J & N REALTY, INC.

When Foreclosure Is the Final Option 

 

Countless Americans face foreclosure when their lending institutions are unable to collect mortgage payments.  In an ideal world, no one would ever face foreclosure—for any reason.  However, that world does not exist.  Banks and other lenders foreclose on homes when owners default on their loans.  Although relatively rare, association-initiated foreclosures are occasionally required to recover delinquent assessments. 

 

It is important to remember that homeowners choose where to live, and by choosing to live in a community like ours, they accept a legal responsibility to abide by established policies and meet their financial obligations to the association and their neighbors. 

 

Association budgets 

 

Associations rely largely—many exclusively—on homeowner assessments to pay their bills, which can include landscaping, garbage pickup, pools, street lighting and insurance.  For condominiums and cooperatives, these costs include building maintenance, utilities, and amenities enjoyed by all residents.  

 

You trust our board to develop realistic annual budgets.  We base our assumptions on careful cost projections and anticipated income primarily from assessments.  Our budgetary obligations do not change when some owners do not pay their fair share.  Common grounds still must be maintained.  Garbage must be collected.  Utilities and insurance premiums must be paid.  

 

When homeowners are delinquent, their neighbors must make up the difference or services and amenities must be curtailed.  The former is an issue of fairness; the latter can lessen the appeal of the community and erode property values. 

 

Liens and foreclosures 

 

When an owner fails to respond to repeated attempts to collect the debt, the association can be left with little choice but to place a lien on the property.  The magnitude of this decision requires an approach that is fair, reasonable, and consistent and that complies with applicable laws, practices and procedures set forth in the governing documents that guide our decision-making. 

 

We believe homeowners facing foreclosure deserve a reasonable opportunity to appeal to the leaders of the association.  Knowing that people occasionally face financial hardship—a lost job, for instance—we will try to work with homeowners to bring their accounts up to date. 

 

Nobody wants to foreclose on a home—not a mortgage banker and certainly not our association.  However, the threat of foreclosure is often the only tangible leverage an association has to ensure fairness and shared responsibility.  Without this option, many residents would simply choose to default on their obligation to their association and neighbors.  How many Americans would pay their taxes if government had no means of enforcement?  

 

With each additional delinquency, an association’s financial position can become increasingly precarious, a situation that is exacerbated in a depressed housing and economic climate.  

Placing a lien on property, with the ability to foreclose, is typically enough to get delinquent residents to meet their financial obligations to the community—without removing the owner from his or her home.  When that fails, associations turn to the final—and unfortunate—option of foreclosure.   

 

We want you to know that we understand the magnitude of this decision and why it may occasionally be necessary. 

 

Above all else, association leaders are responsible for sustaining the financial viability and stability of the association.  As noted earlier, our budgetary obligations do not change when assessments are not paid.  Services residents expect must be provided; the community must be maintained; bills must be paid; and our investments and property values must be protected. 

 

 

Mold Management 

 

It is a problem man has battled since the dawn of time—controlling mold.  It lurks in the corners and can cause major damage and nasty health issues.  As long as moisture and oxygen are present, mold can grow indoors or out on virtually any organic substance, including wood, paper, carpet, insulation, and food.  When excessive moisture accumulates in buildings or on building materials, mold growth will often occur, especially if the moisture problem remains undiscovered or unaddressed.  

 

It is impossible to eliminate all mold and mold spores in the indoor environment.  However, mold growth can be controlled by keeping moisture in check.  Moisture control is key—mold cannot grow without it. 

 

Left untreated, mold gradually destroys the material on which it is growing.  Because molds produce allergens, irritants and toxins, they have the potential to cause a variety of health problems and can exacerbate existing conditions, such as asthma.  

 

If mold is a problem in your home, clean up the mold and get rid of the excess water or moisture.  If an area becomes water damaged, it is important to dry that space and any damaged items within 24–48 hours to prevent mold growth.  Fix leaky plumbing or other sources of water to prevent recurrence.  Wash mold off hard surfaces with detergent and water and dry completely.  Absorbent materials (such as ceiling tiles and carpet) that become moldy may have to be replaced. 

