over due HOA dues

We are a HOA in Friendswood TX of 554 home built in the 1970's our dues is very little $45.00 a year. we have quite a few home owners who have not and will not pay there dues. I a read that we can lien there home. which could lead to taking there home though foreclosure? Is this the procedure for other violation too?

Terry, dues are paid by homeowners of non manditory HOAs. If your's is a manditory association you pay assessments which are against the property (not the person). For delinquent assessments your Declaration of CC&Rs may automatically have established a lien against the property. That does not preclude filing a lien, which can be a good idea when allowed in your state. Foreclosure on a lien is allowed if your CC&Rs and/or your state statutes allow this. Some do; while for other older CC&rs one must wait to collect when the property is sold.

There are at least $30,000.00 in past due dues that is owed to the HOA. We really need these dues to make upgrades and do up keep on the common areas. If we file liens on these homes does this usually get them to pay the rears quicker, then just waiting until they sell there homes.
I do know that the dues has to be paid up to date to sell.

WOW! $30,000 is an exhorbitant amount of dues money to be owed to the HOA. What have the Exec.Boards done to encourage residents to pay their back dues?
Do your docs allow fining? or the restricted use of voting or of common amenities?

TerryM2

I sympathize with you and many board members across the country can certainly relate. I too am attempting to recoup money owed to our association from (far more than are desired) lot owners, that are behind in their assessments. (Roger had clarified the difference)

I would presume that many of those delinquent have been in arrears for several years, in order to accrue $30,000.00 in back dues. WOW, is that counting attorney fee also, interests and late fees? Whether we are discussing dues or assessments, it is still very difficult and unnecessary hardship on the members who do contribute annually, monthly or quarterly. This shortfall affects ALL Lot/unit owners’ property values, and needs to be dealt with as soon as possible.

I personally would FILE A LIEN IMMEDIATELY UPON THOSE THAT WILL OBVIOUSLY BENEFIT YOUR ASSOCIATION THE MOST, PERHAPS EVEN THE OLDEST, IN THEORY, THE GREATEST SUM COLLECTABLE. By doing this you are ensuring that when the home is sold (as long as the lien is still present) that the HOA will collect, NOT ALWAYS THE CASE, as I have learned!

Good luck and Keep strong!
Chuck W.

That is NOT the point.... just to not collect on $45 due would set a precedent for ANYONE else.

Just a quick note first: many of us (including those of us who know better) continue to use dues and assessment interchangeably. Sorry if it adds to any confusion, but we are a mandatory HOA and we refer to the assessments as dues sometimes as well.

Okay, now to the lien issue.

I think you might be surprised just how much money can be recovered filing liens. I do know THIS, you'll get a lot more than if you DIDN'T file the lien.

For one thing, you don't have to wait till someone sells. If people are trying to refinance, for example, the ReFi company will want the title to be clear, so -- lien gets paid at refinancing closing. Interest rates are starting to come down a tad again, so people might be eyeing that as an option.

If someone is getting a second mortgage or applying for credit somewhere and using the home for collateral, the title will most likely need to be free of any liens. So -- you get paid if they want to get that done.

Plus, often just sending people a summary notice of the final bill to them and the bill stating clearly : NOTICE OF INTENT TO FILE PROPERTY LIEN will have a lot of people scrambling to send the money in.

They got away with not paying the $45 for so long, they think you are all bark and no bite. I would also make sure that the Notice of Intent to File Lien include some of the "inconveniences" the homeowner will discover once a lien if filed.

It never fails, every year we get a handful of people who just won't pay. Okay. That's the choice they made. So. We file the lien. We currently have 12 liens in a 300-residence HOA. In one year, about a third of those will be paid due to the reasons mentioned above. An additional number will get paid as one or two people decide to move. Then there is the handful that may have not paid because they are in the middle of a bankruptcy. Because we have a lien, we get on line and get our money, granted a few dollars at a time, but we have 2 bankruptcy managers sending us about $18 a month each on two separate bankruptcy filings. We would have gotten neither if we didn't have the lien out there on the home.

We get fewer and fewer no-pays a year. Word is out that we will file liens and that helps. Now they know there is a consequence for their decision to ignore the notices.

Hope this helps!

