HOA Dues Late, foreclosure notification

13 Replies

Good morning!

I've recently had an issue with my HOA for one of my properties. I thought the HOA was being handled by the management company, but it is not. As a result my HOA fees have not been paid for 2017 or 2018. The association delivered certified mail to my tenant who was delinquent and ultimately evicted last week, meaning I never received any of the notices.

Last week I was served papers and contacted by the attorney regarding the payments, which was my first contact. At this point they're asking for $3,073.88 for $820 in assessments plus fees, including $1931.14 in legal. I'm frustrated because I do have an email address on file with the association, but they chose to enter into foreclosure before even sending an email. I also put the property into professional management in March 2017 and they notified the association to send correspondence to them.

I know I owe the payments for the assessment and at fault for the lateness of the penalties. My question is does the association legally share any fault? Do I have any grounds to negotiate a settlement?

1. Grounds to settle - maybe. Try it, the Association has a voting body. Chances are they might waive penalties but not what is owed. 

2. No, the Association has no legal liability as far as I can see. Not receiving your bills does not absolve you of responsibility for knowing they need to be paid. This is a long-standing legal principle. The alternative would result in all kinds of mayhem for everyone. 

3. The management company should be responsible for the late/legal fees, if they are taking responsibility for all facets of management (taxes, association fees, utilities, etc). I would probably sue them to recover those fees in small claims court if they don't pay them voluntarily. 

@Matt Copeland You can always negotiate, but it may not work. 

Seems like this is 80/20 your fault to theirs. 

Do you have proof your management contacted the HOA? Did they tell the right person?

If that's the case you could send that info to the HOA with a suggestion of back fees and legal fees. See where that gets you.

It does seem odd they would evict your tenant before contacting you... Do you k now if the HOA is handling the issue or an Association management Company?

Does your contract with the management company say they are responsible for paying the HOA fees? If so, I'd be on their case about why this fell though the cracks and for them to cover any penalties. If it was a misunderstanding on your part, then I think the management company is off the hook.

As the owner it would be your responsibility to be sure the HOA has your mailing address, not just an e-mail address.

At this point you might be able to negotiation on any penalties from the HOA, but the legal costs are probably real.

1. No, the contract says I'm responsible for paying all fees, but that they HOA should notify the management company for all notifications. It was simply my mistake. It seems to me to be incompetent to go through so much trouble causing me fees but not to go through the trouble of emailing me. Ignorance, though, isn't liable and I recognize that. I wasn't sure if there was any grounds that they are obligated to try to make contact through any other contact info that I've given them.

2. I evicted the tenant, not the association. The reason why I mention the evicted tenant is that's the reason why I never received any of these notifications.

Wow this is a painful mistake. But thank you for sharing it and being honest about it on the forums so others can learn from it. This only further enforces my disdain for HOAs and bolsters my caution in buying property controlled by one. I understand the PROS and CONS of HOAs but when I read stories like this is tips the balance more to the CON side. Maybe you can appeal to the other owners at a meeting and get the fees removed? Good luck


Your Association will only change mailing addresses or contact information directly from you, the owner. Your management company can pay them on your behalf out of the rental proceeds, but is ultimately your responsibility for payment.
If you do not pay these dues, they Assocation can foreclose and collect rent on your behalf up until they are paid back your past dues monies plus legal fees. If you want the JR to your property, I would contact the attorney for the HOA and work out a payment plan or negotiate a payment in full. At this point, you can not, nor should you re-rent your property until this has been resolved

Originally posted by @Matt Copeland :

It seems to me to be incompetent to go through so much trouble causing me fees but not to go through the trouble of emailing me. Ignorance, though, isn't liable and I recognize that. I wasn't sure if there was any grounds that they are obligated to try to make contact through any other contact info that I've given them.

When you have late fee notices and the assocaition is considering foreclosure, they will contact you by crertified mail.  They will want to be able to prove that the notices were mailed and signed for.  Can't do certified e-mail.  

