HOW DO I AVOID PAYING UNREASONABLE HOA FEES?

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HOW DO I AVOID PAYING UNREASONABLE HOA FEES?

Rehaan Khan
Investor · USA · Member since 2019 · 117 posts · 57 votes

I had recently bought an occupied condo in foreclosure auction. The previous owner is still living there. I went through all the legal steps to get possession & recently won a judgement of immediate possession. However, I still have to wait 10 days before the Sheriff will force the previous owner out. My question is regarding the HOA fees, I received in my mail yesterday. $410/month!!!! for all this time that the previous owner was living there. I feel like I shouldn't be paying this because the HOA did not inform me on time otherwise I would've asked them to cut off the utilities. Also, now that I have gotten a judgement of possession, can I cut off the utilities to the unit? & How do I explain to the HOA that I shouldn't be billed for all this time or is there a law/policy I can use against the HOA for not informing me on time or anything that would help me make a case? I really think this is unreasonable & I shouldn't be paying all these bills. Also, I know tenants are protected by law from getting the utilities cut off but in this case, there is no lease or rental agreement. I am the new owner through foreclosure auction, thats all.

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Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
7y

@Rehaan Khan the easiest way to avoid paying HOA fees is to buy properties without HOAs. You'll have success with this method 100 percent of the time

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  • Account Closed
    Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes
    7y
    Originally posted by @Rehaan Khan:

    I had recently bought an occupied condo in foreclosure auction. The previous owner is still living there. I went through all the legal steps to get possession & recently won a judgement of immediate possession. However, I still have to wait 10 days before the Sheriff will force the previous owner out. My question is regarding the HOA fees, I received in my mail yesterday. $410/month!!!! for all this time that the previous owner was living there. I feel like I shouldn't be paying this because the HOA did not inform me on time otherwise I would've asked them to cut off the utilities. Also, now that I have gotten a judgement of possession, can I cut off the utilities to the unit? & How do I explain to the HOA that I shouldn't be billed for all this time or is there a law/policy I can use against the HOA for not informing me on time or anything that would help me make a case? I really think this is unreasonable & I shouldn't be paying all these bills. Also, I know tenants are protected by law from getting the utilities cut off but in this case, there is no lease or rental agreement. I am the new owner through foreclosure auction, thats all.

     It's illegal in most jurisdictions to cut off utilities to force the tenant out. Check with local landlord/tenant laws.

    When you bought the condo you bought the problems. Congratulations.

    It is unlikely you will prevail against the HOA on the fees. Talk to a local attorney but don't expect warm fuzzy feelings.

    7Reply
  • Daniel Kong
    Rental Property Investor · Honolulu, HI · Member since 2018 · 335 posts · 251 votes
    7y

    In this case, it looks like its not the HOA's problem. Somebody owes them money. The only person who you would probably get money out of would be the previous owner. But from what you shared it seems like that is pretty unlikely too. Good luck!!

    1Reply
  • Max T.
    Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
    7y

    pay up

    0Reply
  • Alex S.
    Specialist · Cleveland, OH · Member since 2018 · 270 posts · 187 votes
    7y

    Unfortunately HOA are ruthless and will try to recoup their money from anyone they can. I would seek legal help for this issue.

    0Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    7y

    As you should have known.....in most states the previous hoa debts stay attached to the property and become the responsibility of the new owner.....notice is not required.  As mentioned, it is illegal to cut off utilities to remove a tenant and the hoa wouldn’t have the right or ability to do so anyway.

    You also may have some current or past due property taxes that are now yours, if you didn’t know.

    2Reply
  • Doug Pintarch
    Rental Property Investor · Harrisburg, PA · Member since 2018 · 369 posts · 406 votes
    7y

    These guys above me are correct, at least in the state our condo is in. That was an important part of our research and due diligence that our attorney did pretty much as soon as we started the purchase process on our unit. If it was due, it was our bill.  Everything was current (We did not buy a foreclosure.)   Sorry man.

    1Reply
  • Rehaan Khan
    OP
    Investor · USA · Member since 2019 · 117 posts · 57 votes
    7y

    So if a property is left vacant. Who pays the HOA fees? Or if it is a REO owned by the bank & vacant. Does the bank pay the fee, or they simply ask the HOA to cut everything off to the unit until it is sold?

