Immigrants' Homeowners' Association Issues

It is difficult enough to explain to our immigration clients that there are two levels of government, federal and state (counties and cities being political subdivisions of the state), let alone trying to explain a third level of government that has been imposed upon them once they move into a “common interest development” that is governed by a homeowners’ association.

A homeowners' association (HOA) is an organization created by a real estate developer for the purpose of developing, managing and selling a development of homes. In California alone, an estimated 45% of all housing are “common-interest developments” in which homeowner’s associations collect over $9 billion dollars per year in homeowner’s dues (called “assessments”) from the homeowners who live in the developments. Many immigrants currently live in common interest developments, having no idea of the unexpected problems that they may face after purchasing their homes. Some of these problems stem from:

- special assessments (dues other than the regular monthly assessments or dues)
- immigrants’ inability to be involved with HOA governance because of language or cultural issues
- intrusive and restrict HOA rules that may conflict with immigrants’ personal or cultural values.

Immigrants, in particular, are often unaware that they have not just bought a home, but have assumed a shared liability in managing a housing complex. In addition, some homeowners’ associations have taken up the enforcement of federal immigration laws. One homeowners’ association recently decided that it has the right to deny residency based on immigration status. The HOA, a trailer park in the Dallas, Texas, area, has required proof of legal status, and refused to allow a new buyer’s water or electricity to be turned on because he was not in status. Even though immigration matters are reserved for the federal government under the constitution, there is little regulation or oversight over HOA’s, and this constitutional violation goes unchecked.

The number one issue facing immigrants in common interest developments is foreclosure, which HOA’s will often pursue even when small amounts of money are overdue. In California, for instance, homeowners’ dues may increase up to 20% per year without the prior approval of the homeowners. In this way, even a home that is paid off may be foreclosed on if the dues are not paid. This concept is foreign and incomprehensible to many immigrants and limited English speakers, who often do not realize they are losing their homes until it is too late.

Given the above, there are seven basic rights that immigrants (and indeed all homeowners) in homeowners’ associations should know:

1. In order for the HOA to foreclose, the amount owed must be $1800 or more, or else must be more than 12 months overdue.
2. The HOA cannot foreclose for fines or penalties. (Fines and penalties accumulate quickly when the HOA has hired a collection agency.)
3. Before collecting assessments (i.e., homeowners’ dues), the HOA must give the homeowner annual, written notice of its collection policies, including any policies on foreclosure.
4. The HOA must give 30 days written notice to the homeowner before recording a lien on the homeowner’s home. Within the 30 days, the homeowner is entitled to meet with the HOA Board of Directors to verify whether the homeowner indeed owes the money. The homeowner may ask for a payment plan and can dispute the alleged debt using a neutral third party.
5. The homeowner is entitled to see all the HOA’s accounting records to verify the debt; and is not liable for collection costs or charges if the dues were actually paid on time.
6. If the HOA hires a collection agency to collect the homeowner’s debt, the collection agency must comply with state and federal fair debt collection laws.
7. If the HOA forecloses, the homeowner has 90 days in which to repurchase the home from the person or entity that had the winning bid at the foreclosure auction.

About the author: Kathleen Lord-Black is an immigration and foreclosure defense attorney whose offices are located in downtown San Francisco and in Santa Cruz, CA. She has served as Immigration Consultant for the San Francisco Public Defenders Office, 2005 Chair of the Immigration Section of the Barristers Club of the Bar Association of San Francisco, and former Congressional liaison for U.S. Representative Farr. Ms. Lord-Black is an active member of the Center for California Homeowner Association Law in Oakland and the American Civil Liberties Union. Her articles regularly appear in the Bay Area Arabic-language newspaper, Alra’i Alarabi. Ms. Lord-Black can be reached via email at kathleen@kathleenlord.com; and by telephone at (415) 205-5601 and (831) 332-7515. Her web address is www.kathleenlord.com.