HOA cost of filing Liens

I do not have a lien on my property. I am a type "A" personality and the annual maintenance fee (the only fee in the covenants and bylaws) has always been paid before January 1st of the coming year.

Our documents automatically create a lien for annual maintenancee fees. The HOA has periodically filed a public lien using an attorney or management company that went beyond the $175.00 annual maintenance charge and they have filed liens that include interest, and processing fees.

No documents, not the Corporations, the Covenants, the Bylaws, (we have no rules/regs), provide the association to charge interest, charge penalties for non-payment nor transfer the cost of hiring a lawyer to the homeowner. In otherwords, simply put, the total sum that the HOA can lien is $175.00 per annum ( I think)

The HOA has sent out to 10 homeowners letters that indicate that if the Homeowners do not pay their $175.00, the HOA will hire an attorney to file lien and the cost to the homeowner will be upwards of $800.00.

Can the HOA attach attorney's fees, interest, late fees if the governing documents are silent on the matter?

John, below is the total wording as to the maintenance charges:

HOMEOWNERS ASSOCIATION AND MAINTENANCES CHARGES:

1. The XXXXXXX Homeowners Association is a non-profit corporation. The membership will consist of the owners of lots in XXXXXX subdivision, Sections I and II. There shall be one vote for each lot for which dues are paid.

2. All the numbered lots on the recorded plat shall be subject to an annual maintenance charge or assessment at the rate not to exceed one hundred seventy-five dollars ($175.00) per year. The first assessment of $175.00 shall be due and payable on January 1, following the date the deed is delivered to the Purchaser of a lot in the subdivision from the XXXXXX Homeowners Association, and thereafter shall be due and payable in advance on each and every succeeding January 1.

The assessment of $175.00 herein provided shall remain effective for a period of one year after the date these covenants are executed. Thereafter, the assessment shall remain the same until it is increased, decreased or discontinued, as from time to time may be determined by the XXXX Homeowners Association.

I skip here because following is a list of what the HOA can use the annual maintenance fee for. However, it clearly states that the HOA isn't required to perform any of the items listed.

6. The annual charge shall constitute a lien or encumbrance on the land and acceptance for each of the several deeds of conveyance shall be construed to be a covenant by the grantee to pay said charge, which covenant shall run with the land and be binding upon the Grantee and his successors and assigns. The XXXX Homeowners Association shall have the exclusive right to take and prosecute all actions or suits legal or otherwise which may be necessary for the collection of said charges.

7. In the event that it is necessary to foreclose the lien herein created as to any property, the procedure for foreclosure shall be the same as for the foreclosure of a real estate mortgage.

8. The lien hereby reserved, however, shall be subject to the following limitations:

a. Such lien shall be at all times subordinate to the lien of any Mortage lender of any sum secured by a properly recorded Mortgage to the end and intent of any such Mortgage, or lien instrument shall be paramount to the lien for charges that shall become payable prior to the passing of title under foreclosure of such Morgage or acqauisition of title by deed in lieu of foreclosure.

b. Notice of any charge charge due and payable shall be given by filing notice of lien in the Office of the Clerk of the Court for XXXXXX County, South Carolina. As to the subsequent bonafide purchaser for value the lien herein reserved for charges due and payable shall be effective only from the time of filing of said lien; provided, however, that nothing contained herein shall affect the right of the Association to enforce the collection of any charges that shall become due and payable after the acquisition of title by such subsequent bonafide purchaser for value.

I say the right to recover costs is it is right there in your docs:

6. The annual charge shall constitute a lien or encumbrance on the land and acceptance for each of the several deeds of conveyance shall be construed to be a covenant by the grantee to pay said charge, which covenant shall run with the land and be binding upon the Grantee and his successors and assigns. The XXXX Homeowners Association shall have the exclusive right to take and prosecute all actions or suits legal or otherwise which may be necessary for the collection of said charges.

Why haven't you talked to your board about this? Did you get one of these letters (sounds like it)? If so, did you provide documentation proving the money was paid before January 1? Note I said "paid" - in many associations (like mine), sending the payment by snail mail and postmarking it on Jan. 1 isn't enough because the money won't be in the association's hands on that date.

