All across the country, struggling homeowners are making tough decisions about what bills they are going to pay. And many times, their homeowners’ association bill is relegated to the bottom of the pile. In Carson City, Nevada, the HOA lobby is making some serious and legislatively-supported moves to make that decision a little more costly. Senate Bill 174 and Senate Bill 254 would, respectively, enable HOAs to collect as much as $1500 in excess of the debt owed if they are forced to turn over HOA dues to debt collection and require homeowners and HOAs to undergo formal mediation and arbitration should homeowners lodge complaints against their HOAs [1]. The latter can effectively prevent complaints because homeowners may not be able to afford the fees for the mandatory mediation. The former, critics argue, could push distressed homeowners right over the edge into foreclosure, which some HOAs actually believe is better for business than having a delinquent homeowner in the house because often the foreclosing lender or the next buyer will pay off the HOA lien.

Homeowner advocates say that ultimately, both of these bills can lead to homeowners being “trapped” into foreclosure [2]. They point out that 85 percent of arbitration cases go against the homeowners. However, state Senator Allison Copening says actually SB 254 helps homeowners because it limits the cost of arbitration to far less than the going rate, and points out that homeowners who feel that they are being harassed by their HOA often “discover that they were indeed in violation of HOA codes, covenants and regulations when by-laws are presented at mediation.”

Do you think that these bills will be good for homeowners, HOAs, both or neither?

Similar Posts:

Share