Can we remove a LIEN the previous HOA leaders placed?

KasiY (Georgia)
Posts: 3

Posted:

Our neighborhood's HOA was previously controlled by the bank that owned a large majority of the homes after the bubble burst. Unfortunately they did a horrible job and almost none of the services that the HOA was supposed to provide were being taken care of. The five home owners (the other 15 homes were vacant)who lived her during this time stopped paying their HOA fees and have not done so in the last two years. In the last four months every home in the neighborhood has sold and all the new home owners paid their fees upon closing. When the bank turned the HOA over to the homeowners we found out about the five that have not paid their fees and that the bank put liens on all of their homes. What we'd like to do is forgive the debt from the past year and a half and let them pay a pro-rated fee for the rest of the year. We don't even know how to begin doing this. Any advice would be appreciated. Thank you!

MatthewW4 (Arizona)
Posts: 500

Posted:

If the original liens were filed in the name of the HOA and not the bank, your HOA can record a lien release to remove them. You are the successors to the previous board (the one controlled by the bank) and your lien release is every bit as legal as their original liens. Even if these owners paid the liens in full, you would still have to record a lien release at some point.

KasiY (Georgia)
Posts: 3

Posted:

Thank you Matthew...that's good to know!

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Let's make sure we understand the situation first. Your HOA had 15 homes and only 5 are "original". They stopped paying the dues when under the bank's control. The bank put a lien on their property for not paying. Now the HOA has sold out it's lots and the bank let the owner's take over. Your now wanting to release the lien on those 5 owners and start from scratch or prorate them from the date of turnover?

This is really benovelant of you all to do this. It may help in the good will kind of way. Considering a HOA is only funded by it's members for it's members. This missing money did have an effect on your current HOA's budget whether you have seen that or not yet.

The issue here is that the bank may still hold the lien and not the HOA. The bank probably did not turn over the debt as well to your HOA. A lien is a debt. So you may want to see if the bank owns the lien or your HOA does. If your HOA does, then yes it may be able to release the lien but it will cost you all a bit of money in terms of loss or fees. Now if the bank still owns the lien then those owner's need to deal with the bank to release the lien NOT the HOA.

Clarify the details first before proceeding...

Former HOA President

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Let's make sure we understand the situation first. Your HOA had 15 homes and only 5 are "original". They stopped paying the dues when under the bank's control. The bank put a lien on their property for not paying. Now the HOA has sold out it's lots and the bank let the owner's take over. Your now wanting to release the lien on those 5 owners and start from scratch or prorate them from the date of turnover?

This is really benovelant of you all to do this. It may help in the good will kind of way. Considering a HOA is only funded by it's members for it's members. This missing money did have an effect on your current HOA's budget whether you have seen that or not yet.

The issue here is that the bank may still hold the lien and not the HOA. The bank probably did not turn over the debt as well to your HOA. A lien is a debt. So you may want to see if the bank owns the lien or your HOA does. If your HOA does, then yes it may be able to release the lien but it will cost you all a bit of money in terms of loss or fees. Now if the bank still owns the lien then those owner's need to deal with the bank to release the lien NOT the HOA.

Clarify the details first before proceeding...

Former HOA President

TimB4 (Tennessee)
Posts: 21,059

Posted:

You should also check your governing documents as typically Associations may forgive late charges and penalties for unpaid assessments but not the assessment itself. However, payment plans can be made to pay the past due amounts.