John noted your documents do state the HOA can take legal action to collect unpaid dues, but as you also know, filing liens, lawsuits or attorneys isn't cheap or free. Since association has to take this action to collect, why shouldn't it also have the right to seek reimbursement of those collection costs, especially since those costs come out of the payments made by other homeowners like you? I'd rather my HOA use $800 to pay for some sort of improvement to the common area or a service like lawn care, which is what assessments are supposed to be used for?

Now if you think your documents are being misinterpreted, you should go to an attorney to review them to get answers to legal questions (which is what you're asking and most of us who respond on this site aren't attorneys). If they haven't already done so, the Board should establish a collection policy which would address what will happen if the annual assessment isn't paid by X date, noting the homeowner is responsible for all collection costs, including attorneys fees. In my association, we send the collection policy to homeowners every year, along with the itemized budget for the upcoming year, so everyone knows exactly what to expect. If the board revises the policy, which it can do, a revision date is posted on top of the form (I was on my board for 10 years, 5 of them treasurer, so making sure everyone knew what was up was a big issue for me).

Renee,

If you investigate the appropriate lien laws of your State, I expect that you will find that the party filing the lien has the right to also collect costs associated with the collection effort as this tends to be common.

If one prefers to challenge the amount of said costs, they will need to take the issue through the courts.

Janet

The SC Horizontal Property Act applies to multi floor (high rise ala condo building) associations. It does not apply to single family, townhouse, duplex or multiplex home, etc. associations.

Not sure what the OP's units are like.

Thank you everyone for your responses.

Tim: As always, I appreciate the direction. I spent 5 hours last night and 2 this morning trying to find the answers to whether the HOA has the right to collect costs of filing the lien. Apparently I'm not searching this correctly, because I haven't gotten an answer. If you've got any thoughts on how to search this on the internet, I'd be grateful for your help.

The State of South Carolina does have a SC Horizontal Property Act as John and Janet referenced. We are a subdivision of single family homes therefore this doesn't apply.

Sheila, I purposefully stated that I do not have a lien on my home and that I always pay my HOA assessment before January 1st. I pay so far ahead that it took me two years to understand that the Management Company was actually holding my payments for deposit until after January 1st. The reason why I know this is that around December 28th, I would call the management company to verify that they received the payment because it had not cleared my bank account. The property management company enlighted me on their policy of holding HOA assessments until the new calendar year. It grieves me to the bottom of my soul that we have reached a point in this society that what is said by a person is not looked at as the truth, but instead is looked at as a lie.

The problem in communication is not the members to the HOA, it is the HOA to it's members. I have sent, in the past 3 years, 7 inquiries about covenants/bylaws and only once have I received a response. Other members have received worse treatment. They have requested a meeting and literally the HOA has refused to meet or if they agreed to meet, refused to look at a homeowners documentation. You know where that lead.....to $20,600 cost of a lawsuit.

One of the greatest benefits to this site is the opinions and perspectives to consider in an equation. I wasn't asking for a legal opinion. Truthfully, I also don't bank on legal opinions. In every court case, one of the attorney's is right and one is wrong. If there was ever testimony to errors made in the courts, read caselaw and how many decisions are overturned on appeal. However, some folks in fact may have dealt with an issue in court or by meeting with an attorney and do have a legal opinion regarding an issue for everyone to consider.

From my personal position, I am looking for only truth and understanding and to make certain that our HOA doesn't get too far out into the weeds.

Melissa, you say that your HOA is allowed to lien back dues, state allowable interest, and related expenses. Is this by law or by the wording in your documents? Before I came here to pose the question, I'd already looked at multiple legal websites. When the website addressed these issues directly, all of them said that the ability to lien and the costs are according to the documents. Perhaps 6 websites total. Because they weren't necessarily all in South Carolina, and I understand that each state has different rules, I have to wonder if something more is out there that allows them to pass in the lien the cost of attorney's fees/processing fees.

Sincerely, I thank all of you. For your help.

an internet search on SC Lien laws would provide links

an internet search on SC HOA Lien laws would provide links

Here is one such article from nolo: South Carolina HOA and COA Foreclosures

Bottom line, until someone who has a lien wants to challenge said lien in the courts, the Association can likely include all costs of collection.

Fortunately, per your postings, you won't run into this issue.

Keep in mind that by charging the costs of collection to the delinquent owner keeps everyone else from having to pay that bill (i.e. lower assessments)