Rules for Filing Liens in Alabama

We had management companies until 3 years ago, and since then our Board has been learning a lot. The management companies used attorney's to file liens and the charges that were passed on to the Homeowners were around $300-$400 per lien.

We know that laws are different in different states, but we believe that we can file a lien for non-payment of Dues, Late Fees, ect... without a lawyer. I have Googled until I just cannot anymore. Can anyone tell me the process if there is one? Do we need to send certified letters before filing? Can we mail in the lien paperwork or do we need to go to the courthouse?

We are an HOA that is over 20 years old, so we are not under the new legislation that passed a couple of years ago.

Also, for homes that already have a lien or even two, do we subtract the amount that they were filed for or do we file a lien for the total that is owed at this time?

I read something about liens only being good for 10 years and I am wondering if that is why there are more than one lien on a home. Also, in digging, I have found some homes that still have liens on them after the homes have been sold twice. The lien's were not expired....if they do expire...as it had not been 10 years yet.

It is just best here in Alabama to have a lawyer or legal assistance filing a lien. That expense is put into the lien amount owed. Some legal services provide it for like $400 plus filing fees etc. You don't need a lawyer on retainer or anything fancy like that. So don't think that has to be done to retain a lawyer. You can simply pay for their services to file a lien.

Keep in mind when dealing with lawyers to keep it brief. Watch your contact with them via text, calls to office, email, or phone calls. They can charge you for those after the initial free consultation call. So get all your ducks in a row first and limit the contact to the attorney to 1 person. That one person of course having board permission to talk to the lawyer and approved BEFORE contacting.

Lawsuits are not a good idea to collect back dues. There is like a 7 year term on those before renewal. Plus person can sell their home and move without paying a dime. Plus the expenses don't accumulate like a lien does. You also have to negotiate getting legal expenses back in a lawsuit. A lien it's built in to get expenses back.

I have done a foreclosure here in Alabama. It takes about 6 months. The person does have a right of redemption up to a year. Which means they can re-purchase the home if they pay back the money owed the HOA and bank. So even if one does buy a HOA foreclosure, they have to wait up to a year before they can do much to it. Otherwise, wasting their money during the redemption time.

We have an established 6 months we lien, 1 year we CONSIDER foreclosure policy. Something I'd recommend adopting in your HOA. It weeds out many of the people who are either struggling, ignorant, or angry. Plus helps keep track of liens status.

Thanks, MelissaP1!

We are trying to avoid having those fees added to the account. We had a Board that did it that way, and it seemed excessive. (The fees that were added) Yes, the homeowners this would affect have not paid their Dues, but sometimes it is because of real reasons such as sickness.

Our Dues are once a year. We do add a late fee. At one time, the previous Board and the guy they hired as management would add the Attorney's Fees, an HOA fee for being behind that gained interest, and a Management Fee for being behind. They also added the maximum interest that they could for each year. By the time this Board came along, the interest for many years was more than the initial amount due. He was also fining for things like not having a green water hose, and/or having a tiny speck of rust on a mailbox that was so close to the ground that a person would have to move the grass to see the tiny speck. The reason the people who are on the Board now, ran for office, is because we all felt like we were walking on eggshells. So, now we are probably being too lienent.

We will definetly charge the homeowner whatever it cost us to file the lien. We are just trying to make it as inexpensive as possible. I don't think that any of us would have an issue with charging $400-$500 to someone who has not paid dues in 10 years. We are setting out to do liens on anyone who is 3 years past due. We have 716 homes in our neighborhood and our Dues are only $220 a year. We don't want the lien charges to be more than what is owed.

I totally understand where you are coming from. I am just explaining where we are. We are self managed and with 716 homes, we stay very busy while still having work, family ect.... Having a lawyer do the liens may be faster and less stressful. We will see how it goes.

Thank you for your answer!

KellyM3,

Our thinking is that as long as we file a lien, the HOA will receive their money when the home sells. While we would love for everyone to be up to date, with 716 homes, it is probably not going to happen. The old Board and manangement company did both liens and had a collection agency working the accounts. The homes with the biggest balances were past due at that time, also and it did not make them fork up any money. What it did do, was protect us from the home selling and the Dues just being ignored at that time, although one did sell with a lien on it.

So, why do you believe that a collections attorney is something we need? It may indeed be the case as we may be missing something. None of us have ever been on an HOA Board before, so we are learning as we go. If we were hurting for money, I could see them possibly collecting the smaller amounts more quickly, but I am not sure that would offset the cost. I would really appreciate it if you would explain your thoughts about that so I can see if we are missing something that we need to know.

Thank you for responding!