Relates to notice to be provided prior to a foreclosure action by a homeowners' association

• Democratic1

◆ The sponsor's argument

Why Brian Kavanagh says this is needed

According to the United States Census Bureau, roughly 84% of newly built, single-family homes sold in 2022 belonged to homeowners' associ- ations. These associations can promote unity within a community. Howev- er, they can issue fines, assessments, common charges, and fees for various areas, pursuant to that associations' by-laws. If these go unpaid, a homeowners' association may decide to put a lien on the prop- erty. If enough time has passed with these charges going unpaid, a home- owners' association may decide to commence a foreclosure proceeding on the property. Currently, homeowners' associations are not statutorily required to give notice of the commencement of a foreclosure proceeding. For context, when dealing with a mortgage foreclosure proceeding, mortgage lenders are statutorily required to give ninety days' notice prior to the commencement of one (RPA § 1304). To the homeowners' surprise, they may suddenly lose their home or get paid out considerably below market value due to the HOA's foreclosure auction. A common misconception is resi- dents can sometimes think even though they are up to date on their mort- gage payments, they cannot be foreclosed on, but they can. Owning a home is a great achievement in our society. It should not be risked due to unpaid fines that a homeowner may not have known about or may not have been able to tend to right away (potentially because of loss of employment, physical injury, etc.). By requiring homeowners' associations to give notice of foreclosure proceedings to residents pursuant to a lien for unpaid charges, it allows for additional due process for the resident, as well as notification of the charges and the amount owed.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.