    0Reply
  • PJ M.
    Philadelphia, PA · Member since 2019 · 174 posts · 124 votes
    7y

    @Rehaan Khan if it is vacant the owner is still responsible for the fees. Banks generally pay the HOA fees monthly. They'll winterize what they can in the unit and follow their normal process for paying required items (taxes, Hoa dues and such).

    Most HOA bylaws have language in them stating generally that you can't use non-use as a reason for non-payment.  HOA dues, where I am, are automatic liens on the property.  Finding about them after the fact is like finding taxes owed and trying to say "nope, go collect from the old owner".  It's not going to happen.  Due diligence falls to the buyer.  It's not the HOA to come tell you what you owe before you buy, it's up to you to find out what is owed before you buy and make sure you pay it after you buy.

    3Reply
  • Tim Herman
    Member since 2018 · 2k+ posts · 1k+ votes
    7y

    @Rehaan Khan the HOA fees stay with the property. Even with the utilities off the fees remain the same. It is similar to a tax lien and does not get removed by the foreclosure. The HOA can foreclose and take over the property they just want to get paid so that would be the last resort. Hopefully the owner was current on his property tax.

    0Reply
  • Jason D.
    Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
    7y

    @Rehaan Khan I guess I don't follow.... are the normal HOA fees $410/mo., and you're upset about that?

    Or are you upset about paying back fees?

    In either case, you'll have to pay the fees. This is part of doing your due diligence, and why condos arent always a great investment

    3Reply
  • Ramon Flores
    Rental Property Investor · Los Angeles, CA · Member since 2016 · 172 posts · 122 votes
    7y

    @Rehaan Khan Sorry to say if you own the property then you must pay the fees. I would also make sure the HOA fees are up to date. If the previous homeowner missed any payments, then it would also be your responsibility to be up to date with the fees.

    1Reply
  • Matt M.
    Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
    7y

    @Rehaan Khan

    For how long will the $400 payments be until it’s caught up?

    How much is owed? Maybe off them a settlement to wipe the debt clean?

    0Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    7y

    why are you buying anything with an HOA ? They are worse than living in a liberal democrat city ! Rules regulations and unending fees That always go up , never down

    4Reply
  • Lynnette E.
    Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
    7y
    Originally posted by @Rehaan Khan:

    So if a property is left vacant. Who pays the HOA fees? Or if it is a REO owned by the bank & vacant. Does the bank pay the fee, or they simply ask the HOA to cut everything off to the unit until it is sold?

    Although the HOA fees my cover some utilities, that I generally not the main use of the fees. The fees generally pay for the outside maintenance such as paint and roofs, carports, decks. They also generally pay for common areas, landscaping, lawn cutting, pools and spas, fitness centers, play grounds. An office is generally funded, maintenance people, attorneys, etc. All sort of things that cost money whether the unit is used or not.

    One is expected to pay these fees when the property is transferred, and if they are not paid at that time, then the new owner gets to pay them.

    Your only hope of not paying all the back fees is to see if the HOA gives a discount to you if you pay all the back fees immediately. Sometimes they but not often.

    Although you can not legally cut off utility services, you do NOT have to set them up in your name when the property transfers. IF all the utilities are truly paid by the HOA, nothing you can do. However, likely the utilities are in the past owner's name and you will, depending on the area, eventually get gifted with the water, sewer and trash bills as they generally do transfer with the property.

    3Reply
  • Timothy Lewman
    Flipper/Rehabber · Worcester, MA · Member since 2016 · 179 posts · 113 votes
    7y

    @Rehaan Khan yeah you have to pay. Sorry, at least it's a tax deduction. 😁. However you could try to recoup your losses in small claims court. Don't hire a lawyer, too expensive. Sue the previous owner for the back HOA dues. You have your closing document and your HOA bill with the billing period. So you should be able to show that your not responsible for anything prior to the possession date. I'm no legal expert but that seems like a slam dunk to me; it's worth a shot!

    1Reply
  • Timothy Lewman
    Flipper/Rehabber · Worcester, MA · Member since 2016 · 179 posts · 113 votes
    7y

    @Timothy Lewman oh and you need to bring the receipt showing that you paid the bill, showing you suffered a loss.

