Home crisis hampers HOAs

Homeowners' associations got lost somewhere in the shuffle of the home mortgage lending crisis.

No one knows that better than Deby Wine, the president of the Brandy Station Homeowners Association.

The Manassas Park HOA has become a revenue graveyard where many residents pay their quarterly association dues late or don't pay at all, said Wine.

Much of this can be attributed to the spate of foreclosures and abandonments in the town home community. When residents pack up and leave, there aren't too many options the HOA has in recouping the money it already spent to maintain and sometimes improve the neighborhood.

"A house can go through three changes of hands in a three- or four-month period," Wine said. "Meanwhile we're just sending delinquency notices."

To make matters worse, the HOA has been unable to change an obscure section of the covenant that requires homeowners to pay only 25 percent of legal fees associated with not paying their dues.

And HOA rules stipulate that to change the covenant, it needs 75 percent or approximately 103 affirmative votes out of the 137 households. The votes also must be from residents in good standing with the HOA. So far, they have less than 90, said Wine.

"Most that are delinquent aren't off by 20 or 100 dollars," Wine said. "Many of them are off by $5,000, $1,000, or $3,000."

As of August, the HOA was owed more than $14,000 in back dues from roughly 50 residents. In August of 2007, homeowners owed the HOA close to $13,000, a sign that most people don't pay off their dues in one lump sum, said Wine.

On Tuesday morning, Wine picked up trash in the parking lot near her town home, where she has lived in since 1986, when the neighborhood was built. It's a daily routine for her and luckily she has a job flexible enough for her to do so.

Wine has also been spending time establishing towing zones where there were once parking spaces. One of the few recourses HOAs have is to take away parking privileges if dues aren't promptly paid.

The parking situation and overall atmosphere are not likely to improve at Brandy Station and many other neighborhoods in the area any time soon. Many jurisdictions in Northern Virginia and around the nation are bracing for tough budget seasons due to the real estate market collapse.

There were 216 foreclosures in Manassas Park in the first six months of the year and 85 percent of the city's real estate transactions during the same time period were either pre-foreclosures, or "short sales," or post foreclosures.

At the adjacent Stonewall II community, the foreclosure issue isn't quite as bad, said HOA president Donald Shuemaker. However, delinquent fees have spiked at least 50 percent in the 72-unit town home community. With less revenue, capital projects like paving the HOA's two streets are not a possibility in the near future, said Shuemaker.

A U.S. Postal Service employee, Shuemaker has served as the HOA president for six years and lived in Manassas Park for 29 years. He said the foreclosure issue is a sad one, calling parts of nearby neighborhoods "ghost towns."

The house two doors down from Shuemaker burned down several years ago and the last buyer purchased it at the top of the bubble at around $310,000.

Now that house is vacant and just across the street from Wine's town home are seven more vacancies—a microcosm of the real estate world these days.

"It's sad for me to see that," Shuemaker said. "The whole area [around me] is not how I remember it."

Staff writer Kipp Hanley can be reached at 703-369-5738.