GeorgerwilliamsW (Indiana)
Posts: 975
Posts: 975
Posted:
Senator Talian has introduced SB404 at the last minute in the Indiana General Assembly.
First, it extends the time that a homeowners association has to file for foreclosure from the current one year to six years.
Second, it makes a purchaser responsible for unpaid assessments of the previous owner if the purchaser is made aware of the amounts due regardless of whether or not a lien has been recorded.
Third, it enables the association to sue a homeowner for unpaid assessments and legal costs whether or not a lien has been filed.
Fourth, it empowers a professional property management company to act on behalf of the association, and allows the association to purchase out of foreclosure the leined property.
First, it extends the time that a homeowners association has to file for foreclosure from the current one year to six years.
Second, it makes a purchaser responsible for unpaid assessments of the previous owner if the purchaser is made aware of the amounts due regardless of whether or not a lien has been recorded.
Third, it enables the association to sue a homeowner for unpaid assessments and legal costs whether or not a lien has been filed.
Fourth, it empowers a professional property management company to act on behalf of the association, and allows the association to purchase out of foreclosure the leined property.
- Synopsis: Homeowners associations. Provides that: (1) a grantee of real estate is not liable for; and (2) the real estate conveyed is not subject to a homeowners association lien for; any unpaid homeowners association assessments against the grantor unless the grantee has actual knowledge of the unpaid assessments. Allows the manager of a homeowners association to enforce a homeowners association lien by filing a complaint in the circuit or superior court of the county where the real estate that is the subject of the lien is located. Provides that a complaint must be filed not later than six years after the date the statement and notice of intention to hold a lien is recorded instead of one year after the date. Allows a homeowners association or the manager of the homeowners association acting on behalf of the association to: (1) bid on the real estate at a homeowners association lien foreclosure sale; and (2) acquire, hold, lease, mortgage, and convey the real estate. Specifies that an action to recover a money judgment for unpaid homeowners association common expenses may be maintained without foreclosing or having a lien securing the expenses.
MicheleD (Kentucky)
Posts: 4,491
Posts: 4,491
Posted:
Quote:
Posted By GeorgerwilliamsW on 01/20/2009 3:07 PM
en recorded.
Third, it enables the association to sue a homeowner for unpaid assessments and legal costs whether or not a lien has been filed.
en recorded.
Third, it enables the association to sue a homeowner for unpaid assessments and legal costs whether or not a lien has been filed.
huh. How about that.
It strikes me as odd that this was not already an option.
We can do both, or either, one not dependent on another.
SheliaH (Indiana)
Posts: 6,964
Posts: 6,964
Posted:
Hm, just in time for tomorrow's board meeting - I'll pass this along and see if the board wants to sent something to Ms. Talian and our own state senator.
From what I can see, this looks like a decent bill, although the second provision could be tricky. I feel the previous owner should be responsible for the unpaid assessment even after the house changes hands (assuming the proceeds from the sale didn't go to settle up). However, if there's a written agreement where the new owner states he/she will accept responsibility...
From what I can see, this looks like a decent bill, although the second provision could be tricky. I feel the previous owner should be responsible for the unpaid assessment even after the house changes hands (assuming the proceeds from the sale didn't go to settle up). However, if there's a written agreement where the new owner states he/she will accept responsibility...
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
KirkW1 (Texas)
Posts: 1,665
Posts: 1,665
Posted:
In Texas generally HOA dues are considered to have a dual status. They are both a lien upon the land, and they are a personal debt. This has always allowed one pursuit independent of the other.
As a note, my understanding is that in Texas there are only two ways that a new owner would not become liable for the past dues:
As a note, even though a first order lien should wipe out the claim of the HOA, I am told that most leave the debt intact. One of our BOD members has purchased two additional houses. One from pre-foreclosure and one that was foreclosed. In both cases at the end of negotiation with the bank the bank threw in the condition that he pay off the HOA.
As for the foreclosure, is that to say that currently the HOA loses the lien if they don't foreclose? Or does it mean that if they don't foreclose in one year they can't foreclose ever?
Personally, I think there should be a minimum of either some time or some amount owed before an HOA can foreclose.
As a note, my understanding is that in Texas there are only two ways that a new owner would not become liable for the past dues:
- A higher order lien wipes them out.
- The HOA provides certification that dues are current.
As a note, even though a first order lien should wipe out the claim of the HOA, I am told that most leave the debt intact. One of our BOD members has purchased two additional houses. One from pre-foreclosure and one that was foreclosed. In both cases at the end of negotiation with the bank the bank threw in the condition that he pay off the HOA.
As for the foreclosure, is that to say that currently the HOA loses the lien if they don't foreclose? Or does it mean that if they don't foreclose in one year they can't foreclose ever?
Personally, I think there should be a minimum of either some time or some amount owed before an HOA can foreclose.
GeorgerwilliamsW (Indiana)
Posts: 975
Posts: 975
Posted:
Thanks. This is interesting legislation. Keep in mind that Hoosierland has no laws regarding homeowners associations currently on the books (except for the condo horizontal property act). There is only case law and statutory contract law. This legislation proposes statutory language that mirrors the language already included in many covenant declarations which makes it puzzling.
Most covenant declarations already make unpaid assessments both a personal liability of the owner enforceable in civil court and a lien against property. And most covenant documents already permit the association to purchase a unit out of foreclosure.
What I find interesting is the language which transfers the personal liability to the new purchaser. That is not something included in most covenants. And the 5 year extension is odd. There is something behind this legislation that is not evident yet.
I doubt that this will receive a hearing, since Tallian is a Democrat in a Republican controlled chamber. In the past two sessions she has introduced the Uniform Common Interest Owhership Act which has gone nowhere.
Most covenant declarations already make unpaid assessments both a personal liability of the owner enforceable in civil court and a lien against property. And most covenant documents already permit the association to purchase a unit out of foreclosure.
What I find interesting is the language which transfers the personal liability to the new purchaser. That is not something included in most covenants. And the 5 year extension is odd. There is something behind this legislation that is not evident yet.
I doubt that this will receive a hearing, since Tallian is a Democrat in a Republican controlled chamber. In the past two sessions she has introduced the Uniform Common Interest Owhership Act which has gone nowhere.
KirkW1 (Texas)
Posts: 1,665
Posts: 1,665
Posted:
In our situation I don't think that the debt is a personal liability when the land transfers. It only remains attached to the land. To make it a personal liability to the purchaser is very strange.
What is more strange is that a Democrat would introduce such legislation since that would seem to run counter to the general party line. I would suspect that she is trying to buy some political favors as one variety or another.
What is more strange is that a Democrat would introduce such legislation since that would seem to run counter to the general party line. I would suspect that she is trying to buy some political favors as one variety or another.
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