Foreclosure risk for late HOA dues

AUSTIN (KXAN) - How would you like to lose your $250,000 home over not paying your homeowner's dues?

It is a closer reality for Mark Lyne, an insurance agent, in Williamson County. Lyne received a letter last week from his Homeowners Association in the Woods of Brushy Creek subdivision in Northwest Williamson County, that said the HOA intends to foreclose if he does not pay his $1,267 fine.

"So they're going to come and take our $250,000 asset so they can get their $1200," said Lyne.

Lyne, who lost his job in 2005, has admittedly faced financial difficulty. He admits not paying his dues because of other choices in his life.

"When you’re faced with paying your property tax, and your insurance, and your water and your electric bill, versus paying the HOA assessment," Lyne said. "HOA typically falls at a lower priority."

He said he was surprised to see the notice in the mail. He admits he should have paid his dues, but does not see the logic in taking away his house. Lyne said that is the last thing neighbors should do in a down economy.

"How is putting a family out for $1,200 preserving a community?"  Lyne asked.

Adam Pugh, a lawyer for the Woods of Brushy Creek HOA, begs to differ.

"One of the ways people are able to preserve the value of their home in a declining market is to enforce the restrictions," said Pugh.

Pugh said the association has sent Lyne and at least seven other homeowners letters describing their levels of delinquency.

"It's this type of action that we have to use to get people's attention," he said.

The deed restrictions and bylaws for the homeowners association clearly state the association has the right to foreclose should a homeowner not pay on time. In the subdivision, at least eight homeowners had liens placed on their properties in October 2008, and five homeowners had liens placed earlier this week, according to Williamson County records. A lien is the step before an intent to foreclose letter.

"This neighborhood in particular is just chock full of people that pay they are dues on time in the full amount every single time," said Pugh. "It's a very small group causing a large problem. If the dues are not paid, then certain services can't be provided for everyone."

Another homeowner in the neighborhood thought the intent to foreclose letter to different neighbors may be a bit harsh, especially when times are tight.

"I think everybody has to give a little right now," said Sue Mann, a homeowner in the Woods of Brushy Creek subdivision. "Even stores have reduced their prices and things," she said. "I don’t think it’s time to take the one most important thing away from someone which is their home."

Lyne, meanwhile, said he has plans to pay his dues, but still does not believe "sabre-rattling" letters with the intent foreclose are valid remedies to improve the neighborhood.

"Search your soul. Search your heart. Is it the right thing to do?" said Lyne. "It got my attention, but it's also not right."