Legal View - Unpaid assessments - New Owner obligation?

I would expect that the sales contract would make clear how any pending payments will be allocated. Just as electric bills, etc. are split.

If the homeowners are in arrears the HOA should file a lien now.

The new homeowner would only be responsible for the assessments from the point of purchase forward. This may or may not include any special assessment (depending on the language the Association used for the special assessment).


If a members account is not current and the Association has a lien on the property prior to the sale, then part of the closing process is to satisfy the lien.

If a members account is not current and the Association has not filed a lien and the property is sold. The Association must either write off what the old owner owed or try and collect it from the previous owner (if they can find them). The new owner would not be responsible for any debts owed by the previous member.


The laws covering the debt would be your States HOA laws, your States lien and foreclosure laws, the Federal Fair Debt Collection Practices Act, etc.

Hope this helps,

Tim

Of course I can speak for IL, but in PA the seller is required to provide the buyer with a Resale Certificate. Among other things, the cert itemizes any outstanding amounts owed by the seller to the association.

At settlement, the closing agent is obligated to collect these amounts due and forward them to the association.

This works well as a last-resort sort of protection, but does fall apart if the home was foreclosed upon by the lender.

You can not lien for the special assessment portion until that has passed. Others who don't pay the APPROVED special assessment can be subject to a lien for that as well. In the mean time the deliquent owner is on the hook for the backdues. The lien should cover the legal fees for filing (If any), interest (Dictated in your docs for a legal rate), late fees, and back dues/special assessment. Fines can NOT be included for liens or foreclosures.

Here's your hitch though. Your HOA needs to have an established policy of what is late and at the lien limits. We had a 6 months behind policy you were subjected to a lien. After a year we would consider foreclosure steps. Liens can't be arbritarily placed without reference and understanding of the policy.

Some states charge for filing liens and others don't. You don't have to have a full time attorney to file. A legal service may do it for about $400. Which is part of the amount that will be owed. I'd call your courthouse to find out the process.

Don't file a lawsuit in small claims. It won't prevent the owner from selling and moving. It does NOT guarantee the money as it can last 7 years before the judgement has to be renewed. Plus it does NOT accumulate nor guaranteed to get legal fees back. If they threaten to sue, then tell them to go ahead. It is cheaper to counter sue and can use the amount owed as the amount to sue for.

Sounds like you all need to re read your documents on this matter. It is all in there. good luck!