Hoas getting tougher on residents who don't pay fees

In a trend that has grown recently, when homeowners are late paying assessments or fines, their accounts are turned over to law firms. In these cases, legal fees can quickly outpace the size

of the original debt. In the worst cases, homes are lost to foreclosure, sometimes sold at auction for little more than the outstanding debt.  Michael Greenwald, a Boca Raton, Fla.,

attorney, says law firms typically charge HOAs no money, but pass on legal fees to the homeowner. That’s an incentive for the firm to escalate charges. A single missed payment can add up to

thousands of dollars in a few months, Greenwald says. Lawyers are expensive and stakes are high. Many homeowners just pay up, even if they think the charges are unfair, he says. Attorneys

who represent homeowners say in many cases the law firms for community associations are more aggressive than the CAs themselves. In 2014, for example, Kay and John Wynne lost their home in

Lexington, S.C., to foreclosure over a $3,800 homeowners association debt. Brian Boger, an attorney in Columbia, S.C., defended their right to keep their home. The judge vacated the sale.

But Boger says homes are often lost for good. “It’s insanity is what it is,” Boger says.  Dawn Bauman, a senior vice president at the Community Associations Institute, says she thinks this

type of problem is rare. But Bauman says associations have an obligation to collect because assessments fund maintenance and other costs of day-to-day operations. As for turning cases over

to attorneys or collection agencies, “That typically would happen when a resident is just not responding or just will not pay,” Bauman says. Attorneys who represent homeowners disagree. They

say bills are being passed on to law offices more quickly than ever.  In Philadelphia, Jeffrey Greenspan, 64, filed for bankruptcy after running up more than $55,000 in assessments and

legal fees in a battle against his condo association.  In Houston, the foreclosure prevention project at Lone Star Legal Aid has filed lawsuits on behalf of 27 older homeowners who faced

foreclosure from unpaid fees since 2010. In Phoenix, attorney Jonathan Dessaules has seen a sharp rise in foreclosures. Seniors are hit hardest. “Many of them are on a fixed income,”

Dessaules says. “They can’t afford the attorney fees that keep going up and up.”