California allows homeowner associations through their attorneys to seize property by non-Judicial foreclosure and pocket the owner's total equity

February 08, 2006

By Mark Schoenfeld (View author info)

Homeowner Associations have been one of worst consumer failures in the State of California.

The Davis Sterling Act provides for the most devastating of devastating "takings". It is akin to non-judicial foreclosure to the uninformed seniors and new homeowners who have stumbled across the misfortune of purchasing a home subject to an Homeowner Association.

In many cases they are subject to ourtrageous monthly association fees not reflective of what it actually costs to maintain common areas, not to reiterate the abuses that HOA's have the legal right to impose on them.

I can't think of any area of California law, with the exception of the Davis Sterling Act can strip an owner of his equity by allowing the Homeowner Associations through their attorneys to seize their property by NON-Judicial foreclosure and pocket the owner's total equity. Even hard money lenders cannot do that; and by all rights they should be.

Even they are only entitled to recover their actual damages pursuant to the civil code provisions for Judicial Foreclosure.

Shame on our Governor for failing to remedy this when he had the opportunity. But more embarrassing is that California voters haven't stood up for our first time homebuyers, parents, grandparents, and those who mistakenly believed that the only thing they could afford was a "project" where they share the costs of common areas.

Lastly, shame on our City Councils, Boards of Supervisors, Planning Commissions, that routinely approve these "projects" in the bliss of ignorance that they are assisting the public by providing affordable housing.

And as a P.S, most of the Associations were supposed to have been taken over and managed by the owners once a certain percentage of the "project" (without back yards most of the time for the sole purpose of enhancing developer profit and greed)was sold.

If the fees paid by owners are for maintenance of the common areas, including the management of those areas by outside contractors, they need to unite and quit outsourcing the management to foxes in a feeding frenzy in the chicken coop of free money by default.