Threat of Eviction Following an HOA Foreclosure
Henry sent the required redemption notices following the HOA foreclosure. In addition, he sent a letter expressing his desire to lease the house to the prior homeowners. Days go by with no response. Henry attempted to contact the lender, but they refused to provide him any information, and he had no way of paying the mortgage on the home he just bought.
On the twenty-eight day of the month, he decided to tell Ginny of that they may have to make two mortgage payments without receiving any rent. “What do you mean?” she inquired. Henry explained that he did not want the new house to fall behind on mortgage payments. “So the homeowners get to live rent-free?” Ginny continued her inquisition. “They cannot stay in that house rent-free while we pay their mortgage!” she exclaimed. Henry agreed, but he did not know what else to do. “It’s our house,” she angrily remarked, “They don’t even have a lease. Just call the police and kick them out! Then we’ll sell the house or find new tenants.”
Henry closed his eyes tightly in the dark bedroom. Regretfully, he replied, “We can’t sell the house.”
He heard Ginny sit up in bed. He could not see her, but he could feel the expression on her face. “What do you mean?” she asked in a tone that was a mixture of anger and grave concern.
“There’s a law,” Henry explained, “that says we can’t sell the house for 180 days.”
“What?” Ginny screamed. “Why?”
Henry hushed her, reminding her that the kids were asleep. “Because they have the right to buy the house back for us during that 180-days.”
Ginny was unsure how to receive this information. Was it good or bad? Was it a negotiation process that allowed the buyer and the homeowner to settle on a purchase price? She asked, “So we can make them an offer to buy back the house?”
“Not really,” Henry started as his voice showed signs of weakness, “they can essentially buy it back for what we bought it.”
Henry heard Ginny sniffle and shift in the sheets. “How much is the other mortgage?” Henry conceded that he did not know, and that the lender would provide him no information. “How do we know how much to pay?” Henry stated that he would overestimate after accounting for taxes.
Henry returned home the following evening after work and entered the study. He made his mortgage payment online. He then wrote a check to the lender for the mortgage of the second house. He guessed that he was paying about $200 over the actual amount. He checked his bank account. This is the only month that he would be able to make the two mortgage payments without dipping into his retirement account.
Henry decided to drive by the house the following evening and knock on the door. A man answered. He looked reasonably nice and well-dressed. He was not any bigger than Henry, and he certainly did not look scary. It was awkward, but Henry’s fear of a physical altercation subsided. “I’m Henry. I bought this house recently at an auction, and I just wanted to make sure that you’ve been receiving my letters.”
The man exited the house and shut the door behind him. “I’m John,” he said as he held out his hand. Henry accepted the salutation and met John’s hand. “I have been receiving them,” John admitted. “We’re trying to take care of it.”
“If you need to, then you can lease the house from us,” Henry offered. “Does $3,000 per month work for you?”
“I’m sorry. We’re not able to pay that right now. I lost my job, and my new job doesn’t pay as much. My wife is looking to go back to work, too.”
Henry figured there would be a story. “Well I just paid the mortgage for this month. You can’t stay here for free. My wife and I really prefer to lease the house to you instead of the alternative.” Henry was unsure of the threat. He knew that he could not sell the property within 180-days, but perhaps he could find a tenant during the interim time period.
John seemed unmoved by the threat. “We have six months to redeem the property. So I don’t think you can do anything.”
“I can file a forcible entry and detainer suit with the Denton County Justice Court tomorrow if I wanted,” Henry countered as he tried to temper his threat. “But I don’t want to.”
John did not know what a forcible entry and detainer suit was, but it did not sound good. “What is that?” he asked.
Henry responded as though he felt bad for even uttering the words, “It’s an eviction.”
John’s wife, Anne, then met them on the front porch. “Is everything okay?” she asked.
“Yes,” John replied. John wanted to ask her to return inside the house, but he feared that she would become suspicious or nervous. Instead, he hoped that Henry would do the honorable thing by saying his goodbyes and continuing the discussion later.
Henry did not want an altercation. He also did not want to emasculate John in front of his wife. He recognized John’s uneasiness, and stated, “You have my number. Feel free to call me tonight.” And then Henry left.I am Robert Newton of The Law Office of Robert Newton, P.C., and I am the author of this series entitled The Impact of Law, in addition to being a real estate, business, and estate planning attorney in Frisco, Texas. While the characters and the circumstances are fictional, they represent a very realistic scenario. If you are prosecuting or defending a foreclosure by a homeowner association, please contact an attorney. None of the information contained within the story represent legal advice. Actually, in many cases, it would be very bad legal advice. So, seek the advice of an attorney. And, stay tuned for the next chapter.