 

For more information on how to clean up residential mold problems and how to prevent mold growth, download the Environmental Protection Agency’s free publication, A Brief Guide to Mold, Moisture, and Your Home at www.epa.gov/mold/pdfs/moldguide.pdf . 

 

 

What Your Association Board Does for You 

 

As a recognized homeowners association, our community has a board to help our HOA run smoothly.  The board consists of volunteers who execute a wide variety of tasks you may not be aware of; however, their work affects every single resident.  

 

One of the most important things the board does is create and enforce the association rules.  While some residents may not like being told what they can and cannot do, ultimately the board is looking out for the greater good.  By enforcing the rules, the board is doing its best to keep property value up and conflicts down.  Of course, the board wants to make sure the rules are beneficial for the majority—and hopefully all—residents.  You are welcome to raise concerns about the rules at open board meetings. 

 

Another major responsibility of the board is to collect assessments from homeowners.  Collecting this money is important for the stability of the association, because the assessments pay for the common elements enjoyed by all residents.  Assessments also help to replenish the reserve funds, which pay for any major repairs the association may need.  The board is responsible for the association’s finances, and collecting assessments is how it ensures that the association remains solvent. 

 

Finally, the board acts on behalf of the association by hiring managers, attorneys, contractors and other professionals who help better the association.  Board members also help conceive and lead many of the projects that will improve the HOA. 

 

While it is a big job, board members are happy to serve the residents and make the community a great place to call home.  So why not learn more about what these volunteers do by talking to your board members, attending an open board meeting or even running for a seat on the board during our next election?  The more people we have looking out for our association, the stronger it will be. 

 

 

Over Your Head

 

When it’s time to maintain, repair or replace the roof on your home, it’s a good idea to get to know the wide variety of roofing materials that are available and what each has to offer.  

 

Asphalt shingles, wood shakes, clay and concrete tile, metal and slate are roofing materials that are best suited for sloped or pitched roofs.  Each has a distinctive appearance and come in a variety of colors.  Because of its added weight, tile and slate may require you to strengthen the frame of your home to support the roof.  Metal roofs can be noisy and also absorb heat, which means you may need to add extra insulation beneath them.  Rubber sheeting (ethylene propylene diene monomer, or EPDM), tar, PVC membrane, and built-up roofs—including tar, bitumen and rolled materials—are most appropriate for flat roofs.  

 

Green roofs, which are made from a layer of vegetation over a waterproof membrane, are also best suited for flat roofs.  They provide insulation, contribute to lower air temperatures, and counteract the heat island effect (or the ambient temperature, depending on where you live).  The eco-friendly benefits of green roofs are particularly noticeable in urban areas.   

 

Foam roofs are lightweight, cost effective, and adaptable to all kinds of roofing shapes.  They can last up to 50 years when properly maintained. 

 

When selecting a roofing material, consider the pitch or slope of the roof, the strength of your home’s frame, typical weather conditions, and the budget in addition to appearance.  The durability and life span of a roof can also depend on the quality or grade of the material used, as well as the workmanship of the installation and regular maintenance.    

 

 The Value of Our Association Attorney 

 Like our manager, our community’s legal counsel is one of the most important people, other than volunteers and residents, involved in our association.  Not a volunteer, but a paid—and integral—member of our association’s professional team, our attorney is intimately familiar with what is happening in our community.  In addition, because community association law is complex and ever changing, our association’s attorney is knowledgeable in a wide variety of practice areas that can affect our association, including: 

•           Premise liability 

•           Construction warranty 

•           Directors’ liability 

•           Real estate 

•           Contracts 

•           Architectural and design review 

•           Insurance 

•           Employment 

•           Taxation 

•           Environmental law  

•           Water regulation 

•           Collections and foreclosure