Is There a Need to Place a 2nd Lien?

We have a number of property owners who have not paid their annual dues this year. Some of them are repeats from last year, and already have a lien place against their lot from '09. I don't believe we need to file a 2nd lien, but I'm just not positive (it looks like years ago, our POA did - but knowing some of our past BOD's (we are self-managed), that doesn't necessarily mean they had to!). I just want to make sure that everything owed from this year would still be included if/when the debt is satisfied, even if there is only one lien on file with a specific amount stated. Thanks.

Actually, Terry, as with most all questions, the official answer is:

It depends.

It depends on if your assessments are mentioned in your documents as a "continuing lien."

It depends on the wording of your lien documents to begin with.

For example, our liens state:

Amount owed: $461.00, subject to increase for additional assessments, late fees, costs, and legal fees as a continuing lien.

That means we do not have to file liens if the resident is delinquent in subsequent years.

It depends on state laws for HOA/COA collections.

It depends on state laws for liens.

You may also want to check with the government agency where liens are filed. In Indiana, I believe liens used to last for one year and then you had to refile it if you don't go ahead and sue the person. The law changed about a year or so ago for HOAs doing this with foreclosures in mind - today, I think the HOA has to wait five years before foreclosing on the homeowner.

Thanks for the input. After reading your comments, I've again searched Virginia Statute about liens and I'm thinking we might have to file one every year, but they don't actually spell it out. I like the idea about inserting language into our Memorandum of Lien that allows for additional assessments, costs, etc. after the initial filing, but now that I've read your replies, it looks like it is a state by state thing. I'll have to do some more research, or cave in and contact our attorney (we do our own liens - only use him when we go to collections).

And Steve, even though it might have sounded like we aren't very agressive about collecting dues, we are. We place liens when dues are not paid, and are moving forward with non-judicial foreclosures on the ones that have not paid for a number of years. Part of our problem is that most of the delinquent owners have unimproved lots, and do not live around here - so there really is no incentive for them to pay (like not being able to use the picnic area, boat ramp, etc.) Our annual dues are $325, so it takes a while for the past due amounts to add up enough to warrant taking legal action - considering the attorney costs, court costs, etc. I asked the question about the need for a 2nd (and 3rd, etc.) lien because we were hoping that we could avoid the additional paperwork if possible - maybe it sounded like we weren't doing enough, but I think we are. Thanks again for the input.

Thanks Michele. We switched to self-managed a couple of years ago, and did get a sample lien form from our attny at that time (prior to that, our mgmt co. took care of them). But I guess we never thought about the lien filing year after year when we took over (there was such a learning curve that some stuff got a lower priority). It occurred to us this year (after filing liens two years in a row on some property owners) that maybe we didn't need to. But, as mentioned earlier obviously it's a state by state thing. (I was kind of hoping that the "Virginia Boys" who helped me so much about email voting would kick in!). I'm going to bite the bullet and email our attny just to double-check, but right now seems like VA might require a yearly filing.

Thanks Glen. I do have that section of the VA Code but it didn't spell it out as clearly as I had hoped! I guess the part about in order to perfect the lien, having to "file before the expiration of 12 months from the time the first such assessment became due" is telling me that we have to file every year? I guess the "from the time the first such assessment" part is what threw me a little.