Here is a great example of why it is important to know HOAs (Home Owner Associations). In particular, why you need to read the CC&Rs (Covenants Conditions and Restrictions), as well as the Rules and Regulations (which describe what you can and can’t do with the property) and Bi-Laws (which describe how the HOA is run) when you purchase a home with an HOA.
Have a look at this story about possible changes in state law regard
ing when an HOA can force the sale of your home, and how one state senator wants to make it even easier for HOAs to take your property.
Current law: HOAs can foreclose on owners if they fail to pay their dues for a year or get behind by $1,200 — whichever comes first.
Suggested law: One senator wants to allow HOAs to foreclose if you are only six months behind on HOA dues, regardless of the amount.
Have a look at this article from the Arizona Republic for a run-down of the status of the issue.
Here is our take on this issue. First, it is surprisingly easy to get behind six months for some people. We saw it a lot during and after the Great Recession. I served on an HOA board myself, as we dug our way out of that terrible time and back to financial stability.
Second, there are many ways that HOA boards and board members can pile on fees when members first get behind on dues, such that getting caught up gets even harder.
So, while this is less of a problem in a strong economy, it could become worse the next time the economy weakens.
We are not posting this to take a position on this bill. Rather, this is a lesson in the importance of reading your HOA documents during your inspection period.
We understand HOAs and we can help you if you choose to sell or buy in an HOA. Call us at 602-456-9388 for more.
