In the USA, can you lose your home even after it is 100% paid off?
In the USA, can you lose your home even after it is 100% paid off?
Let’s say that you buy a home in cash and have 100% paid off. Could you still lose it somehow?
129 comments
-
-
(they have way too much power)
I've heard a lot of horror stories about HOAs and I'm certain there are a statistically significant number of bad eggs.
However, that's definitely not all of them, and in fairness to the HOAs that actually do shit (like mine): maintaining communal property costs money, running communal utilities like heating and cooling costs money, paying groundskeepers costs money, insurance and lawyers and regulatory compliance costs money, etc.
If someone isn't paying those fees, everyone else's costs go up and that isn't fair to the rest of the community. It's usually a lot of (expensive) legal work to confiscate a domicile, so it's not the first solution a collection of middle-class homeowners reaches for.
-
It's good you have a good one, but the big issue with them is they have almost no oversight at all. They almost function as little privately owned fiefdoms with extremely broad powers over anyone under them. Yours might be good now, but there have been plenty of examples of a good HOA being bought by a corporation and then becoming tyrannical almost overnight. There's a whole industry of HOA management companies out there, and they are bad news. The last time I saw the statistic something like 80% of new construction in the US is managed by an HOA, too.
Don't get me wrong, when they work right they serve a purpose, but the lack of laws and oversight of them is pretty scary when you look into it.
-
-
My property tax is $1200 a year. Failure to pay that for a while (a year or three) could result in the state selling the house, keeping the overdue taxes, and paying me the rest (if there is any. Sometimes they get sold cheap).
The state can also buy my house from me under eminent domain, to put in a rail line, or power lines, or some other utility. They'd owe me "fair value" for it, but they basically determine what that means, and it could be significantly less than what i could sell it in the market for (but to be fair, taxes are based on "fair value", and almost everyone quietly allows the state to low-ball their property value because of this).
It can also be condemned. If it's egregiously not maintained and shows obvious signs of structural issues, or the property gets hoarded up and looks like a trash dump. This is much more common with commercial property.
There's also civil asset forfeiture. If you're manufacturing and/or selling drugs/weapons/etc. (as a random example. Any crime counts really) on a property, it can be seized outright with no requisite compensation at all.
HOAs ar often described as similar to asset forfeiture, but they're closer to a tax siezure. The HOA has to have in its charter that they can fine members for rule violations, and the process for an HOA is the same as for overdue taxes, but with unpaid fines. The authority for HOA is entirely contractual, you have to sign a contract agreeing to those rules.
All of these are incredibly rare occurrences, and usually involve some sort of genesis, like an investor wants a specific property, neighbors hate someone, etc.
-
Back in the neighborhood I grew up in, we actually had a drug house that was taken by civil asset forfeiture. They had an RV/trailer (IDK which it was) in their driveway that people would go into for drug related shit and at one point a vehicle was set on fire in the middle of the night, probably to destroy the evidence it was stolen. I'm glad the drug selling scum were taken care of, especially since there were kids on the block.
-
There are two kinds of asset forfeiture: civil and criminal. Criminal would be what you describe, if you are convicted they can seize any property involved in the crime. Civil asset forfeiture is something else, and it often abused to take things where the crime is only suspected. (It was originally supposed to be used to take property involved in a crime, such as an empty pirate ship, where the owner is not known.)
-
-
Yes. It happened to my friends. They both lost their jobs and couldn't pay the property tax on their fully paid-off house, so it was foreclosed and auctioned off.
-
There's also eminent domain and HOA's
Eminent domain has been used a lot in the past to target minority groups.
-
How much is the property tax?
-
This is Texas which has no income tax, so they have high property tax. It's about 1% per annum based on the appraised value of the property. Plus if it's a newer neighborhood, you pay an extra amount for the cost of infrastructure until it's paid off, usually called a MUD (municipal utility district) tax. Mine is an extra 1.2% so I'm paying roughly $1200/month in property taxes for my residence.
-
Depends on where you live. Here in Washington state we don't have an income tax, so our property taxes are one of the few ways the government has to collect taxes. For that reason our property taxes are much higher than states that have multiple ways to collect.
-
The property tax is based on the assessed value of the property. (Which can change over time, even if you bought it years ago.) And the tax ranges from 0.28% in Hawaii up to 2.49% in New Jersey. Most states are around 1%. There may also be local taxes from a county or city, which is typically a small fraction of the above.
-
-
-
One thing to keep in mind is that in the US, there's very few people or companies that actually own the land that they're on. Most of the time you have the rights to use the land for certain types of things, but not actually own it. The US government (federal on down) has various ways of seizing property for its own purposes.
