HOA lien on property

Hello,

I bought an rental property earlier this year in AZ but live in TX. 2 days ago, I received a letter from a collection agency/lawyer that I have not paid my HOA dues for 7 months. They also added late fees, filed a lien etc. The total fines are more than the dues now. It appears that they had sent coupon books and all the letters to a wrong address (where I lived several years ago). It slipped through the cracks for me since I rent that property out and did not know about these bills at all. Maybe the Title company sent them the wrong address.

Q1. What documents does the HOA get from the Title company and where do they get the owner's address from? I would like to find out how they got the old address since my loan docs or deed documents should have my current address where I have been living for the past 4 yrs.

Q2. Am I liable for the fines, late fees etc? I am willing to pay all the past dues but not the fines and other lien charges/late fees etc since I feel it is not my fault.

Q. What are my options?

DJ

Sorry you are responsible. It is your responsibility to have read your documents and know the rules/payment requirements. You don't just own a house in a HOA without paying dues. Plus there is a benefit for paying the dues if it's used as rental. That HOA fees are tax deductible for maintenance costs. They are NOT if it's your main residence. So you kind of really missed the boat on this one.

The HOA shouldn't have to send you any notifications. If they do, it should have been to your HOA address. That is your official HOA address unless you did provide them with another one. No one else was responsible for giving them that information. If it's outside the HOA then you got to let them know.

Unfortunately, it's time to pay up the bill. Call this a lesson learned. It's NOT anyone else's fault but your own in the eyes of the law. It's not being mean but being real. Sorry.

The Association receives no paperwork from a Title Company unless the Association asks for a copy of the closing docs. Sometimes, an Association doesn't even know the property sold until the for sale sign is taken down.

Without a mailing address of non-resident owners, the Association will utilize the property address. Some Associations will make the attempt to look at county records (which are not always up to date).


Yes, you are liable.
It is your fault, you failed to inform the Association of your mailing address.


Contact the Board (quickly - by phone if possible) and admit the error (explain you thought the Title company would give them your mailing address). Apologize for the error and explain that you do desire to make things right and comply with the governing documents.
Ask if the charges can be reduced if you pay the past due assessments and all (or perhaps 6 months) of the 2017 assessment.

If you have to send a letter, include a check for the past due amount and what you can pay for 2017.

The cost of filing the lien and removing the lien will likely not be waived (as you are reimbursing the Association for funds they had to spend).
The cost of any legal fees will likely not be waived (for the same reason).

Charges may or may not be waived.
That is the Boards option. Therefore, it's best to admit your failures on this issue (more flies with honey type of thing) then become confrontational saying it was the fault of the Association.

I know that this isn't what you wanted to hear.
Hope it helps,

Tim

DJ4 (Arizona) : Respectfully, very few if any jurisdictions would happily tolerate a statutory or covenanted
owner/tenant/whatever, merrily skipping away & leaving the other stakeholders to suck up the costs to finally track you down after a 7 month holiday.

1 - As an INVESTOR would you yourself want your tenant (or eventual buyer) to suck up such costs to locate & collect as incurred by their own slope-shouldering of obligation to effect payment ? " I held onto your money until you finally caught up with me. Now you can suck up your collection costs !".

2 - Do you have options ? : Respectfully, why not start by reviewing your retainer agreement(s) with any professionals you dealt with (if you did ).

Maybe with fully documented hard copy evidence you can try to litigate for someone involved in your purchase, for what you paid to unlien the property & retire the HOA's costs of getting you to do the same duty as other stakeholders. Respectfully, how would you like to hear the defence of : We are allowed to evade our contractual duties to you DJ4 , to duck service of legal notices, to default on court orders etc until an armed possee physically arrives with guns drawn . . . ?

3 - You may want to read some of the topics at this site here & others. Living in a statutory or a mere covenant-linked community can be anywhere from Heaven to Hell.

Respectfully if you're a non-resident your investment would be well ( or at least better ) served if you scrupulously avoid being on the wrong radar of your fellow stakeholders.

If I was on the board, I wouldn't waive any of the soft costs you mentioned. Blaming the title company and not receiving the coupon book is not the board's fault. It is your fault for forgetting about it and not following up. If it was 1 month or so, I might understand but 7 months...no way.

Let us know if you are successful. Good luck.

I do think our Prop. Mgr. (PM) would have tried multiple ways to reach a delinquent owner before going to collections. But yours did not.

I think you'll make a mistake if you try to blame the title company. Your best bet for recovering the soft costs, as already suggested, is to be apologetic while still mentioning you never received the coupon book or whatever the billing method is. Keep it simple.

Whatever goes on between you and your tenant is your business - just because he/she may be late several times and you let it go, doesn't mean others have to. If you think this is partly the title company's fault, take it up with them. You said you had another home in this community, so I don't know why it didn't dawn on you to ask why you had coupon books for one house and not the other. I know this is harsh medicine, but property managers and HOA board members aren't mind readers - if you don't speak up early and explain what's going on, how will they know?

