San Antonio HOA Moves to Foreclose on 84 Homes

In a rare move, a South Side homeowners association has filed to foreclose on 84 homes in the Mission Creek community because of unpaid association dues.

That’s 21 percent of the roughly 400 homes in the community, based on data from RexReport.com. The 84 are set to go on the auction block April 7 at the Bexar County Courthouse — an event that would devastate the neighborhood’s property values, experts say.

Judith Gray, an attorney hired as the auction trustee, said the association is foreclosing because many homeowners have not paid dues for several years, and the multiyear loss of those dues is making it difficult for the association to function and to provide services required by the city.

“We’ve got a lot of stubborn people who believe they do not have to pay homeowners dues,” Gray said. “They have on average not paid homeowners dues for two to three years.”

Partly at issue is a community park that one of Mission Creek’s builders, Sivage Homes, and homeowners say the association has been promising to develop for several years. Currently, the park site comprises grass and trees.

Also fueling anger, homeowners claim, is the lack of response from the association when they call for an update on the project or any other issue in the neighborhood. Letters and phone calls go unanswered.

Neither developer Harry Hausman of HLM Development nor association board members responded to multiple voice messages left by the San Antonio Express-News.

Homeowners such as Cynthia Carrillo say they have deliberately stopped paying their $130 in yearly dues in response to being ignored.

“They are maintaining the front area where they sell those homes, but aren’t doing anything else,” Carrillo said. “If they are going to get $130 from all these people, they need to return people’s calls and put in more than those flower beds.”

The association’s attorney says it’s the nonpayment that’s preventing the association from following through on promised projects.

“If we don’t do this (collect the fees), the homeowners association cannot survive to do what homeowners want and have the park taken care of, have lights on in the park and cut the grass,” Gray said.

Most communities have covenants that give a homeowners association the right to sue property owners, assess penalty fees and even foreclose if dues aren’t paid.

The association usually must issue written notices asking a homeowner to pay and then file a lawsuit before starting foreclosure proceedings.

Cities encourage homeowners associations as a way to maintain housing and community standards to preserve home values — the source of property taxes — with minimal city involvement.

But if the 84 homes are auctioned, it could severely undermine home values in Mission Creek, one real estate expert said.

“That would be a spectacular event, and I can’t think of how it would be positive for the community,” said Al Kiris, agent and general partner at Bradfield Properties. “That’s unusual.”

Studies back this up. One conducted by the University of Missouri at St. Louis found that homes within a mile of a foreclosure typically see a hit in value.

For instance, between 2000 and 2008, homes nearest a foreclosed property lost an average 1 percent of their value. Between January 2006 and September 2008, when the market was more sluggish, homes nearest a foreclosure lost up to 5 percent in value.

Some of the homeowners facing foreclosure say their nonpayment is not from protest against the association, but a simple misunderstanding.

Adam Chavarria says his unpaid dues were the result of poor communication from the association as to his payment due date.

Chavarria, who bought his home in July 2004, said the association had sent a bill and coupon book in previous years to help in payments, but not last year.

“I didn’t have a problem paying,” he said.

Chavarria says his next personalized written communication from the association was a “formal notice” of default telling him to pay $267.58, including $100 in legal fees, or have his home auctioned off between 1 p.m. and 4 p.m. April 7.

“That was kind of a shock. For a couple hundred dollars, I thought that was a bit much,” Chavarria said.

Still, he said, he paid the fees.

As of Friday, the showdown between Carrillo and the association continued. Carrillo was adamant she wouldn’t pay the nearly $700 in fees she was assessed until an association representative speaks with her.

“I’m willing to come to a compromise,” she said. “But I should not have to pay fees and penalties and all that. They are not doing anything for the community.”

She hopes someone from the association will call her back and give a place where she can go and pay in person, rather than send something in the mail.

By Aïssatou Sidimé - Express-News