There's only a handful of people who actually own the land they live on. Most of them were granted the land by prior governments (mostly Spain) before the US was a country. Their ownership was grandfathered in and has passed via inheritance through the families. Several of those family plots are in Texas and Florida. Everyone else is just allowed to stay as long as they play ball with the rules.
-
Do you have more info on those that actually own? Sounds interesting.
-
Eminent Domain, I think it's called. I know around the DC area, a lot of people lost houses, businesses, and properties to make way for more highways in the last 50 years.
-
This sounds dubious. Sources?
-
-
You can get eminent domain'd or your house could be destroyed by natural disaster, house fire, etc.
-
In theory, in the case of eminent domain you get the value of your home paid. In practice... its often not enough to actually buy a similar house.
-
You get a government set rate for the house, not what it could sell for on the open market.
-
-
-
Theoretically eminent domain still exists but it’s only used to replace black neighborhoods with highways
-
Not true! It's also used to seize property from existing owners in order to hand it off to private developers (see Kelo v. New London).
-
But when we want passenger rail we have to buy the land at full price as set by the landowner no matter how much they’re gouging
-
-
That's not so much losing your home as it is having it forcibly purchased from you at a fair market price. At least in theory.
-
-
Yep, you only think you own your home after it's paid off. Try missing a single property tax.
-
Yes.
-
Absolutely. You have to pay taxes on your property (in most states; there may be exceptions that I'm not aware of). If you don't pay your taxes for a long enough period of time, your property will be seized and auctioned off. Starting bids on property auctions are usually the back taxes; in less desirable areas--such as undeveloped land that with no utilities that's out in the middle of nowhere--that may be all it costs.
-
-
-
ooh I didn't know that! someone without insurance rear-ended my vehicle but I chose not to pursue it because then my own insurance rates would've gone up. But heck I didn't know I could have gotten a house out of it 😄 okay but judging by the state of that guy, I doubt he had a very glamorous living situation.
-
If you’re injured, or have a lawyer and doctor say you were, yeah… you don’t literally get their house but they might have to sell it to pay you. More often, their insurance company would pay.
-
You probably wouldnt have gotten the house. Rather he'd have to sell it to pay the debt.
-
someone without insurance rear-ended my vehicle but I chose not to pursue it because then my own insurance rates would've gone up.
Somehow, this sounds deeply wrong. Your insurance should cover you regardless of what happens. If it’s an act of god, the insurance company should just swallow those costs. If it’s caused by a third party who is not their customer, they should go after the company that insured the other party, or the other party directly if uninsured.
No matter what the circumstances, if you are not at fault you should never see an increase in your rates, no matter how catastrophic the damage or the costs to make it right.
-
-
This was the whole premise of Happy Gilmore. He became a pro golfer to save his grandma's house
-
If you fall behind on your property taxes, the local taxing authority can foreclosure on the property.
-
A common way that I don't see mentioned here is that it is common to take out a loan using your home as collateral, something like a major business loan not panning out or a mismanaged personal loan can absolutely end up letting the bank seize your house to pay off the loan.
-
Eminent domain baybee
Oh, also if you're under investigation for anything, the cops can just confiscate your house, car, possessions, whatever. Even if you're found not guilty, you don't get anything they took back. Typically it will get sold at a discount, typically to a cop. You'll often see them on twitter taking pictures with their fancy new car that they dragged someone out of a month ago. It's called asset forfeiture, and iirc It's the second or third most prevalent from of theft in America, wage theft being the first.
-
You can be shot by the cops, in your bed, while asleep. Yes I think you can lose your paid-off house.
-
There are typically property taxes you have to pay every year, unless exempt
-
Yes, if a large meteor landed on it, it would probably be destroyed.
-
I sell meteor insurance btw. DM me.
-
Let's not forget sink holes. :-D
-
-
I feel like you had additional context to this question that you meant to add, but just totally forgot.
As it stands, yes of course. If your house in condemned or otherwise subject to eminent domain, if your house is seized to pay creditors for non-mortgage debt (in some states), if somebody else has superior title to your home and you aren’t protected by being a bonafide purchaser, etc.
-
Natural disasters and other "acts of god" are becoming more relevant - especially as some states, like Florida, have more insurance companies pulling out. Flood insurance is often unaffordable too.
-
Which really highlights how stupid and funny the "act of god" line is
So has he just randomly decided recently that he wants to spend more time fucking up people's houses or is it maybe that it wasn't just collateral damage of some benevolent beings plans and maybe there's a a more concrete basis for why these weather events occur.
