Homeowners who get ambushed with new legal terminology regarding their obligations can feel crushed. No one wants to get settled in their new home, see a letter from the HOA with unfamiliar terminology, and start crying. Fees, assessments, dues, and liens can seem alien and confusing for those without a background in real estate.
They don't have to intimidate you, though. If your HOA sends you a letter that says you're at risk of facing an HOA lien, don't let it scare you. Open dialogue with your HOA right away.
Not sure where to begin the process? Keep reading for more on how liens work, their role as a defect in a title, and how to talk to HOA property management about a lien.
What Is an HOA Lien?
Liens provide a legal notice that indicates that an individual or group has a creditor interest in a piece of property. This shows courts, banks, law enforcement, and other relevant individuals that the person in possession of the property owes them money.
An HOA lien, thus, documents the HOA's legally recognized creditor interest in getting paid. If you want to perform certain major transactions, such as a second mortgage or a sale, you have to cure the defective title.
How to Cure a Title
Curing something, in legal terms, means addressing any issues underlying the property. Curing the title will mean addressing the lien and any other issues.
To cure the title and clear the lien, you will need to either pay any debts you owe or come to an alternative agreement with the management. HOAs can work with debt holders to find a solution, though they have no obligation to negotiate. Most do not want to put people out of their homes or wreck their credit for violations of HOA rules.
Options for Recovery for HOAs
An HOA can seek relief through the court system without foreclosing. If a court finds in favor of the homeowners' association, HOA management can choose to take the money from your bank account.
In extreme cases, an HOA can choose to foreclose on the home to secure payment of the debts. Most HOAs will only initiate an HOA foreclosure as a last resort, as evicting residents and taking ownership of a home occupies resources that could be better spent on other tasks.
What Homeowners Can Do
If you find yourself behind on HOA fees, contact the board or management company. Start by offering something you can do, such as a partial lump-sum payment or an installment plan, and go from there. Never ignore a lien.
Living Debt-Free
An HOA lien or the threat thereof can leave you feeling scared and worried about whether you'll remain in your home. If you avoid panicking, make a reasonable effort to pay up, and stay in contact with your HOA, you can face this obstacle without incident.
If you want an HOA management firm with unique, customized services to meet your needs, contact PMI Phantom Realty to request a bid. We provide association management and self-managed services for HOAs in and near Killeen, Texas. We serve condos, high-rises, mixed-use developments, and many other types of property and have more than a decade of experience, and can help deal with liens on HOA properties.
