RalphF4 (Florida)
Posts: 3
Posts: 3
Posted:
when should a lien be put on an HOA property
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past dues owed of $2500.00 its 2 years
Started by RalphF4 • 10 replies • 604 views
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MichaelS56 (Minnesota)
Posts: 859
Posts: 859
Posted:
Now.
ND (PA)
Posts: 792
Posts: 792
Posted:
Yesterday.
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
We lien after 9 months late.
CathyA3 (Ohio)
Posts: 6,299
Posts: 6,299
Posted:
I think it will vary depending on the amount of the regular assessment, the number of months late, the number of owners (is one owner 10% of the total number in your community, or only 1%), and the nature of the common areas that must be maintained (some things can be delayed more easily than others).
One size does not fit all.
FWIW, someone who owed $2500 for two years would have been liened, and we would be looking at other legal action.
One size does not fit all.
FWIW, someone who owed $2500 for two years would have been liened, and we would be looking at other legal action.
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
This is a strange amount as it doesn't seem to accumulate. What is the money owed for? Most of the time a HOA can lien for 2 things. 1. Unpaid dues. 2. If someone doesn't correct a violation and the HOA pays to fix it, that money can be subject to lien. (Example: Broken fence. The owner doesn't fix it after notified. HOA can fix it and send the owner the bill. If not paid then HOA has right to lien for it).
If this is for unpaid dues, then the amount should continue to accumulate. The lien can include late fees, interest, and filing/legal fees. So as long as not paying dues, the amount should keep going up.
Fines can not be subject to foreclosure. Fines also can not be basis for liens except where dues are applied to fines owed. That way it will look like unpaid dues than fines. Fines are punitive charges and not an income source of the HOA.
Would need more details of what the amount owed is for before determining it is eligible for a lien.
If this is for unpaid dues, then the amount should continue to accumulate. The lien can include late fees, interest, and filing/legal fees. So as long as not paying dues, the amount should keep going up.
Fines can not be subject to foreclosure. Fines also can not be basis for liens except where dues are applied to fines owed. That way it will look like unpaid dues than fines. Fines are punitive charges and not an income source of the HOA.
Would need more details of what the amount owed is for before determining it is eligible for a lien.
Former HOA President
TimB4 (Tennessee)
Posts: 21,059
Posts: 21,059
Posted:
Quote:
Posted By RalphF4 on 03/03/2021 10:50 AM
when should a lien be put on an HOA property
when should a lien be put on an HOA property
My Association will start the process to lien the property after 4 months of non-payment.
We actually seek a court order prior to placing the lien as a judgement gives more options to collect. If you only lien, you then have to decide to foreclose on your neighbor or simply wait until the property is sold.
With a judgement from the court, you can then petition the court to go after other assets or garnish wages.
MikeB23 (Louisiana)
Posts: 109
Posts: 109
Posted:
We file a lien and then sue.
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
Why would you file a lien and sue? That is the basically the same thing. Both are "judgements". A lien has more teeth than a lawsuit. A lien one can't sell till the lien is paid. A lawsuit there isn't anything really binding to force to pay. One can sell and walk away. There is like a 7 year period till it has to be renewed. What board/HOA is going to try to waste time and money to collect a 7 year debt? It's chasing good money after bad.
Plus a lien can be turned into a foreclosure. A lawsuit not so much. Think need to rethink this process and talk to a good lawyer that doesn't tell you they will do what you tell them to do...
Plus a lien can be turned into a foreclosure. A lawsuit not so much. Think need to rethink this process and talk to a good lawyer that doesn't tell you they will do what you tell them to do...
Former HOA President
TimB4 (Tennessee)
Posts: 21,059
Posts: 21,059
Posted:
Quote:
Posted By MelissaP1 on 03/04/2021 6:19 PM
Why would you file a lien and sue? That is the basically the same thing. Both are "judgements".
Why would you file a lien and sue? That is the basically the same thing. Both are "judgements".
I disagree with that statement, but it may be correct based on differences in how States treat HOAs.
From my understanding, due to contractual agreement in the CC&Rs, the Association has a continuing lien on the property. When they file the lien, they formalize it. This type of lien is known as a property lien.
When you place a lien on the property due to an order from the court, that is called a judgement lien.
NOW in some States (and it varies by State), an HOA can simply perfect the lien (file paperwork) or in some States, the HOA has to go to court and win a judgement prior to filing a lien.
Here is some info:
What Is the Difference Between a Property Lien and a Judgment Lien? from nolo
Is a Judgment the Same As a Lien & Which One Is Worse? from pocketsense
HOA Collection Options: Lien Foreclosures vs. Money Judgments from condoassociation.com
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
I am just stating what my lawyer stated. A lawsuit judgement and/or a Lien are both legally "Judgements". You can choose which one to apply. You can choose to sue to get a court judgement or you can FILE a lien to get a judgement. The difference between the two is how to collect on that judgement.
For me a lawsuit holds no or little "teeth" on collecting. Remember you have a set amount to sue for. The amount doesn't accummulate over time. It is harder to collect. The HOA is not required to have one's social security # nor your place of employment. Which makes the wage garnishment much harder or impossible to use as collection. Plus one can simply walk away from a lawsuit if no one is putting real effort to collect. Your HOA changes boards every 1 - 2 years. Do you think many of them are going to remember to pursue someone that moved out and never paid their bills? Most likely not. Plus that person is no longer a member.
For me a lien holds more teeth. It does accumulate over time. You add on legal expenses they have to pay back. If left unpaid, they can't sell their home. Plus you can change the lien over to a foreclosure to "stop the bleeding" their continued non payment. Which also gets rid of them out of the HOA.
The difference between lawsuit/lien is in the details and enforcement that goes with them. A lien isn't as "sexy" as a lawsuit but it's less money to file/pursue.
For me a lawsuit holds no or little "teeth" on collecting. Remember you have a set amount to sue for. The amount doesn't accummulate over time. It is harder to collect. The HOA is not required to have one's social security # nor your place of employment. Which makes the wage garnishment much harder or impossible to use as collection. Plus one can simply walk away from a lawsuit if no one is putting real effort to collect. Your HOA changes boards every 1 - 2 years. Do you think many of them are going to remember to pursue someone that moved out and never paid their bills? Most likely not. Plus that person is no longer a member.
For me a lien holds more teeth. It does accumulate over time. You add on legal expenses they have to pay back. If left unpaid, they can't sell their home. Plus you can change the lien over to a foreclosure to "stop the bleeding" their continued non payment. Which also gets rid of them out of the HOA.
The difference between lawsuit/lien is in the details and enforcement that goes with them. A lien isn't as "sexy" as a lawsuit but it's less money to file/pursue.
Former HOA President
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