-
asdf
-
Flood insurance is 100% unaffordable. Even insurance companies are subsidized by the government for flood.
-
It is happening in California too because of all of the wild fires mostly.
-
-
I used to see stories in the legaladvice subreddit regularly about Housing Owner Associations putting legitimate liens on properties for not following the rules. Even when the rules were as ridiculous as "air-conditioning unit can't be visible from the street" or "only these specific plants can be grown and your lawn cannot exceed a few inches in height and must always be green" or "internal curtains must be pink or white".
For a culture that prides itself on its freedoms, the miniature authoritarian regimes that HOAs embody are a great example of the evidence not matching the story.
-
Amen.. never buy a house in a HOA if you plan to actually keep and payoff said house. Even if its a "good one", they can and do change. All it takes is a vote for your $50/mo HOA to become $1000+/mo because they want to build a golf course or do custom street signs and a pool or whatever.
-
HOAs started as a way to keep neighborhoods white only. Now it's a way for developers to have a super majority vote to keep giving themselves contracts and a way for control freaks to control their neighbors. They started as bad actors and now some are bad actors for other reasons.
Not all HOAs are terrible but there aren't a lot of actual accountability in-spite of some laws to stop corruption and there's not a ton of benefits for most except perhaps for condos.
For example, I wouldn't mind having an HOA that contracts rates for trash, lawn care, creates and maintains a park with some stuff for kids, maintains beautification of non-homeowner areas and maybe even has security patrols. You know, actual amenities to keep the neighborhood nice and convenient for the home owners. Not an HOA that makes sure that shampoo bottles in people's bathroom windows aren't visible, front doors have to match some aesthetic or have to approve decks and sheds for people's yards.
-
I rent in a medium-high-density non-US housing complex. It's obviously necessary after you live like this for a few years that there needs to be an organisational body to deal with building and land issues, especially when there are hundreds of people who occupy a shared structure that needs to be maintained and repaired. For example, if the water goes out for me, it could also be out for hundreds of other people, which makes it a more expensive and higher stakes problem than a single detached house with one family, and more than one person will need to make the decision on how it is repaired and by whom.
Local governing bodies are not necessarily based in racism or hyper-control motives either, even if American (and other country) housing organisations regularly use it for those purposes even today. These organisations are borne from the complex needs of living in a peaceful community of different people with different desires and needs.
But experience has also told me that this works better when the overarching legal systems are more accessible and corruption-resistant. The biggest problem is that it is very difficult to evaluate what patch of land (or walls and floor) has the best longitude and latitude to provide a decent probability of not being exploited for someone else's gain or suffering from someone else's bad decisions. It's a constant global issue, and the consistent theme is that most places favour the wealthiest human in housing or other legal disputes.
-
america is a sick joke
-
-
-
Holy fuck lmao
-
dude... that's dark. haha
-
-
Every country pretty much. Lawsuit. Don't pay taxes. Owe money to someone personally. You don't get to hide your assets behind a home and get into financial trouble in other areas.
This is also why homeowners typically live within the law. Too much to loose.
-
Sure. If your HOA does not like you, they will use your own money to pay lawyers against you, to dispossess you of your house. 'Murica!
-
This is America, what do you think?
-
Setting aside all the legal reason people have outlined its important to rmeber this is America.
If a rich enough person wants you dead they'll shoot you in the head on the front porch of your home in broad daylight in front of your neighbors and then the cops will say no crime happened and the news will say that person always lived there.
Rich people can and do act however they want without consequences and our entire judicial system is just set up as a smokescreen to point to to tell poor people that isn't the case.
-
Ahh, hexbear, never change.
-
Ahh, hexb— MMPHMMMP MMMMPHHMP MMM!
I'm sorry, what? You need to take that boot out of your mouth if you want folks to understand you.
-
-
-
You own nothing and you'll be happy
-
TIL, property tax is a thing.
-
-
Don't buy a house in a HOA.
You're going to pay taxes no matter what, sorry to break that to you. Kinda surprised you didn't know that if you were going to pay cash for land.Edit. Lol guy blocked me for that? Lame
-
I don't know how it is everywhere, but in multiple areas I've lived, you can't just build your own house anymore. You either go outside of city limits and pay to get utilities out there, pull permits, the whole nine, or you buy a premade piece of crap cookie cutter house in the city, which usually comes with some form of HOA. Unless you got big bucks, most people simply can't afford a house outside of an HOA of some kind anymore.
-
-
129 comments