Weeds in the front yard, grass that grew over 4 inches, a shed painted the wrong color. If you think not paying your mortgage is the only offense that gets your home foreclosed on, think again.
James McAdoo, a homeowner in South Fulton County, GA, told a local TV station that he had to file for bankruptcy to keep his homeowners association from garnishing his wages over weeds in his lawn. He still owes $36,000.
Meanwhile, Karyn Gibbons paid her Gwinnett County condo’s HOA fees regularly and on time but says the checks were often cashed late or not at all. Then out of the blue, the Georgia resident received a foreclosure notice. She was told she owed $30,000 for late and attorneys fees.
(Courtesy of wsbtv.com)
(Courtesy of wsbtv.com)
Jewel Inostroza, of Newnan, GA, told CNBC that she was shocked to discover the fines and late fees that the previous owners had accrued came with her new house. Even after going to court and paying off everything she thought the former owners owed, the fees kept ballooning, totaling tens of thousands of dollars.
And when Tricia Quigley, who owned a home in Cherokee County, GA, for 18 years, didn’t pay $800 in HOA fees out of frustration with the billing process, she found that amount soon climbed to over $10,000 with late and attorneys fees—and she couldn’t keep up.
Her house was sold on the courthouse steps for $3.24.
(Courtesy of wsbtv.com)
Changing the laws
These Georgia homeowners are far from alone in their HOA horror stories. And now Georgia lawmakers want to do something about it.
State Sen. Donzella James, a Democrat who represents South Fulton County, introduced multiple bills trying to reign in aggressive homeowners associations.
These groups oversee the care and maintenance of a neighborhood. Homeowners pay monthly or annually into a pool of money that goes toward the upkeep of the common areas. The HOA may, for instance, remove a felled tree, keep a community pool clean, or make certain that homeowners keep their yards in order.
But many homeowners insist HOAs have gone power mad.
James says the associations use “predatory” tactics to jack up penalties that homeowners can’t keep up with—and that eventually force them from their homes, even though they may be up to date on mortgage payments. HOAs are legally allowed to foreclose properties, garnish wages, and turn off the water of anyone who is delinquent on payments.
Several years ago, when James started getting complaints about HOAs running amok, she held a hearing and was overwhelmed with aggrieved homeowners.
“At least 400 people came, and many others were on Zoom,” she recalls. “I couldn’t believe the stories I was hearing.”
(Courtesy of wsbtv.com)
James says homeowners were losing their houses over cars that weren’t even theirs, parked on the street in front of their homes. Lawns with grass over 4 inches or a shed painted the wrong color were among other severely punished infractions.
Many homeowners told James they’d been caught in a labyrinth of fines and attorneys fees they couldn’t escape—even after paying everything they thought was owed.
“What would start as a $200 penalty could quickly rise to $5,000,” James explains. “And once [HOAs] get $4,000 in penalties, they can sell your home on the courthouse steps.”
That’s what happened to Quigley, who told WSB-TV that after missing only two HOA payments, she soon owed thousands—and no matter how much she paid off, she could never dig herself out.
“Every email, every inquiry, every attempt to contest, fix, or even pay the overdue bill adds to the bill,” she told the outlet.
Quigley’s home of 18 years was sold at auction for spare change.
“They just showed up and threw all my stuff on the lawn,” she told another outlet.
James says there “were so many horror stories, I had to tell my fellow lawmakers, ‘This is happening in your district, too.”
So she joined bipartisan forces with Republican Matt Brass, chairman of the Rules Committee.
Brass tells Realtor.com he was initially skeptical of James’ claims because they were so outrageous. But then he heard it directly from homeowners in his district.
“It’s tragic,” he says. “We’re talking about people losing generational wealth over someone not mowing their grass. It’s jaw-dropping.”
Brass notes that HOAs have lien priority over the banknote.
“That doesn’t even sound right to me,” he says. “The more you dig into it, the more it stinks.”
Why HOAs are so powerful?
Matthew Carlton, a Decatur, GA, attorney who represents HOAs as well as homeowners, says he has seen some egregious overreaching by the associations. In one case, an elderly woman racked up $10,000 in fines simply for having a bird feeder.
