LEIN for delinquent HOA dues on a property in foreclosure

Hello, The person running our HOA just went into foreclosure and we found out that there have been other owners not paying dues and nothing has been done about it. Does anyone know if a lein for delinquent HOA dues can be placed once a property has already entered into foreclosure? Also, we need to re-direct the management of our HOA. We have no by-laws, ccr's, etc set up. Any advise on how to get my HOA set up would be appreciated!

Wow...how can there be delinquent HOA dues if there are no HOA documents? Documents are how people know to pay their dues...

I'm bowing out of this one, since I'm guessing others will ask questions about the builder/developer/transition/county records/etc. My association has been established for about 25 years.

I searched county records and just found CCR's that were recorded by the builder. Do these automatically roll over to the owners when the builder passes control? We have never set up our own CCR's. The HOA was turned over to the owners in 2006. There are only 7 units. Back in 2006 all owners agreed to allow one owner manage the HOA which only consisted of collecting dues, paying the gardner & insurance. The owner who was managing the HOA is in foreclosure and so is one other unit. There is no board of directors. We are a condo complex...7 attached town homes. There are 4 phases but all run individually. At this point myself and one other owner are managing the assn.
Thanks

Erin,

I'm afraid all of you owners are in dire need of an education about HOAs. I don't say this as a slap against your intelligence. It's a sorry fact that there are way too many people in your position. Living in an HOA but not really knowing or understanding what an HOA is.

The CCRs are developed by the developer and recorded against all the properties in the s/d. The CCRs "run with the land", meaning they pass on to successor owners. I suggest you take that copy of the CCRs that you just found, make copies and give them to the other 6 unit owners. Read them and if you have any questions, please come back here and ask away.

The members need to have a meeting and elect a board of directors who will be in charge of managing the HOA. There should be much work involved with only 7 units and not many expenses to take care of. But, the most important thing is to collect the assessments. The HOA is liable for filing a Fed. income tax return. If the State has an income tax they most likely are liable to file that too. The assn should have been set up as a nonprofit corp so you may want to check that out with the State Corp. Commission. Also you will want to check with the Sec of State to find out if the HOA is required to file an annual report. I don't know if NC has HOA statutes,but you should also check that out with the state legislature. If there are HOA statutes the BOD will be resp. for abiding by them.

Since you are a condo complex it would be very wise to state a reserve fund. A reserve fund is for the purpose of putting away monies for future maint and repair. In a condo complex this means money for new roofs, painting the buildings and repairing and/or resurfacing the streets if they are private. Also, if there are other amenities such as a swimming pool there would be other expensive maint issues to deal with. Having mones set aside in a reserve fund is much better than having to ask the members to pass a special assessment that could be in the thousands and possible payable by each member in one lump sum.

Yvonne,

The law reads: "The association's lien for assessments. . .may be foreclosed only if the owner has been delinquent in the payment of monies secured by the lien, excluding reasonable collection fees, reasonable attorney fees and charges for late payment of all costs incurred with respect to those assessments, for a period of one year or in the amount of $1,200 or more, whichever occurs first." As you can see the amount is $1,200 not $10,000! Ref ARS 33-1807.

If this person refuses to pay his assessment he should be sent a delinquent notice incuding the applicable late fee (if the assn charges one) for each month that he is delinquent. Depending upon what the collection policy of your assn is, a lien should be recorded after he is so many months delinquent and foreclosure proceedings started in accordance with state law. If the assn does not have a collection policy I suggest they adopt one immediately and send it to all members of the HOA. Let everyone know the policy will be strictly complied with. FYI my assn charges a late fee of $15 and an admin fee of $5 if the assessment is not paid w/i 30 days of the due date. (Our assn gives the member 30 days to pay because our assessments are billed quarterly. Assn's that collect monthly assessments may only allow a 15-day "grace" period.) At 45 days delinquent a demand letter is sent at an additional cost to the member of $10. At 60 days delinquent the account is turned over to our attorney for collection; a $25 fee is charged to the member for this letter. At this point a lien is filed. The BOD will watch the account and make a determination if and when foreclosure proceedings should be started. Any collection costs and attorney's fees incurred are billed to the member. State law regarding late fees on assessments says: "A payment by a member is deemed late if it is unpaid 15 or more days after its due date, unless the community documents provide for a longer period. Charges for the late payment of asessments are limited to the greater of $15 or 10% of the amount of the unpaid assessments."

The members' obligation to pay assessments has nothing to do with their proximity to the common areas. It has to do with the HOA maintaining the common areas and any amenities owned by the HOA. It is the resp of the members of the assn to fund these, and all other, operating costs.