If you never provided the association your physical mailing address, then you have only your self to blame.

I sit on the boards of 2 HOAs.  Your exact scenario is a huge source of frustration for boards of directors.

At one HOA, we have publicized (and re-publicized and over publicized) that the dues will be increasing every year for the next 5 years. We are currently in year 3 of this plan. Dues go up every June. We are doing this in lieu of having to do Special Assessments.

Every June, we have a ton of people that send in the same amount as May.  I direct our manager to send a courtesy email letting them know they paid the wrong amount.  Attached to that email is a statement.  No late fees are assessed.

The same thing happens in July.  I direct our manager to send a courtesy email AND snail mail.  No late fees are assessed.

The same thing happens in August.  I direct our manager to send a courtesy email AND snail mail.  No late fees are assessed.

Starting in September, late fees are assessed.  You wouldn't believe how that gets people crawling out of the woodwork, swearing they had no idea dues were increasing.  (Yes, they've been owners for several years)

Note that we are not required to do ANY of this.  We do it to help the homeowners.  Our covenants allow for late charges and interest as soon as one penny is 5 days late.

That works for 95% of people and they get caught up, however, there is always the 5% that are just like you.  Months and years go by and they send in the original amount from years ago, every month like clockwork.  At some point, the past due balance accumulates to the point where we send a certified letter to notify them they are going to the attorney.  Nothing.  

So off it goes to the attorney and BAM!  Some absentee landlord that has their property on auto pilot is suddenly P***** OFF and wants to negotiate.   In the meantime, I and all of your neighbors have paid the property manager to try to contact you, we've wasted money on envelopes and postage and have paid the attorney a fee to start your case (gets added to your bill, but still.)  (Note - these are the same auto pilot people who don't attend meetings and won't send in a proxy, but then complain about the decisions the board makes)

The answer - 100% of the time in these cases is No - No Negotiation. (This is where you, the homeowner, will start calling the HOA Board all kinds of foul names like Power Trip, Nazi, etc).

Here's how our hands are tied:

1 - in Colorado, the HOA's Management Company cannot act as a collection agency. They can send out statements and emails, but they cannot reach out by telephone (that's only for collection agencies or attorneys). So even though they may have your phone number on file, they are limited in notifying you of your balance due. Other states have similar collection laws.

2 - Even if you call in for a repair or maintenance, the management company can't "just happen to mention" your past due balance.  

3 - Even if you thought your property mgmt company was going to handle this for you, the HOAs management company cannot and will not discuss your past due balance with anybody except you, unless they have a specific Power of Attorney on file.  

So can you negotiate? Maybe, if your board has more patience than my board does. Here's what you'll have to pay at a minimum: 100% of Dues. 100% of Attorney Fees, 100% of any other fees that the HOA had to pay out of pocket. Late fees and interest might be the only part that's negotiable.

I follow all the above, and I also acknowledge that my stupidity got me in this mess. My first property didn't have an HOA, so for my second it wasn't actively on my mind. I just wish I could have heard about all this before this point. Your goal is to get the funds you're due, so you did what was logical and reached out, both by mail and by the email that they have on record. I wish that would have happened for me.

Last question:

@Dave Toelkes ... That makes sense. So if it is the mail is certified and must be signed for by me, and I never received and never signed, isn't that an issue? I haven’t signed anything, so either it was t delivered or it was forged. 

@Matt Copeland offer to pay assessments and any true out of pocket expenses for the HOA. Most of the time that is all they really want. You can request the fines be waived. You should read the HOA docs - they should outline how delinquencies are handled - and giving bills to tenants is probably NOT on the list. When I managed an HOA all communication of that sort was between me and the property owner. So, open your checkbook and throw yourself at their mercy. Politely ask to review their collection policies. If they don't have one - or if it involves dealing with tenants - politely suggest that they change the policy.

They were only required to send certified mail to address provided by You. They don’t have to search for you if your address is no gods, for you.