Collecting on old liens

Can you not foreclose? What is the liens based on? More details. Thank you.

MelissaP1 - Liens are based on nonpayment of dues.

TimB4 - Could the fact that the liens exists indicate that a previous judgement has been granted?

To either of you: Any pointers or advice on where to starting researching the foreclosure process? That's one of the many facets of board membership that I have had trouble finding clear explanation for. I'd like to put in a structured foreclosure process in our adopted community rules, but don't want to overstep boundaries.

There are lots of resources on the web, so start with a search to get basic information. You should also talk to your association attorney to see what your state law says. For example, in my state, the association can foreclose on the lien 90 days after it’s filed without going to court, but in other states, court action is necessary. There may also be a limit on how long the lien stays in effect – you may need to renew it when it’s close to running out. From there, the attorney can help you develop a process on what the community will do and when.

As you’ve seen, liens aren’t necessarily a guarantee that you’ll get your money immediately, but they can help the association recoup some money if the owner eventually sells because your lien will have to be satisfied before the deed changes hands. On the other hand, if the mortgage company files a foreclosure, its secured interest supersedes the association’s so it gets paid first before the Association. If there isn’t enough money from the sale to pay everyone, the association’s lien gets washed out and that amount has to be written off.

As a former board treasurer, I preferred to pursue court action against the homeowner first – that’s where you can garnish wages, force a sale of assets and all that stuff. Even so, suing someone is easy – collecting is another matter, and lawsuits don’t necessarily guarantee that either. People declare bankruptcy or disappear (and you have to spend more money to try and find them), lie about their employment, change ownership of assets to the spouse or someone else so you can’t get to it and so on. I saw it all and perhaps a little more during my 10 years on the board, 6 of them as treasurer.

In general, talk to the attorney when the case is turned over, so you can see what would be the best approach –a nastygram from the attorney will get some people to pay up, others need to be hauled into court sued and a few will need to be foreclosed on and that’s where you’ll need the lien.

Foreclosure, in my opinion (and a few others on this board) is generally the last and most drastic step, so you need to be clear on your primary objective. Usually, it’s to get the deadbeat out so you can get a new owner who will pay. If you get your money back from the process, great, but more often than not, you may have to be satisfied with just getting rid of the owner. Good luck!

Bruce,

This is a fairly old thread (yes 4 months can be old) and the issue is likely resolved one way or the other.