The HOA has to be run like a business - late fees aren't a money maker, but an incentive for homeowners to do right. I was a former treasurer of my HOA and frankly I wouldn't forgot the late fees either, because you seem to be blaming everyone but yourself for this. Why should the HOA go through the trouble of doing a Google search when you could have fixed all this with a simple phone call several months before the nastygram? In my own HOA, I had no issues with working with people if they came to me and explained extraordinary circumstances like major illness, but most of the time, our delinquent homeowners wouldn't do anything until they heard from our attorney.

I do have mortgage payments but the bank sent the coupon book to my (owner) address and I set it up promptly through auto-pay.

Also checked with the Title company 2 days ago- they did provide the HOA management company with the correct owner address through a copy of the Warranty Deed and the Closing statement. Obviously, the HOA management company somehow got this wrong. And yes, I know it is my responsibility to ensure that I pay my HOA dues even if the HOA management got it wrong. So legally, I am at fault. My real and honest excuse is that it was out of sight, out of mind kind of thing for me. I live in another state and do not have another house in that community as someone here interpreted.

I do feel that HOA management should be considerate since I am willing to pay all the dues and the lien charges promptly. I only want to ask they they waive the soft costs (fines and late fees). After all, they did get my address wrong somehow. They are actually not even willing to tell me what document they used or they don't know how they got it wrong. At one point I heard from the collection agent assistant that they sent the coupon book to my real estate agent/property manager. I verified that and the real estate agent says no documents were delivered to his address. They have been providing conflicting answers unfortunately. I do want to resolve this amicably. I have never made a single payment in my life that has been late. This is unnecessary stress for me.

Like it's been said. Throw yourself on the mercy of the HOA and tell them of your mistake. Which it is your mistake. No one was really responsible but for you to have kept the HOA up to date with your information. Otherwise any and all communications goes to that HOA address you own. The HOA when trying to find you access your tax records. Which that would also show your HOA address.

You should be able to negotiate out those fines, late charges, and maybe interest. However, you also must pay ALL the back dues and the cost of filing the lien. In our HOA, if you were willing to do that, then we would waive the other "soft costs". Plus some of those cost may not be legal to put in a lien like the fines. Which I wouldn't make a big deal over.

You don't want to have that lien become a foreclosure. Which is their next step. If that happens, then you have to pay ALL the expenses you own before that thing goes up on the block. Considering you have a tenant, that's going to be a problem with legal eviction process. Your tenant is in no way responsible for these dues.

Richard,

Thank you for the input. Now that I have most of the facts down and great advice from all of you on this forum, I think I can negotiate with them better.

Regards.

I'm a bit late to this thread and not in CA so can't add anything specific to that state. I agree with the advice so far to ask nicely for forgiveness of fees and see where that gets you.

At least here in Florida, the title company sends an estoppel request asking for the current dues and violation status of the property. Sometimes they include the buyer's name, sometimes not, but never anything more than that, such as contact info.

Our methods of contacting new owners would be via mail to the property, a notice left on the door, or knocking on the door and talking to the owner. Obviously, all that is most effective for resident owners. Assuming the association mailed you invoices or notices to the property address (or taped them to the door), then why didn't your tenant let you know you had mail? If the MC only mailed to what they thought was your mailing address and didn't send anything to the property address, I would think that would bolster your case for them to forgo the soft fees.

In our case for a non-resident owner, our next step would be to check the on-line records from the property appraiser's office and see if there was a mailing address there.

Next, if we were able to determine that the property was rented, we'd direct the renter to make the rent payments directly to us until the dues were paid, but that is something allowed by Florida law and might not be valid in CA.

Finally, if none of that worked, then I doubt we'd spend any more time or effort trying to track down an owner who wasn't paying dues, but would just lien (and eventually foreclose) like your association did.

And still if I want to find an owner to a home? I am going to the TAX records... and so are other people who don't have a management company as well. It's a good source of records. Why ignore it cause Richard says so?

In Florida estoppel certificates/letters state all assessments and other moneys owed to the association by the parcel owner. FS 720 says nothing about current violation status.

I presume the board has a published policy on how they will address non-payment of dues.

This would be a policy that details the steps they take and when. How do they make first contact. If no response, do they send a registered letter? After what period of time do they, according to their policy, register a lein?

Did they follow that policy?

You say you bought the property this year but the Association sent notices to an address you used 2 yrs ago.
Who provided an the wrong address to the title company and/or the HOA?

Also, after a month or two of not receiving an HOA monthly assessment wouldn't you reach out to see what's going on?
IMO this is entirely your problem. Which makes you responsible for dues, late fees and any legal fees the HOA has incurred.