TN bill would pass foreclosure fees to neighborhoods - WSMV Channel 4

TN bill would pass foreclosure fees to neighborhoods

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NASHVILLE, TN (WSMV) -

Foreclosures have always been an ugly, heartbreaking business. But now, instead of just feeling sorry for people who have lost their homes, Tennesseans might soon be paying money for someone else's foreclosure.

More than 1 million people in the state live in homeowners' associations, and the law says that for a house that has been foreclosed, any homeowner dues were paid for by the county or city that seized the property.

Now, a newly proposed bill would make Tennessee the first state in the country to give that bill to you and your neighbors instead.

A foreclosed home symbolizes broken dreams and financial nightmares from which it can be hard to recover. But state lawmakers are considering a bill that hands those foreclosure charges to the rest of the homeowners' association instead of the municipality.

"What it does is increase the cost to the homeowner," said certified property manager Scott Ghertner. "Ultimately, this bill allows municipalities to take a property within a condominium development or a homeowners' association and simply not have to pay HOA dues. So, ultimately, the cost for lighting and insurance, keeping up the property and cutting the grass."

About 1.2 million Tennesseans live in homeowners' associations or condo associations, and if say 10 or 12 properties fail in a single HOA - which has happened - it could mean a monthly rate hike that could break a neighborhood.

"I don't think any homeowner is prepared to take on the fees and assessments of other people just because the cities and counties have taken over the properties. It just doesn't make sense," said Murfreesboro homeowner Steve Richardson.

The bill would benefit cities and municipalities, as well as the powerful Tennessee Municipal League lobby.

Neither the authors of the proposed legislation - State Rep. Judd Matheny, R-Tullahoma, and State Sen. Randy McNally, R-Oak Ridge - nor the Tennessee Municipal League returned calls for comment.

For now, the bill has been moved to the end of legislative session.

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