    1Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    7y

    @Rehaan Khan the easiest way to avoid paying HOA fees is to buy properties without HOAs. You'll have success with this method 100 percent of the time

    7Reply
  • Connie Chan
    Investor · Member since 2017 · 239 posts · 149 votes
    7y
    @Rehaan Khan hi, sorry to hear about your situation. But unfortunately the others on this thread are correct, you can’t legally get out of those HOA fees. They may seem high to you but hopefully you got a “deal” in the foreclosure auction such that your investment will still pay off.
    0Reply
  • Lee Bell
    Real Estate Appraiser · Isabella lake, CA · Member since 2018 · 628 posts · 491 votes
    7y

    Sue the prior owner that lost it to foreclosure?

    Good luck getting blood from a stone.

    You should have done due diligence, not doo doo diligence.

    Doh. Pay the man, Homer.

    1Reply
  • Greg M.
    Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
    7y

    Your liability for dues incurred by the prior owner varies from state to state. Some states allow the wiping out of prior owed dues with a foreclosure. Others allow the carry-forward of owed dues to the next owner. Others allow partial carryover, say 6 months, of owed dues to the next owner. And some HOAs have clauses in their CCRs that state owed HOA dues become a superior lien and therefore do not get wiped out by a bank foreclosure. Read your CCRs and your local laws to determine if you owe for past dues. The HOA is happy to send you the entire bill and see if you will pay it.

    As a HOA Board member I can say that you probably had some leverage before your purchased the unit in order to get the balance reduced. The HOA just wants the dues to be paid and this headache gone from their lives and they won't get that until there is a new owner. They likely will instantly remove things like late fees and fines from the account and possible write off some months of dues depending on how long the account has been delinquent and how soon the new owner will bring the account current.

    2Reply
  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    7y

    @Rehaan Khan

    HOA lien priority is not universal. The first thing to do is learn local law on this. If the subject property is in Virginia where you are, here is where to start:

    https://law.lis.virginia.gov/vacode/title55/chapte...

    Figure out what you owe — on perfected liens only — and pay before expenses and fees increase. But don't just blindly pay everything the HOA is demanding. There are limits despite what you see posted here.

    Gimer Law516 Reviews
    WebsiteView Page
    3Reply
  • Chris C.
    Raleigh, NC · Member since 2017 · 347 posts · 94 votes
    7y

    gotta pay. usually HOA's arn't utilties, and cant tell if you ment hoa dues are 410 normally or if thats how much they owe in back HOA fees

    0Reply
  • David Santana
    Member since 2019 · 24 posts · 8 votes
    7y

    @Rehaan Khan

    My lawyer advised on HOA issues, you should have received a disclosure document that you should have received "Frequently Asked Questions" it acknowledges the receipt of the association documents, financial information, and frequently asked questions more than 3 working days prior or before the closing date with the option to void the contract if you don't agree with the document (Chapter 720.401 Florida Statutes) Hope I explained well, if not please correct or look the Statute...

    If you still have any questions please consult your lawyer or I can recommend mine. Have a great night.

    David Santana

    0Reply
  • Rehaan Khan
    OP
    Investor · USA · Member since 2019 · 117 posts · 57 votes
    7y
    Thank you David, that's a good point to keep in mind but I don't believe the 3 day disclosure form applies to foreclosure sales.

    Originally posted by @David Santana:

    @Rehaan Khan

    My lawyer advised on HOA issues, you should have received a disclosure document that you should have received "Frequently Asked Questions" it acknowledges the receipt of the association documents, financial information, and frequently asked questions more than 3 working days prior or before the closing date with the option to void the contract if you don't agree with the document (Chapter 720.401 Florida Statutes) Hope I explained well, if not please correct or look the Statute...

    If you still have any questions please consult your lawyer or I can recommend mine. Have a great night.

    David Santana

    0Reply
  • Patti RobertsonBusiness Member
    Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
    7y

    Banks have no responsibility to disclose that it is even in a condo community. You need to pay upmor you will end up with a judgment and lien against your property. And you will pay their expensive legal bill on top of what you owe. 

    757-472-2547
    0Reply
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