Arizona Homeowners Association Foreclosure Tracker
Ask anyone living in a neighborhood run by an HOA, and you’ll likely hear a rant.
It could be anything from fights over paint colors to parking lots or trash cans.
HOAs are one of the most controversial topics I’ve covered in my 22 years as a real estate journalist in metro Phoenix.
Half of all owners in Valley live in a community association; many people have strong opinions about them.
I hadn’t delved deeply into the world of HOAs until this year because many of the issues were community stories.
But in the past year, complaints against HOAs in the Phoenix area have increased. I started hearing from owners with HOA issues almost daily.
Arizona Republic Community reporter Jessica Boehm has written many stories about HOA battles in the West and East Valley, and she quickly became an expert.
Late last year, Boehm started hearing about homeowners losing homes to HOAs through foreclosure, which most people don’t realize is legal.
I am, unfortunately, a foreclosure expert because of the real estate crisis. So we teamed up and have spent the past eight months investigating HOA foreclosures.
It was not easy. Prior to 2014, there were so few HOA foreclosures that no one was tracking them.
We looked for a state agency that regulated HOAs and found there was none. The Arizona Department of Real Estate began handling arbitration between HOAs and landlords last year, but unfortunately cannot help people facing foreclosure.
“While so many professions and places are regulated — from real estate agents to pet cremation centers — community managers and HOAs are not subject to such state oversight,” Boehm said. “It has made it difficult for us to navigate this expanding industry.”
And HOA foreclosures are not filed like regular foreclosures that can be tracked through real estate records. Half of an HOA foreclosure is filed as a court document and the other half is a real estate file.
So we created a comprehensive database of all HOA registrations, with the help of The Information Market.
Our survey found that HOAs were excluding a record number of homeowners for as little as $1,200 or a year of missed dues.
We also found out who these landlords were, what HOAs foreclosed the most, the attorneys who handled the most foreclosures for HOAs, and the investors who bought HOA foreclosure homes at auction.
And we’ve been shocked by some of the legal fees charged to landlords who don’t make their payments.
From the start of the survey, we had a hunch that more HOAs were foreclosures because home values in the Valley are up and investors are now lining up to buy the homes. Three or four years ago, the houses in the valley were worth much less than today.
We went to several HOA Sheriff’s Auctions in downtown Phoenix. The room was packed with bidders as there were so many more bargains among HOA foreclosure homes on the block.
We contacted dozens of homeowners who were at risk of losing their homes to foreclosure or who had already done so. Some didn’t want to talk to us because they were embarrassed; others were angry and wanted people to know their stories.
Every homeowner we spoke to said they felt bad about not being able to pay their HOA fees and wanted to catch up and keep their homes.
A pretty horrific recession and housing crash from 2008 to 2011 forced many of these homeowners to make some tough choices. Sometimes it was paying HOA dues or buying food.
Almost every homeowner we spoke to was shocked that their HOA could be excluding. Most people don’t know it’s legal, even though it’s in the covenants, conditions and restrictions that homeowners sign when they complete the purchase of their home – often buried in those many pages of rules. .
I have never lived in an HOA. Boehm, who now covers the city of Phoenix, grew up in an HOA community and bought her first home in a neighborhood with an HOA.
“I had no idea the power of these associations until Catherine and I started getting calls from people who were about to lose their homes,” Boehm said.
“I’ve been covering basic HOA issues for years — things like paint colors and neighbor feuds. But I was shocked there was a deeper underlying issue.”
Boehm and I are looking at other HOA issues besides foreclosures. We spoke at length with the Arizona Association of Community Managers. We know that HOAs serve a necessary purpose for many homeowners.
But not all HOAs are members of this industry group — only about 60% — and Valley owners in a dispute with a community association have little recourse but to hire a lawyer.
We started with the HOA foreclosure issue because of how serious it is for homeowners. But we know homeowners face many other issues. Please contact us if you have a story to share.