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Could late HOA payments go to attorneys, service fees first?

Posted: 8:14 AM, Feb 26, 2019
Updated: 2019-02-26 11:53:42-05
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PHOENIX — Right now homeowners who are behind on HOA assessments must have any payments applied to the delinquent assessment first.

Other charges and attorney fees get paid once you're caught up.

But homeowner advocate Dennis Legere says that may not be the case for much longer if Senate Bill 1531 passes as written.

Legere's group, Arizona Homeowners Coalition advocates for homeowners rights. They oppose the bill.

He says the bill would give HOA attorneys and management companies first dibs on money meant for your assessment.

"This bill goes backwards; actually will artificially generate delinquencies," Legere says he fears those delinquencies will increase foreclosures. Under current law, HOAs are only given that right for unpaid assessments -- not late charges, service fees and attorney fees unrelated to the original debt.

Legere argues that SB1531 could funnel your money straight to attorneys. Keeping your assessment unpaid and forcing you into foreclosure.

"Quite frankly it's simply greed," he says.

Last week the Senate Committee on Government passed the bill 5-2. With several members expressing concern with the language, chairman and sponsor Sen. David Farnsworth (R-Mesa) promised significant amendments before a full Senate vote.

According to filings with the legislature, two industry groups are listed in favor of the bill: Arizona Association of Community Mangers (AACM) and Community Associations Institute (CAI).

The AACM declined to comment for our story until language is changed in the bill.

CAI sent a statement saying that in now opposes the bill, saying in part:

"...we believe this legislation will cost the association more to collect assessments from individuals who may fail to pay their portion of community assessments."

Other parts of the bill would mandate that management companies send a monthly statement to community members for an additional fee and would require that correspondence be sent to the last known address of homeowners.

It is unclear which part of the bill CAI's statement was addressing. Requests for clarification were unanswered.

Legere is concerned that the bill will be passed without important changes he says will protect homeowners.

"The fact is, it totally circumvents the law and allows these debt to balloon up beyond control," he says.

On Monday afternoon the bill passed the Senate Rules Committee and is on Tuesday's Senate Caucus calendar .

You can find your lawmaker and tell them what you think here.