Tag: homeowners’ association

4th Cir. : Kingston at Wakefield Homeowner’s Association, Inc. V. Castell (In re Castell)- Homeowner’s dues are unsecured unless Claim of Lien is filed.

Summary:

Homeowner’s association filed a Proof of Claim in the Debtor’s Chapter 13 case asserting that it was secured by a lien against the Debtor’s residence. The Debtor objected to the secured status as the HOA had not filed a Claim of Lien with the County Clerk of Court pursuant to the Planned Community Act (“PCA”) at N.C.G.S. § 47F-3-116(a). The HOA argued that its recorded Declaration of Covenants, Conditions, and Restrictions was sufficient under common law to hold a secured claim without the filing of a Claim of Lien. The bankruptcy court and district court sustained the Debtor’s objection.

The Court of Appeal held that even if the PCA is not the exclusive vehicle by which a homeowners’ association in North Carolina can enforce a lien for unpaid assessments on a homeowner’s property, the HOA’s common law argument failed as the Declaration required recordation of a Notice of Claim of Lien with the County Clerk of Court.… Read More

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4th Circuit: Fontell v. Hassett- FDCPA and Homeowner’s Associations

Summary:

Fontell brought suit against her Homeowner’s Association (“HOA”)alleging violation of the FDCPA, the Maryland Consumer Debt Collection Act (“MCDCA”) and the Maryland Consumer Protection Act (“MCPA”). When the district court did not grant her summary judgment on these claims, she appealled.

The Court of Appeals held that her assertion that the HOA violated the MCDCA by untimely bringing suit against her was not supported by evidence sufficient as a matter of law to grant summary judgment under Rule 56(a). The property management company, as it was always responsible for collecting the homeowner’s dues and not just after there was a default, did not constitute a “debt collector” under the FDCPA, as a default “does not occur immediately upon a debt becoming due, unless the terms of the parties’ relevant agreement dictate otherwise.” See Alibrandi v.… Read More

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Bankr. E.D.N.C.: In re Fifield- Burden of Establishing Proof of Claim Amount

Summary:

The Chapter 13 Debtors owned 26 lots in the Waterside Villages, secured by a Deed of Trust to the Bank of Currituck, which had foreclosed on the properties on July 29, 2009. Waterside Villages filed a Proof of Claim asserting homeowners dues of $77,844.00.

The Debtors objected to the Proof of Claim on basis that they had been denied access to the properties after Wachovia Bank foreclosed on the subdivision developer, preventing the Debtors from marketing the properties. Further, the Debtors alleged that Waterside Villages had done little to maintain the properties during this time, providing no basis for the asserted dues.… Read More

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Bankr. E.D.N.C.: In re Eldridge- Attorneys fees for Homeowner’s Association on Motion for Relief

Summary:

The Debtor filed Chapter 13 and his plan was confirmed, with property of the estate re-vesting with the Debtor at that point. Subsequently, the Debtor fell into default with his homeowner’s dues. The Homeowner’s Association (“HOA”) file a Motion for Relief from the Stay seeking both relief from the stay and attorney’s fees. The Debtor admitted the default, but contested the attorneys’ fees as being unnecessary.

Relying on In re Jones, 339 B.R. 360, 365 (Bankr. E.D.N.C. 2006), the court held that the property had re-vested with the debtor at confirmation and no relief from stay was necessary for post-petition assessments, See In re Schechter, 2012 Bankr.… Read More

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N.C. S.Ct.: In re Johnson- Homeowner Association Assessments must be Uniform and Pro Rata

Summary:

The Starboard Association administers a condominium consisting of 33 separate buildings. Its by-laws authorized assessments against members to pay costs, providing that “ [a]ll assessments levied against the Unit Owners and their Condominium Units shall be uniform” and “shall bear the same ratio to the total assessment made against all Unit Owners and their Condominium Units as the undivided interest in Common Property appurtenant to each Condominium.”

In October 2005, the Association approved renovations to all of the building, except Building 33, assessing the costs against all owners, except owners of Building 33. Subsequently, in November 2007, the Association renovated Building 33, assessing those costs only to the owners of Building 33.… Read More

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Bankr. E.D.N.C.: In re McClam- Consent Order In Prior Case is Not Res Judicata in Subsequent Bankruptcy

Summary:

In the Debtor’s first Chapter 13 case, the Debtor and his homeowner’s association entered into a consent order denying the homeowner’s motion for relief, subject to the Debtor complying with specific conditions. Failure to comply would result in the lifting of the automatic stay. The Debtor’s bankruptcy was shortly thereafter dismissed and the Debtor refiled. The homeowner’s association contended that the consent order in the previous case was res judicata and it was thereby entitled to relief from the automatic stay in the second case. The bankruptcy court, however, found that the consent order in the previous case was not a final adjudication in the present case, as “[t]he property of the estate and automatic stay in this case are distinct from the debtor’s previous case and not merely a revival of the prior proceedings.”

For a copy of the opinion, please see:

McClam- Consent Order In Prior Case is Not Res Judicata in Subsequent Bankruptcy.pdf Read More

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