be eligible, meaning the court will evaluate your case details.
Furthermore, if the HOA failed to fulfill its obligation, you can get together with your neighbors and put together a petition.
One last thing:
You can always move elsewhere. If you’re considering this, we’re here to help you navigate the housing market. Make sure to sign up for our Mashvisor free trial now!