Service Members | Foreclosures for Unpaid Homeowner Association Dues?

All things Considered reported on June 29, 2010 that Capt. Mike Clauer was serving in Iraq last year as company commander of an Army National Guard unit assigned to escort convoys when he received notice that his house was being foreclosed on by his neighborhood's homeowner's association. As if Clauer needed this worry piled on his day!

Clauer's duty assignment involved exceedingly dangerous work — explosive devices buried in the road were a constant threat to the lives of Clauer and his men. [Photo from Mike Clauer]

This NPR story wouldn't come about if we were talking about just one family. Clauer was halfway through his deployment when he got a bolt from the blue — a frantic phone call from his wife, May, back in Texas.

"She was bawling on the phone and was telling me that the HOA [homeowners association] had foreclosed on our house, and it was sold," he says. "And I couldn't believe that could even happen." 

Clauer had a hard time understanding what his wife was saying. His $300,000 house was already completely paid for. Could it be possible that their home was foreclosed on and sold because his wife had missed two payments (a few hundred dollars) of their HOA dues?

In many states it is not difficult for an HOA to foreclose on a member's home for past dues even if the amount owed is just a few hundred dollars.

"I was really in a hurry trying to get home before my family was living on the streets," Clauer says.

Was there an opportunist at work? By the time Clauer got back to Texas, it was too late. His family's  four-bedroom, 3,500-square-foot home had been sold on the courthouse steps for just $3,500 — enough to cover outstanding HOA dues and legal costs. The new owner ["carpetbagger"?] quickly sold it for $135,000 and netted a tidy profit.

Our military families usually own very small marital estates. Normally, the retirement plans are the only or the most significant asset. Owning a home or having substantial equity in a home is unusual. So the Clauers, who thought they were so far ahead are now starting all over.

Such a simple little thing--remembering to pay the HOA dues? When our service members are under stress on deployment, it's not such a simple thing. Left-behind spouses have to manage all of the family affairs and usually full time employment as well.

Let's help out our service members by circulating this information so that perhaps many others can avoid such scurrilous behind the back actions.

You may read the NPR "Not So Neighborly Associations Foreclosing On Homes" by Wade Goodwyn here, or listen to the audio.

Update:    Mike Clauer and his wife got their home back in a confidential settlement. Details are here.

Near the end of the 2011 legislative session, the Texas legislature  passed a law that protects service members from foreclosure when they are on active duty and also for a period of time following their return.  SB 101 was passed to make it clear that HOAs cannot foreclose on homeowners on active duty or nine months following active duty without a court order (unless waived), and improves the notice given to all property owners so military families might know their rights regardless of who intends to foreclose. Details are here

Dallas News Story is here.

Comments

[Jeanne M. Hannah]

Amy, that is a really good question. The article said that some of these laws allowing HOA to foreclose do not require judicial procedures, so that would likely explain why the service member wasn't protected by SCRA. Here is a link to an excellent explanation of the Servicemember's Civil Relief Act. Although written for judges, it's helpful to lawyers and laypeople alike. http://tinyurl.com/29umagf

Jeanne

[Andrea Cross]

I wonder -- why wasn't this military personnel protected by the Soldiers and Sailors Civil Relief Act?