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Placing a lien

Started by KarenT • 19 replies • 2084 views

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KarenT (Washington)
Posts: 250
Posted:
Our HOA has already placed a lien on a homeowner's property after we sent letters to request reimbursement for legal fees and the homeowner refused to pay. The property was for sale so we thought we could recover the money as soon as he sold but he has taken the property off the market and rented the residence instead. He has refused to communicate regarding this matter so we filed a small claims action and requested mediation. He refused medication. If he fails to show up for small claims court, we will automatically get a judgement. My question is does anyone know if we can lien other property owned by this individual since we have a "judgement" against him individually?
BradP (Kansas)
Posts: 2,640
Posted:
Quote:
Posted By KarenT on 08/08/2007 2:15 PM
Our HOA has already placed a lien on a homeowner's property after we sent letters to request reimbursement for legal fees and the homeowner refused to pay. The property was for sale so we thought we could recover the money as soon as he sold but he has taken the property off the market and rented the residence instead. He has refused to communicate regarding this matter so we filed a small claims action and requested mediation. He refused medication. If he fails to show up for small claims court, we will automatically get a judgement. My question is does anyone know if we can lien other property owned by this individual since we have a "judgement" against him individually?

Karen:

My question is why did you go to small claims court? Even if he took the property off the market he is not off the hook for dues and if he fails to pay that just keeps accruing and the HOA then has the ability to foreclose on his house. To me it sounds like if you get a judgement he probably won't pay and you will be back to the step of placing a lien on the property if it is permissible in your state.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Small claims was NOT the way to go. You should have just placed the lien. The above poster was 100% correct on their advice. A Judgement doesn't get paid anytime soon. (I've got one over 3 years old). They don't have to pay a judgement for up to 7 years. Then that may be extended up to 10 years. Plus, the judgement ALLOWS the person to sell their home and MOVE without paying the judgement.

A lien would have allowed you to attach the additional legal costs of filing the lien, the money owed, possible interest, and it accrues over time for unpaid dues. The owner can NOT sell their home until they pay the lien. That means the owner has got to pay the amount sooner or later if they want out. It is true, that they can freely rent the home out while they wait to sell it. Just means the amount on the lien goes up. The Renter can NOT pay the dues. It has to be the owner.
Former HOA President
NancyD1 (Florida)
Posts: 447
Posted:
I agree with Melissa but for the person moving and not collecting the judgement. If a lien is placed on the property and the owner sells, our HOA estoppel has this lien attached. We have collected because of this.
KarenT (Washington)
Posts: 250
Posted:
The HOA has filed a lien on the property in the HOA. However, we know he owns a large commercial piece of property (not in the HOA)which is for sale. I'm just asking if anyone knows if we can lien other property owned by this individual when you receive a judgement thru a small claims action?

Thanks!
BradD2 (Florida)
Posts: 418
Posted:
You can only lien the property in the HOA. What state is this?
BradP (Kansas)
Posts: 2,640
Posted:
Quote:
Posted By KarenT on 08/09/2007 8:45 AM
The HOA has filed a lien on the property in the HOA. However, we know he owns a large commercial piece of property (not in the HOA)which is for sale. I'm just asking if anyone knows if we can lien other property owned by this individual when you receive a judgement thru a small claims action?

Thanks!

Karen:

My advice to you would be to worry yourselfs about the property in the HOA. If you win a court judgement and lien on his other property and even get paid, what happens to the HOA property? He continues to not pay those dues. Lien the house, if he chooses to not pay, then foreclose on him and be done with him. I wouldn't get caught up in anything else.
RogerB (Colorado)
Posts: 5,067
Posted:
Karen, the first step is to place a lien on his property in the HOA. The next step is to hire an attorney to start forclosure. During that process initially you can try to garnish wages and bank accounts. You may also try to get the judge's approval to place a lien on his other property if foreclosure proceed to a sale of the property in the HOA and there would not be sufficient equity available to cover the HOA's costs.
CharlesW1 (Georgia)
Posts: 826
Posted:
Quote:
Posted By BradP on 08/09/2007 9:01 AM
Posted By KarenT on 08/09/2007 8:45 AM
The HOA has filed a lien on the property in the HOA. However, we know he owns a large commercial piece of property (not in the HOA)which is for sale. I'm just asking if anyone knows if we can lien other property owned by this individual when you receive a judgement thru a small claims action?

Thanks!


Karen:

My advice to you would be to worry yourselfs about the property in the HOA. If you win a court judgement and lien on his other property and even get paid, what happens to the HOA property? He continues to not pay those dues. Lien the house, if he chooses to not pay, then foreclose on him and be done with him. I wouldn't get caught up in anything else.

Brad,

The HOA knowledge you and other on HOATalk have provided have provided has always been extremely helpful to the board and I.

Along the same topic, I was hoping you could give me some additional advice concerning a delinquent HO within our community, here in Georgia.

The homeowner is currently renting the property. Is it possible to garnish the money he/she is receiving from the renter? The board has filed a lien several months ago, because of delinquent assessments and even attempted to garnish his wages (advised by the HOA attorney) we had to hire a private investigator to locate the homeowner to be able garnish his/her wages. WITH NO SUCCESS! A lot more legal jargon, I’m not all that familiar with.

This homeowner receives rent from the tenant. The renter pay’s x number of dollars a month to rent the property

We had asked the renter for the address in which he mails his monthly payment and he said the homeowners brother picks it up on a scheduled day of the month, apparently it changes every month.

What else can or should we do?

Thanks as always
Chuck W.