Foreclosure needs to be a last resort. If your HOA doesn't have enough for upkeep I doubt you'd want to go for that. However, a strong letter from an attorney explaining they need to pay up (including whatever late fees, etc are due, including the cost of the attorney letter) may be a wake up call. The attorney can check your docs to see what late fees, etc would accure. Followed by the intent to lien which will be recorded against their property. Again it should be stated that whatever attorney fees are incurred by this action is their reponsibility.

The association could file their own liens but make certain to include not only the assessment but costs incurred. Go to your courthouse or go online to see how to do this if you can't afford an attorney but I can't see how $30,000 isn't worth an attorney. Things will not improve by letting all these late assessments mount up. Good luck.

Ellen,

If this is a voluntary assn foreclosure is not an option. THose who don't pay just aren't members; nothing you can do about that! Voluntary means it's up to you to determine whether or not you want to belong. If you belong, you pay; if you don't belong, you don't pay -- simple as that!

JB it can be done however if people are not willing to join you usually have to allow the people who do not want to be in your HOA to remain out until they sell their property where the new owner would automatically become a member. A lot of opinions both pro & Con can be found here.

http://www.hoatalk.com/Forum/tabid/55/view/topic/forumid/1/postid/15761/Default.aspx

I believe that some mortgage holders consider a lien being filed against a property as being in default of the loan. If that's the case, then filing a lien would result in a warning notice from the mortgage company and might result in payment without refinancing or selling a home. That's why some mortgage companies require taxes to be put into an escrow account; to prevent having a tax lien against the property (which trumps a mortgage lien).

Terry...

I would not give up on collecting from deliquents even if it is only $45 a year. Check with your Register of Deeds to see how much filing a lien is, in our county it is $8 to file, $7 to release and you don't need a lawyer. There have been many great posts on just how effective a lien may be. If you refinance you will need to clear it up, and some mortgage companies will get after you if one is filed.

Terry, you're going to need the services of a good association attorney when it comes to collections so you may as well find one now to straighten out whether you're a voluntary/mandatory association and how that relates to the assessments and the association's ability to collect.

If you have the ability to legally assess and collect, then I would would recommnd that you first send out a letter to all delinquent onwers stating that they have a 30-day grace period to bring their account current. Let them know that if they don't, the associaton will place liens on the home, which will also include the amount of the attorney's fees for placing the lien, and that after another period of time (check with the attorney on how much time must elapse betweeen notice, lien and the next action) further action will be taken up to and including foreclosure on the lien (in Texas, you have the ability to foreclose non-judicially - you don't have to take it through the courts - at least that was the way it was prior to the last session of your legislature, but the attorney will know).

When owners find out that instead of $60 in back assessments they're going to owe $240 or something, checks will start to come in.

The "grace period" letter should be written in a manner that tries to get their cooperation, rather than just threatening them. Let them know that first, they have an obligation that they agreed to to when they purchased (assuming the attorney tells you they did) and by failing in that responsibility, they are putting an extra burden on their neighbors. That its better when everyone pays their share.

Joe

Glen,

You said: "Mary the poster was asking about how to convert a voluntary HOA to a mandatory HOA. If you can get the H/O's to agree which would require 100% approval you would have to allow the people who didn't want to join to remain outside the HOA until their property sold at which time it would convert"

If becoming a mandatory HOA requires a 100% vote, then who would be left that didn't want to join???

I agree on the 100% vote requirement; however, I've heard of several cases here in AZ where an HOA attorney was instrumental in getting a number of volutary HOAs to convert to mandatory w/o a 100% vote of the members. This is not spelled out in State law so I guess anything goes until someone decides to challenge in a court of law.

MaryA as I stated before in other posts I am not an attorney and do not know all of the legalities involved nor have I ever converted a voluntary HOA to a mandatory one which is why I directed JB to a thread specific to that topic; I just gave a synopsis of the consensus there.

Hi, Offer automatic payment on January 2, of each year/ or first day of your fiscal year and if they don't sign up for that, one thing that seems to help is to send a collection letter to the homeowner and remind them if the fee isn't paid it may appear on their credit report.

Cheyenne -

While the topic may be interesting, I suggest you take a look at the last post date in threads you may to resurrect - this one is about 18 months ago.

I suspect the original question & discussion from the relevant participants is either resolved or died from lack of interest.

You may have been better off starting a new thread .. .. ..