Foreclosure or Lien proceedings in Texas?

If you lien, there's not much that goes on. In my state of Alabama, it costs about $300 to place a lien on someone. In other states, they are "free" or cost very little. However, keep in mind that a lien does NOT guarantee the money. It just means the owner can NOT sell their home/property until they pay of the lien plus costs. So your condo is out the legal costs until the home goes up for sale. You may be able to charge interest on the money owed as well.
A lawsuit/small claims is even a worse option. The lawsuit works similar to a lien. The only real difference is that with a lawsuit the owner can sell their property and move without paying at any time. A lawsuit is only a JUDGEMENT just like a lien is. Judgements don't have to be paid right away and can last years before being paid if ever.
A foreclosure process could be different for each state. I've done one. It took us about 3 months to complete at a cost of $800 to collect $2,400. A pretty GREAT deal. They usuallly cost in the thousands. Our lawyer was "new" and didn't know what he'd gotten into. In our state, if a property is foreclosed on, the original owner can buy the property BACK within a year if they are willing to pay what they owed, the sale price, and any improvements done by the "new" owners. Some states, foreclosure is a "final deal".
What people don't understand about HOA foreclosures is the fact the HOA could get "stuck" with the house. That sounds "good" on the surface but it isn't. That means the HOA has to qualify for a mortgage and make normal house/insurance payments on the property. IF it is in "bad" condition, the HOA will have to put out the money to fix it. The HOA can sell the house for a profit but it's extremely risky. Can your HOA afford to make house payments/repairs in a worse case scenerio?
Most foreclosures this doesn't happen. The owner's usually fight it at first and then find a way to "compromise". Funny thing about foreclosures is that they can be STOPPED at ANY time! All that has to be done is for the owner to pay the money owed. They can even stop the foreclosure up to the moment of the bidding process. So when I hear about a HOA foreclosed on someone's house, it could indicate they weren't willing to compromise or pay.
I would suggest you give notice for a lien since so many have paid. Next time you do a special assessment, you may need to take into account up to 20% of the owner's NOT paying and figure that cost into the overall Special assessment. It's not how they are supposed to work, but it could help get what was needed by the special assessment done in a timely basis.

Hi Adam:

Your HOA should probably talk to its lawyer regarding the procedure. If bylaws/state laws allow the addition of legal fees, then this is a good way to go. Some states allow all the fees for collection (lien cost, legal fees, collection fees, etc.) to be added into the lien, which is good.

In Oregon, a lot of HOA's file a lien, then pursue a personal judgement against the owner and go through the collections process. Unfortunately for the owner, this gets reported on their credit report - but that's an additional tool for the HOA to use in encouraging prompt and timely payments. My understanding is that not all states allow this.

I generally don't recommend that HOA's pursue foreclosure except as a last resort. It's important to make sure that there is sufficient equity in the house (above the mortgage(s)) so that there is something to collect on, rather than just getting stuck with nothing if it sells for less than is owed on the mortgage. Your lawyer will probably know how to find that out.

Best of luck,

J. Patrick Moore, CMCA

KathyS, I think you read the post wrong. They have ONLY 2 out of the 22 that haven't paid their assessment. After a majority vote has been made and agreed to, it doesn't matter what the non-paying members excuses are. If everyone else could find a way to pay, why make someone else so special to allow them NOT to pay? If one pays in a HOA, you ALL pay in a HOA.

Thanks Joseph, that's what I was looking for. The assessment is for $9k each unit, and only 2 haven't paid. They aren't able to provide good reasons, they are just stalling. We are definitely going to have a lawyer involved, I was just wondering what to expect in the process.