Home Lost Over Unpaid $120 Bill

When retirees Tom and Anita Radcliff moved into the modest rural home their sons built, they never imagined the price of joining a neighborhood governed by a homeowner association.

Now, months after moving in, they have lost their home to a buyer of foreclosed properties and were ordered off the property over what started as $120 in unpaid association dues. The homeowner association turned the bill over to a collection agency and auctioned the house within six months.

With 1 in 6 Americans living under the private rules of 260,000 homeowner associations, such foreclosures by an aggressive and some say predatory collection industry are becoming common. In the last three years, homeowners in Las Vegas, San Diego, St. Petersburg, Fla., and Houston have lost homes over sums as small as $81.

Such draconian foreclosures are legal in homeowner associations that now rule over most of the nation’s new housing.

“It’s a last resort, but sometimes it becomes necessary,” said Frank Rathbun, spokesman for the Virginia-based Community Assns. Institute, which advises homeowner associations.

The Radcliffs received a bill last year for $120, which covers annual costs of keeping up a country subdivision in the foothills of Calaveras County. They didn’t pay it quickly, claiming sickness and distraction, then saying they didn’t see most of the late notices and warnings of increasing danger.

Deadlines passed and the bill swelled with fees from the collection agency, eventually reaching $1,952. (The Radcliffs also owe the Internal Revenue Service more than $5,000 in back taxes.)

“They both got sick. They just weren’t paying attention. They needed someone to come and tell them this was going on,” said son Tom Radcliff. “Even though my parents may have been in the wrong, or didn’t know, this is legalized burglary.”

Yvette Villeneuve-Ezell, president of the Copper Cove at Lake Tulloch Owners Assn., steered inquiries to Michael Woodbury, the association’s Sacramento attorney, who said the association followed all laws.

“The record shows the owners received all the notices they were required to receive by law,” said Woodbury, who advises hundreds of California’s 36,000 homeowner associations.

Legal or not, what happened to the Radcliffs is “morally wrong” and “should never happen again,” said state Sen. Rico Oller, a Republican from nearby San Andreas. Oller is introducing a bill to ban homeowner associations from selling members’ homes unless an owner owes the association more than $50,000.

As high-profile foreclosures have mounted, legislatures in Florida, Texas, California, Arizona and Nevada have held hearings on such measures. But all have bowed to lobbyists’ objections.

Florida, Illinois and other states require a judge’s review before a house is auctioned.

The Radcliff home now belongs to Robert Vardanega, an Alameda businessman who has bought dozens of foreclosed properties in Northern California and Nevada. In December, he bid $70,000 for the three-acre property appraised at $285,000.

Vardanega, reached by telephone, said, “I couldn’t discuss it. We’re in a legal dispute with the property.”

In other high-profile foreclosures, homeowners have won back their homes after hiring lawyers and winning public sympathy. Sonora attorney Michael Macomber said he was hopeful the Radcliffs would too.

Macomber said Anita Radcliff delivered a $156 check to the association office in June, within the required 30-day notice of delinquency. He said the association mailed it to collection agency Coast Assessment of Garden Grove, which returned it, saying the amount fell short of new late fees.

“The payment made was $1.50 less than the invoice presented,” Macomber said.

At Coast Assessment, Senior Vice President Don Morger defended the agency’s actions. He cited at least 10 notices by mail, in newspaper legal advertisements and property postings before auctioneers moved in.

Morger said the Radcliffs are entitled to $68,000 from the sale of their property. But the family said they must first sign documents promising not to sue. So they’re waiting.