When a home isn't safe
Published: Saturday, January 22, 2005 at 6:01 a.m.
Last Modified: Friday, January 21, 2005 at 10:59 p.m.
A little-known fact in Florida: Just because a homeowner has homestead exemption, it doesn't prevent a homeowners' association from foreclosing on the home for failure to pay association dues.
"I don't want anyone to go through what we went through," Robert Denson, 42, told The Miami Herald this month. He lost his Boynton Beach home in 2003 when the association foreclosed on a $1,200 debt it was owed.
Denson said he and his wife, Theresa, were behind on their dues when they separated for several months. He told the paper they had used their $18,000 life savings to purchase the home in 2000. Once they were back together, they began paying accumulated bills, starting with the mortgage. "I figured the mortgage was more important," he said.
Homeowners' associations, however, take precedence. The Densons were mailed several past due notices, association attorney Randall Roger told The Herald. A lien was filed. Foreclosure came in the fall of 2003. When no payment was forthcoming, the home was sold.
Such drastic action is not just confined to Florida. In California, a homeowners' association forced foreclosure on a home that owed a $120 debt to the association. The legislature passed a bill preventing such foreclosures for small amounts, but it was vetoed by Gov. Arnold Schwarzenegger.
Schwarzenegger called the legislation "overly broad," and said if homeowners' associations didn't have the power to force payment of dues, those who voluntarily paid them would be paying higher costs. He added that state agencies need to refine the practice so "foreclosure only occurs after every reasonable alternative is exhausted."
Once a homeowners' association takes legal action to collect delinquent dues, legal fees can be added to the homeowner's bill. Jan Bergemann, head of the nonprofit statewide Cyber Citizens for Justice (www.ccfj.net), which tracks association foreclosures, told The Herald that boards can "bring homeowners to their knees because they have unlimited [access to pay] legal fees."
In some cases, he said, legal fees can become six, eight, 10 or more times the size of the bill the association is trying to collect.
But there seems to be agreement in Florida about the power of homeowners' association. While they need to be able to collect money to operate -- and depend of the annual payments -- homeowners also need protection from overzealous associations that charge exorbitant legal fees or bring foreclosure action over a few hundred dollars.
Dan Shapiro, a partner in a California law firm that represents more than 2,000 associations and management companies, told a reporter last year: "At some point, the responsibility has to be on the person who's not paying their assessment. If the law firm or the trustee that is doing the collecting is following the rules and the person is just not doing what they're supposed to be doing -- paying -what alternative is left to the association?"
This session, Florida legislators need to give associations an alternative before the step of foreclosure is taken.
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