In the 2007 Arizona legislature, the Community Association Institute and the Arizona Association of Community Managers were instrumental in defeating two key pieces of legislation important to homeowners in HOAs:
SB 1330 Homestead Exemption
would have restored the statutory right of the Homestead Exemption to ALL HOA homeowners – a right that was taken away from the HOA members by state statute in 1996. In Arizona, every person age 18 or older who resides in the state whether married or single, may hold a ‘homestead exemption’ exempt from attachment, execution and forced sale, certain property worth $150,000 or less. A person who is entitled to a homestead exemption holds that exemption by operation of law and no written claim or recording is required. BY STATUTE, THE HOMESTEAD EXEMPTION IS DENYED TO ALL HOMEOWNERS IN HOAs.
Southern Arizona Senators Voting Record (2007 Final Reading)
SB 1330 Homestead Exemption
Yes Paula Aboud
Yes Marsha Arzberger
Yes Jorge Luis Garcia
Yes Victor Soltero
NO Charlene Pesquiera
Yes Timothy S. Bee
The bill passed both the House and Senate but was vetoed by the Governor on a technicality.
SB 1340 Fair Market Value
would have required the sale of property to satisfy a judgment of an association to be sold for at least fair market value with all remaining balances paid to the home owner after payment of prior liens and encumbrances as otherwise provided. Now as before, the foreclosure of a HOA member’s home can be sold for pennies on the dollar, leaving the homeowner financially broke since all of their equity is gone. Only people who live outside HOAs have fair market value protection. Many times, at the sheriff’s foreclosure sale, the HOA will buy the home for a few hundred dollars and turn around and sell it at the fair market value price and pocket a huge profit. The homeowner, however, can stop the foreclosure by paying the total judgment owed and they have the right to ‘redeem their property’ within 6 months after the foreclosure sale.
When you purchased your home, did you know you were giving the HOA a permanent priority lien, running with the land, even when you owe nothing?
People who registered against the 2007 SB 1340:
Stan Barnes, Southern Arizona Home Builders Association
Rob Dalager, Diamond Ventures
Kevin B. DeMenna, CAI lobbyist
Jon Dever, Leisure World HOA
Linda Lang, Arizona Association of Community Managers
Scot Mussi, Home Builders Association of Central AZ
Jeff Sandquist, AZ Association of Community Managers & Robson Communities
Southern Arizona Senators Voting Record (2007 Final Reading)
SB 1340 Fair Market Value
NO Paula Aboud
NO Marsha Arzberger
Yes Jorge Luis Garcia
Yes Victor Soltero
NO Charlene Pesquiera
Yes Timothy S. Bee
The bill was defeated in the Senate by NO votes.
One of many letters to the Arizona senators in support of SB 1340.
From: Monika Grewe
To: Victor Soltero ; Timothy Bee ; Thayer Verschoor ; Ron Gould ; Robt (Bob) Burns ; Richard Miranda ; Rebecca Rios ; R Blendu ; Paula Aboud ; Marsha Arzberger ; Linda Gray ; Ken Cheuvront ; Karen Johnson ; Jorge Garcia ; John Huppenthal ; Jim Waring ; Jay Tibshraeny ; Jack Harper ; J Flake ; Gray, Chuck ; Carolyn Allen ; Barbara Leff ; Albert Hale ; Tom O'Halleran ; Pam Gorman ; Debbie McCune Davis ; Leah Landrum Taylor ; Meg Burton Cahill ; Amanda Aquirre ; Charlene Pesquiera
Sent: Monday, June 11, 2007 9:32 AM
Subject: PLEASE PASS - SB1340 HOA FORECLOSURE MARKET VALUE
Dear Senators,
I respectfully request that you pass SB1340 on Final Read today to implement a simple solution to abusive HOAs that foreclose on homeowners, selling their properties for pennies on the dollar of value. A simple appraisal(s) for which the costs can be added to the to the selling fees, will still allow foreclosure and debt collection, but will prohibit the unconscionable stripping of ALL of the homeowner's equity in their property.
A good example of this type of abuse is the case of Jeanne White, which I have presented to you earlier on this session. Ms. White, a widower with no family or legal guardians, became ill with dementia/Alzheimer' s, and went into long-term care. The Ventana Lakes HOA foreclosed on her property for $2550 in assessments, late fees, and interest. After tacking on attorney fees and other costs, they not only SOLD her home at sheriff's sale in April, 2006 but they THE HOA BOUGHT her home for $10,393!! After the 6-month redemption period expired (remember, Ms. White had no guardian to act on her behalf), the Ventana Lakes HOA sold the property in December 2006 for $123,262.
As outrageous as this case is, no statutes appear to have been broken. I firmly believe that SB1340 would have required the HOA to at least not be able to profit (they are supposed to be a non-profit corporation) so excessively, and perhaps they might have spent a little less money in attorney costs and utilized the option of debt collection via the reverse mortgage lender agreement.
Ms. White's case is an extreme example, but it is by no means an exception to HOA foreclosure abuse for nominal amounts that strip delinquent homeowners of all their equity. When financial lenders foreclose on properties, there are fair market value requirements on the sale - why are HOA foreclosures not held to the same requirements? ?
PLEASE PASS SB1340 - HOA FORECLOSURES FOR MARKET VALUE.
Sincerely,
Monika Grewe