“I really dislike the way some HOAs operate,” he says.
In another case involving an elderly woman, the attorneys fees had gotten so high that even the judge was incensed and dismissed them all.
“Steam was coming out of the judge’s ears,” Carlton says.
The woman was one of the lucky ones. Carlton notes that it can be extremely difficult for homeowners to even find a lawyer to take their case, as most firms represent HOAs and won’t cross over to owners. And even if a homeowner can find a lawyer willing to take on a case, affordability becomes an issue.
In Georgia, the right of an HOA to collect assessments is “absolute,” Carlton says. So even if a medical emergency meant you couldn’t pay fees for a limited amount of time, you would still get sucked into the vortex of ballooning fines.
In March, the Georgia State Senate passed a bill to create a committee to study how to best help homeowners, while cracking down on overreaching HOAs.
“Our first step is to save people’s homes,” says James.
Adds Brass: “We need to find out what kind of remedies people have and, if they don’t have any, how we can give them some.”
A key component of the proposed bills will be to forbid the practice of fines continuing to accrue despite homeowners having paid off everything owed to their HOAs. Another facet of the recommended legislation would force HOA boards to meet regularly, record minutes, and have a transparent voting process that doesn’t take away the vote of anyone who owes a penalty.
(Courtesy of wsbtv.com)
The proposed bills would also limit an HOA’s ability to claim nonprofit status. Many HOAs register as nonprofits; but given their ruthless collection of fines, Brass observes that many of them “don’t seem to be following the law of operating like a nonprofit.”
Many states—including Arizona, Florida, Idaho, South Carolina, and Colorado—have passed laws designed to curb HOA abuse of power. But the laws can be defanged. For instance, a provision in the Colorado bill to cap HOA attorneys fees—which are passed along to the homeowner—was jettisoned after intense opposition from the powerful HOA lobby, Community Associations Institute, according to ProPublica.
Brass says if a homeowner can’t afford a lawyer to go up against their HOA, the best bet is to contact the consumer affairs division of a government branch such as the governor or attorney general’s office.
But this isn’t always a solution.
One homeowner at risk of being foreclosed on, because of accrued HOA fees, showed Realtor.com multiple emails reaching out to Georgia Attorney General Christopher Carr and Douglas County District Attorney Dalia Racine, as well as local sheriffs and judges.
“Can one of you have the decency to respond?” he finally asked them in desperation. No one did.
As for avoiding HOAs altogether, good luck with that. It’s become “almost impossible” to buy a house that doesn’t belong to one, especially in newer developments, according to 11 Alive.
Why is it happening?
Many say that the rise of HOAs is the result of governments offloading their responsibilities of town maintenance. That has led to a symbiosis between government officials and HOAs that often leaves residents with nowhere to turn for help.
And why are many HOAs so aggressive? Well, partially because it seems to be financially beneficial.
In 2021, an Atlanta-Journal Constitution investigation found that at least one board member of Columbia Square Condominium Association in DeKalb County, GA, was scooping up the homes of owners the HOA had aggressively foreclosed on, then turning around and reselling them.
And the entity that bought Quigley’s home on the courthouse steps for a mere $3.24?
It was her HOA.
Homeowners fight back
David Matthew Bozone and his wife, Jessica Navas, who live in the same subdivision as Inostroza, were shocked when they began hearing from neighbors about rampant foreclosures, liens, garnished wages, and fines by the subdivision’s HOA, the Belmont Park Homeowners Association.
(David Matthew Bozone)
The couple had already experienced run-ins of their own with the HOA. A hurricane-damaged tree and dumped trash that the couple says was the HOA’s responsibility to deal with led to fines and mutual lawsuits.
Bozone says no matter where he and his wife turned, whether to law enforcement or government representatives, they were stymied by the power of the HOA.
But he and Navas kept fighting. And, finally, the couple managed to band together with most of the subdivision to vote out the HOA board. The new board is made up of residents who have “all been exploited under the system,” says Bozone.
Despite suffering what he says are retaliatory actions by the old board—including a death threat and having his Ring camera destroyed with what appeared to be a machete—Bozone and Navas refuse to be run out of town.
“My wife is from Ecuador,” he says. “This is small stuff.”
