Dues not paid up before property is sold

It is hard to collect dues before a property is sold if money is owed. You do have some options if you stay pro-active as the treasurer. First, you are barking up the WRONG tree when your looking who is responsible for making sure that form is filled out. It is NOT the Attorney's or Real Estate Agent responsibility. The responsibility is mostly on the Seller/HOA. The buyer is the one with the most legal recourse. (HOA in some cases too). The mortgage/home lending company may bear the brunt of not having the form on hand at closing.
Your best resources for gathering information is to read the for sale signs on the property. Make sure if the property owes money, you know what Realtor, Real Estate company, Mortgage company, and true owner is for each sale for your best chance. You can call the Tax Assessor's office if you have the LOT number for the true ownership of the property.
The most important part of this puzzle is that NOTICES are sent promptly and often if money is owed by ANY owner. Make sure it goes to the right address. The one on the door is good but if the owner doesn't live there try to find their "real address" as well but send to BOTH addresses.
If you have records you notified the owner they owed money, your chances improve that you can have legal recourse to collect money owed. You may also look into having copies of that 6D form on hand if possible. That way you can break it down to all involved so they know what to fill out at the time of sale.
Our state doesn't require any forms to be filled out. My best source of information was often finding notices in the LEGALS section of my newspaper. They often post any liens or foreclosure the banks/mortgage companies are doing. Sometimes our HOA property was being foreclosed on by a bank but no notice given to us. It isn't required for a bank to notify a HOA in cases of foreclosures. So check often to see if any property has reached this point if possible.

CharlesM2,

RogerB is correct, listen to him.

It is a common mistake for owners to think that a deed is proof of ownership, or evidence of title. A title insurance policy is the best evidence of title. Going to your Tax Assessor will prove nothing other than the current owner.

If the dues are not paid up before the property is sold, you must file a lien on the property and record that lien with the county clerk, and county registrar.

During the sales process but before close, an abstract of title will be performed (buyer's attorney, or maybe a title insurance company will perform it) This abstract traces ownership, and outstanding liens encumbrances, etc. on the lot/block/parcel and tells the buyer the home is marketable/salable/to go for it.

Your dues not paid should stick out like a sore thumb to every party involved including the Realtor, broker, mortgage company.

If the Realtor, or broker knows of the dues not paid, it MUST be disclosed to the buyer.

In the proration and closing sales sheet, the amount unpaid and due the HOA should appear as a credit to the buyer and debit to the seller or something to that effect. The buyer can accept a home for sale with an encumbrance so I am sure that something can be worked out in the transaction that the HOA can get paid.

Best of success!!
GeraldT1
NNJ

I do not know about the laws in your state but I would suggest you have some document that delineates the action to be taken when dues are overdue, for instance for our HOA we file a lean when the dues are three months over due.

We had trouble collecting because the home owners would get in arrears then file for bankruptcy and we had to write off this on several homes. The home owner is billed for filing the lien so the association does not lose any money

After we started filing the liens we have not written off any bad debts.

Teresa, if you are working for a Management Company then the MC is responsible for this mistake and should pay. Probably you are an association member assigned this duty. In that case it is a bad debt which the association absorbs unless the property has not yet closed. If not yet closed call the title company and update on the amount owed.

P.S. The title company should have asked for a status letter in writing.

I would think in this instance you might have a leg to stand on. Obviously assuming a check is valid wasn't the right course of action but we all make mistakes. The homeowners made a conscious decision to stop payment on the check and therefore in my opinion should be liable for the amount owed. If you write a check for goods at a store and then go home and stop payment on it you will be in trouble. As Lance said I think you should look into your options.

How do one go about acquiring the correct documents to file a lien on the property?

We are quite thankful that in our area the Title companies have been quite proactive in checking and getting the release or aranging the payment is settled at closing.

Most Realters are required to disclose issue if they are aware of them. When a house is on the market, we contact the agent for the seller and let them know the outstanding dues.

If nothing else they contact the owner for resolution or have to disclose. Failure to disclose can get their realators license pulled.

We moved from Builder's management to self Managed.

In review of the paperwork and our audit, out 99 unit sub-hoa had 30 outstanding members dues. including 3 that were for 3 years.

4 months later we are down to waiting on 3 in total.

It may be a backwards solution by contacting the realtors but in our case it has worked out on every house that sold.