Charles E. Wafer Jr.
BradD2 (Florida)
Posts: 418
Posted:
You can begin foreclosure of the lien. Are you using a real estate, contract law, corporate, general purpose or collections lawyer? I find the advise of your lawyer a bit odd.
BradD2 (Florida)
Posts: 418
Posted:
One other thought Charles, have you checked with the county property appraiser for the mailing address of the owner? Most have websites so it should be fairly easy to locate but the mailing address they have on file is where they send the tax bill.
BradP (Kansas)
Posts: 2,640
Posted:
Charles:

I am not smart enough to know all the laws, especially in your state. However, I don't know if I would waste my time trying to garnish wages, instead if he refuses to pay you need to get him out of the neighborhood. Foreclosure is that step. Garnishing wages is just a viscious cycle that won't end until he moves. Heck, he may not even be reporting his rental income, so it may be hard to garnish that anyway.
MadaleineD (Florida)
Posts: 12
Posted:
Depending on what state you live in, once you get a judgment, you should be able to prosecute the judgment through your sheriff's department by foreclosing on the property.
KathleenR (California)
Posts: 13
Posted:
Hello Karen & Brad!

We are also experiencing the same problem in our complex. Several homeowners are not paying their dues and the management company begins the forclosure process and at the last hour the homeowner(s) pay. Then the whole process begins all over (same homeowners). This is not fair to all that pay their dues on time. Is their anything we as Board Memebers and homeowners can do. This is also what is contributing to our financial turmoil.

Thank you!
NancyD1 (Florida)
Posts: 447
Posted:
Quote:
Posted By KathleenR on 08/18/2007 8:02 AM
Hello Karen & Brad!

We are also experiencing the same problem in our complex. Several homeowners are not paying their dues and the management company begins the forclosure process and at the last hour the homeowner(s) pay. Then the whole process begins all over (same homeowners). This is not fair to all that pay their dues on time. Is their anything we as Board Memebers and homeowners can do. This is also what is contributing to our financial turmoil.

Thank you!

We have a few HO who do this. It gets to the point where we are ready to foreclose, then they pay. It is always the same people. We now use an acceleration clause in our CC&R's. We can now ask for one years Maintenance Dues up front from these people. Our attorneys', when they make the settlement are enforcing it. It may seem like an extreme measure but why should everyone else pay for those few.
PaulM (Pennsylvania)
Posts: 1,347
Posted:
NancyD1: By stating that your association is now asking for one year's maintenance dues up front for new buyers into the community, have you actually been successful in collecting one year's assessment fees from the buyer at settlement? And it has not shown to be a deterrant to making sales?
BradP (Kansas)
Posts: 2,640
Posted:
Quote:
Posted By KathleenR on 08/18/2007 8:02 AM
Hello Karen & Brad!

We are also experiencing the same problem in our complex. Several homeowners are not paying their dues and the management company begins the forclosure process and at the last hour the homeowner(s) pay. Then the whole process begins all over (same homeowners). This is not fair to all that pay their dues on time. Is their anything we as Board Memebers and homeowners can do. This is also what is contributing to our financial turmoil.

Thank you!

Kathleen:

I don't know if there is much you can do, eventually you are getting paid with interest and penalties but I know it is a pain in the butt. A suggestion I might have is to amend your collection procedure to make the time frame shorter and maybe more expensive (higher late fees) for those that go into foreclosure proceedings multiple times. You would still have to make sure it is legal within your state, but eventually they will sell and move or get the picture.

I guess the important thing is you are getting your money and the procedure is working, it just takes a while.

NancyD1 (Florida)
Posts: 447
Posted:
Quote:
Posted By PaulM on 08/18/2007 10:05 AM
NancyD1: By stating that your association is now asking for one year's maintenance dues up front for new buyers into the community, have you actually been successful in collecting one year's assessment fees from the buyer at settlement? And it has not shown to be a deterrant to making sales?

Paul,

We don't ask new buyers for the maintenance up front, this applies only to delinquency's. Our process is; Maintenance is due on the 1st of each quarter. HO have 10 days before it is considered late. On the 15th a past due letter is sent from the office. At this point we have designated to the bank not to accept these late checks unless we have the late fee also.45 days from date due, it goes to the lawyer, the letter from him states that they have 30 days or a lien will be placed. We pay no fees for this. The fees are put on the HO and they have to pay the attorney.

Many times we get to this final point of almost putting a lien. We have 3 or 4 HO that make us go through this. When it happens we are usually to the point of the 2nd Maintenace and that is late also. The decision was made that we are tired of everyone carrying the weight. In our doc's we have a clause that we can accelerate when the person is consistantly late. I justify doing this when the person has done this to the HOA 3 times.

The lawyer, before he settles anything he presents the HO with a years dues up front plus the late fees and his fees. The homeowner has no choice to settle with us, it is in our doc's
RogerB (Colorado)
Posts: 5,067
Posted:
Kathleen, first establish a Rule and Regulation on Delinquent Assessments. It can include:
1) Monthly written notices to all delinquent owners;
2) High enough monthly late charge to encourage most to pay;
3) Esculation to the remaining annual assessment due before a lien is filed;
4) High enough lien filing fees to encourage payment before filing; and
5) Before turning the account over to an attorney, make sure the owner is fully aware of the major legal costs they will be liable for upon engaging an attorney.
6) At all times treat the delinquent owners the same way you would want to be treated if you were in their shoes and were aware of their circumstances. Remember the objective is to receive the money and still be considerate of your neighbors.
GloriaM (North Carolina)
Posts: 829
Posted:
Charles:

If you have any amenities you can prohibit the renter from using the pool or tennis courts. If the tenant applies enough pressure to the landlord, perhaps the tenant can pay the dues from the rent 1st so that he/she could use the pool.

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