If we didn’t have homeowner associations, Stephen King would have made them up by now.
The potential for abject horror is just too great.
Ask Devery and Tina Hale of Irmo. Three months after falling behind on their HOA dues, the Winrose Homeowners’ Association put a lien on their property. Then the group foreclosed — and, with no legal requirement to notify the Hales, sold their house out from under them.
All for $250 in unpaid dues.
Which, by the way, they had actually paid before the auction. But that didn’t stop the madness.
The HOA also tacked on more than $300 in service and filing fees, and more than $2,000 in legal fees before selling the house for ... $3,000. They did leave the Hales the outstanding mortgage to pay. Classy.
The couple only got their home back, as Jessica Holdman reports, when a rightfully disgusted state Supreme Court stepped in.
“The Hales were minimally in arrears on their HOA dues, yet the HOA foreclosed on a $128,000 home in its eagerness to collect the outstanding $250 — an overdue amount less than 0.2% of the fair market value of the home,” Justice John Kittredge wrote last month.
The real crime here is that it took four years, and the Supremes, to stop this farce.
These days it’s not easy to avoid an HOA in South Carolina. About 40 percent of residences here fall under the governing control of one of these groups — and the horror stories roll in faster than King publishes novels.
All that would be simply annoying if HOAs were still just groups of busybodies telling their neighbors to mow their lawns or haul in their trash cans. But now these groups often hire outside management agencies ... and there goes the neighborhood association.
Some of these businesses will exploit any legal loophole for profit. An out-of-state company swooped in, bought the Hales’ house with flimsy excuses for not assuming the mortgage, then turned around and offered to sell it back to them. For $35,000.
All of which is legally suspect.
But, as Kittredge wrote in his order undoing this mess, the company “would not have had an opportunity to engage in its questionable business practices had the HOA and its attorney not chosen to pursue foreclosure in the first place.”
This is lunacy, it's far too common, and it needs to stop.
Two years ago, the Legislature passed a law requiring HOAs to make their rules and covenants public record and ordered the Department of Consumer Affairs to record complaints about the groups. Now, House Minority Leader Todd Rutherford wants to bar HOAs from foreclosing on owner-occupied homes.
That’s a good first step. But, ultimately, selling a house to settle a debt of a few hundred bucks should be outright illegal.
Of course, the industry — and, make no mistake, this is an industry — says liens are the only recourse they have to collect dues.
Right. All those lawyers on retainer and they expect us to believe they’ve never heard of small claims court? Which is where the Winrose Homeowners’ Association should have been forced to plead their case.
The HOA would’ve won; the case was solid, and a late fee was even appropriate. There was no reason to go nuclear.
HOAs serve a purpose, and they can safeguard property values. But, like everyone else these days, neighbors sometimes quarrel. So is it really a good idea to give some of them the power to take a person's most expensive possession because they failed to get it pressure-washed one spring?
North Charleston state Rep. Marvin Pendarvis, an advocate for tenants’ rights and an attorney who has fought HOAs, says the Legislature has tried to remedy this several times, but he’s willing to take another look. There has to be, he says, a balance between a neighborhood’s and an individual’s rights.
“You shouldn’t be putting liens on property for minuscule things,” Pendarvis says.
Like a $250 bill for neighborhood dues. That is downright terrifying, even by Stephen King standards.
Editor's note: This column has been amended to note that Justice John W. Kittredge wrote the Supreme Court order in the Hale's case.