In The News

Ousted Resident a Step Closer to Home

August 29, 1995

By: Clark Mason Press Democrat Staff Writer

Patrick Mahaffay, a Sea Ranch homeowner who lost his $300,000 home because he was $567 behind in his homeowner association dues, is a little closer to getting his house back.

A Sonoma County Superior Court judge tentatively ruled Monday that the company that bought Mahaffay's home for only $2,403 failed to prove it was a legitimate acquisition.

The decision by Judge Lloyd Von der Mehden, which will not be final until next month, clears the way for a jury to ultimately decide the issue in a lawsuit brought by Mahaffay against The Sea Ranch and Real Estate Recovery Inc., the company that bought his home.

Real Estate Recovery had filed a motion asking the judge to rule the purchase was bonafide, in essence dismissing the merits of Mahaffay's suit.

Michael G. Miller, Mahaffay's attorney, called the judge's tentative ruling "a very big victory, even though it's not conclusive."

"Had we lost, he (Mahaffay) would have had to vacate the house. Title would have been lost forever," Miller said.

Mahaffay, a 45-year-old carpenter, owned the house free and clear but fell seven months behind in his homeowner association dues in 1993 during a period when work was scarce. He claims he never got the numerous notices mailed to him warning that his home was about to be foreclosed on and would be auctioned off if he didn't pay up.

His house was bought by Real Estate Recovery, a partnership owned by Bob Dixon and Cathy Liner. Dixon was the only one to show up and bid on the property when it went on the auction block at the Sonoma County Administration Center last year.

The $2,403 his partnership paid for the house represented back dues, plus interest, collection and foreclosure costs on Mahaffay's property.

Miller argued that for Real Estate Recovery to buy Mahaffay's home for such a low price should have put the buyer on notice that something was wrong.

Barry Parkinson, the Petaluma attorney representing Real Estate Recovery, argued numerous court decisions have found "low price alone is not the basis for setting aside foreclosure."

The judge's ruling leaves it up to a jury to decide.

Mahaffay still could get his house back in his name without a trial. The Sea Ranch, in a move that Mahaffay's attorney says is "extremely ironic," has been negotiating to buy the home from Real Estate Recovery and give it back to Mahaffay.

The Sea Ranch's insurer has made an offer in the $40,000 range to buy back the house, according to Parkinson. And he confirmed Monday that Real Estate Recovery is seeking at least $75,000.

Real Estate Recovery also has sued The Sea Ranch, claiming the association mishandled the sale of Mahaffay's property, which Real Estate Recovery bid on in ``good faith.''

Mahaffay's case has helped spark pending legislation to change the law that allowed The Sea Ranch to foreclose on his property and sell his home without a court hearing to collect back dues.

Assemblywoman Jackie Speier, D-San Mateo, is sponsoring legislation that would among other things require homeowner associations to try and notify in person property owners who are about to have their property sold in a non-judicial hearing such as occurred with Mahaffay.

That legislation passed the Assembly on a 72-1 vote. It now goes to the state Senate.