How do you negotiate with an unreasonable HOA/Property Manager or Attorney

Last week I lost a short sale because the buyer became so disenchanted with the hard line the HOA and their attorney's were taking, he refuses to live in the development! This attorney actually sent me an ESTOPPEL letter reducing the agent's commission by 1%, knowing full well that it would only benefit the 1st lender, they just felt that the agents should have to suffer!

And, this week, its happening again... In both cases the HOA will ONLY waive the late and interest charges and they will not take a penny less than all of the outstanding monthly assessments. The property manager says that this is the only thing that the board has to fight back with for having to listen to people complain about not having the money to pay the assessments. I kid you not, I am at a loss...

Doesn't the PM or the attorney have any fiduciary responsibility to advise the board that they should take $4,000 on a $6,000 debt, instead of $1,200. next year when it finally forecloses?

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Gretta, in most cases the HOA plays the hardball game and it is hard to get them to agree to your terms. Have the buyer pitch in the difference. In case of the HOA delinquency, I usually have the seller and buyer pitch in to get the HOA off their backs
They already have pitched in... and so have I, its still not enough! My real question is more about the "why" would they rather take less money and much later and perpetuate the foreclosure, than more money now and not have another abandoned house in the neighborhood with negative cash flow...

Rama Mehra said:
Gretta, in most cases the HOA plays the hardball game and it is hard to get them to agree to your terms. Have the buyer pitch in the difference. In case of the HOA delinquency, I usually have the seller and buyer pitch in to get the HOA off their backs

Both the attorney and the HOA manager take their orders from the Board of Directors.  (At least they do in California.)  Unfortunately, many HOA board members don't  understand their fiduciary duty to do what is in the best interests of the HOA. 

Maximizing their proceeds should be the goal, but sometimes they miss the point that $4,000 now is much better than $0 next year!  (I'm not sure why there could be $1,200 next year.)

I am on the 7-member HOA board of a 3500 home association, and have trained my fellow board members to do everything we can to avoid attorney fees, and to compromise when necessary to get short sales completed.  We always try to get as much as possible, but have to be realistic.

Sometimes, a carefully-worded letter to members of the Board of Directors of the HOA can help.  If their only advice comes from the management company, they may not truly understand the situation! 

Hi Vicki, Thank you for your reply, my thought was that I would try to appeal to the Board at the next meeting, maybe a letter would do. To answer your question about the 1200. is that in FL we have a law that entitles the HOA/Condo to 12 mos. of assessments in a foreclosure, in this case the Lis Pendens is the only legal action taken and that is why it would be another year before they saw a dime! I wish all boards had someone like you on them!!!

I would send the letter to the Board at least a week prior to their next meeting, and then attend the meeting in person and request to address them.  (You may have to make your presentation more theoretical or generic to avoid privacy concerns.)  Also, if you are not a member of that association, I recommend taking a member with you that you can "represent" at the meeting.

I attempted to make a presentation to a board last summer (while attempting to get the tract approved for FHA financing), after failing to get any cooperation from the manager, but the manager advised the board that since I was not a member of that HOA, I should not be allowed to speak at a board meeting!

Gretta Alvarez said:

Hi Vicki, Thank you for your reply, my thought was that I would try to appeal to the Board at the next meeting, maybe a letter would do. To answer your question about the 1200. is that in FL we have a law that entitles the HOA/Condo to 12 mos. of assessments in a foreclosure, in this case the Lis Pendens is the only legal action taken and that is why it would be another year before they saw a dime! I wish all boards had someone like you on them!!!

In California, a foreclosure would wipe out any HOA delinquent dues. 

With a short sale, the buyer wants clear title, and usually his lender demands it, so the delinquent dues must be either paid or negotiated.


Larry Davis said:

2--in CA can the HOA recoup the unpaid balances from the new buyer?
Vicky:  I'm with you.  I try to find out if there are any delinquent HOA's upon taking the Listing.  If there are, I let the Buyer know that that has to be considered in the amount offered.  If the Lender comes back with a ridiculous number, the buyer will still walk sometimes, but at least it's out in the open.  Same with any hidden assessments coming due..anything you can think of that they'll ask for to try to stop the Short Sale because remember..as Vicky again points out, these Board members are just like many of the Loss Mitigation people..they do NOT understand that they will get ZERO when it goes to Foreclosure and my Sellers may choose foreclosure rather than come up with more money to get out of their properties..thereby netting the HOA assoc. nothing.  People are not reasonable-they are short-sighted and forget that a bird in the bush...
FL has a "Safe Harbour" act that allows the HOA 12 mos of dues in the case of fc.

Larry Davis said:
1--How did you arrive to the #1,200 figure?  and 2--in CA can the HOA recoup the unpaid balances from the new buyer?

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