The Urban County Council has no authority over the state's foreclosure laws and can do little to help a woman whose house was sold in a master commissioner's sale after she failed to pay her $48 annual homeowners fee for more than six years.
Janet Graham, commissioner of the Department of Law, told a committee of the Urban County Council on Tuesday that all foreclosure matters are controlled by state statutes. Any changes in the foreclosure law would have to originate in the state legislature. Graham's comments came during the Urban County Council's Planning and Public Works Committee.
Urban County Councilman Bill Farmer Jr., chairman of the planning and public works committee, said he would work with Councilwoman Shevawn Akers to determine whether the council should recommend to the legislature some tweaks to either foreclosure or homeowner association statutes for the legislative session that begins in January 2015.
Several residents in the Masterson Station neighborhood asked Tuesday for the council to try to beef up the notification process for foreclosure.
"I just hope that nobody in the future loses their home over something like this," said Martha Briem, who lives in Masterson Station. "Just because it's legal doesn't make it right."
Akers requested that the council further explore the foreclosure laws after Ingrid Boak's house was sold at a master commissioner's sale last year.
Boak acknowledged that she didn't open letters or respond to attempts to reach her by the homeowners association over several years. She said no one served her notice in person or received a signature from her acknowledging that she knew that her house would be sold.
Boak said she paid $125,000 cash in 2007 for her house on Winding Oak Trail, and her taxes were paid on time. No one told her when she bought the house that paying the $48 annual dues was mandatory, she said.
Boak, a horse trainer who lives out of town much of the time, said she never opened her mail from the neighborhood association.
Attorneys for the homeowners association say Boak was sent 14 notices before the lawsuit was filed and 10 notices after the lawsuit was filed. In total, she was sent more than 30 notices before her house was sold by the master commissioner, said Nathan Billings, a lawyer for the Masterson Station HOA. After the house was sold, Boak rented the house from the current owner but has since moved out. Boak said she didn't appeal the sale of the house because she didn't want to pay the legal fees.
During Tuesday's meeting, council members questioned whether homeowners are told that they are part of a mandatory homeowner association at the time they buy their homes. There are more than 300 homeowner associations in Lexington. Most homeowner associations are in new developments, Akers said.
Councilwoman Jennifer Mossotti, a real estate agent, said that at the time of sale, owners are told whether the house is in a homeowner association and whether there are dues.
Briem, however, said she was not told when she bought her house that she was part of a homeowners association. She moved to Lexington from a small town in Ohio where there aren't homeowner associations.
Many members of the Urban County Council said they were skeptical whether there needs to be changes to the law. Others said Boak's case is an isolated incident.
Councilman Harry Clarke, the former president of a voluntary neighborhood association, said he thinks something should be done. Real estate agents call him to see whether there are any past-due HOA payments on homes for sale in his neighborhood. Clarke said the agents don't know that it's not a homeowners association.
"There's some disconnect here," Clarke said.
Akers said she isn't advocating for homeowner associations to be banned, and she thinks homeowners should have to pay their dues.
"I just want to figure out what we can do to facilitate better relationships between homeowners and HOAs," Akers said.