Right to place liens

Started by CarolC13 • 5 replies • 1489 views

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CarolC13 (New Mexico)
Posts: 1

Posted:

We have a member who is questioning our HOA's right to place liens on properties that are not paying the annual dues. Our bylaws state in section 6 article 3 "when a member shall be in default in the payment of dues for a period of 60 days from the beginning of the fiscal year legal action will be taken." We take a lot of time talking with the nonpaying members and write many letters and have offered payment plans before placing liens. Not one of these members have questioned our right to place a lien. This member who is complaining has not had a lien placed but is concerned that the association and it's members can be sued.

TimB4 (Tennessee)
Posts: 21,059

Posted:

The Declaration of Covenants, Conditions and Restrictions (CC&Rs), also known as Deed Restrictions, typically specifies that the Association has a continuing lien on the property for Assessments. Therefore, the property technically already has a lien on it, the Association is just recording the lien agreed to by the member when they purchased the property.

This is the document you should be looking at, not your Bylaws.

Typically the wording in the document is something like [emphasis added]:

Creation of the Lien and Personal Obligations of Assessments: Each owner of any Lot by acceptance of a deed therefore, whether or not it shall be so expressed in any such deed or other conveyance, is deemed to covenant and agreed to pay to the Association: (1) annual assessments or charges and (2) special assessments for capital improvements, such assessments to be fixed, established and collected from time to time as hereinafter provided. The annual and special assessments, together with such interest thereon and costs of collection thereof, as hereinafter provided, shall be a charge on the Lot, shall be a continuing lien upon the property against which each such assessment is made.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

As Tim says:

Our Covenants say in big, bold type on the cover page:

This Declaration Imposes Assessments Constituting a Lien on Each Lot in the Subdivision.

JohnB26 (South Carolina)
Posts: 1,569

Posted:

you do not 'place a lien'

as others have stated: the lien ALREADY exists as per the documents

you may actually 'record the lien' with the register of deeds at the county

eg. 'express mechanic's lien' exists when you have work on property performed ~ the mechanic may or may not actually record said lien to prevent sale of property w/o paying

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

Posted By CarolC13 on 04/11/2013 9:30 AM
We have a member who is questioning our HOA's right to place liens on properties that are not paying the annual dues.

Simply ask the guy to describe why he thinks the HOA cannot place liens.

Some HOA's are voluntary and cannot place a liens, collections, etc. So if this is his argument, he has a valid point. If it were me, I would pull his past 10 deeds and check if the CCR's were listed and mandatory at any point in time.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

When I say "place a lien" I'm referring to recording a lien at the registry of deeds.

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