Many HOA’s are well run. Their residents are fortunate. We often meet with the residents of HOA’s that are poorly run and are unresponsive to homeowner concerns. There is nothing more frustrating than attempting to work with an HOA Board or Management Company that will not listen, does not care or is openly antagonistic.
We have met with many homeowners who feel that they are being bullied. A natural inclination is to fight back by withholding payment of HOA dues. After all, if they are not getting the services they pay for, why should they continue to pay? Right?
Wrong! Regardless of the circumstances, failure to pay HOA dues is almost always a mistake and will usually end poorly. At best, a homeowner will need to pay more than they would otherwise pay with late charges and, sometimes, attorney fees added. At worst, a lawsuit will be filed to foreclose the HOA’s lien for delinquent dues. ARS 33-1807 (A) provides, in part, that:
“A. The association has a lien on a unit for any assessment levied against that unit from the time the assessment becomes due. The association’s lien for assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments may be foreclosed in the same manner as a mortgage on real estate but may be foreclosed only if the owner has been delinquent in the payment of monies secured by the lien, excluding reasonable collection fees, reasonable attorney fees and charges for late payment of and costs incurred with respect to those assessments, for a period of one year or in the amount of $1,200 or more, whichever occurs first, as determined on the date the action is filed….”
When a lawsuit is filed, costs increase rapidly. A homeowner is in risk of losing their home and will need to hire counsel to defend. A recent Arizona case demonstrates how matters can easily go very wrong.
In Laveen Meadows Homeowner’s Association v. Mejia, 1CA-CV 18-0276, 5/5/20, the homeowner did not timely respond to the HOA’s foreclosure lawsuit and a default was entered. However, the homeowner did promptly file a motion for relief from the default and paid all the past due HOA dues in full, but did not pay interest, costs and legal fees.
The Court found, after a hearing, that the homeowner had, indeed, paid all delinquent HOA dues but allowed the foreclosure to proceed anyway and a default judgment was entered. The Court ruled that, since the HOA had the right to foreclose at the time its complaint was filed, it was allowed to proceed with its foreclosure action for the remaining unpaid fees and costs. The Court also allowed the HOA an award of additional fees and costs.
The take-away from the Laveen Meadow case is that:
- Don’t allow your HOA dues to become delinquent;
- If a delinquency occurs, pay whatever amount the HOA is demanding as soon as possible—even if the amount demanded is too much. If you overpay, you can file a civil action in court to seek a refund. But, in the meantime, you will be protected from additional late fees, attorney fees and the possibility of a foreclosure lawsuit.
- Do not allow a matter to proceed to a lawsuit. If a lawsuit is filed; hire an attorney to protect your home.
Platt and Westby, P.C. has offices in Phoenix and Gilbert, Arizona.