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About 26% of US citizens currently live in communities with homeowners associations.
These communities are typically very desirable as HOAs offer various benefits. Residents can enjoy organized neighborhoods with better property values and a stronger sense of community.
With that in mind, residents in HOA communities have certain responsibilities, and failing to stick to these can lead to various issues. HOA liens are a perfect example of this.
So what is an HOA lien? Let's take a look.
What Is an HOA Lien?
Anyone who owns a home in an HOA community is a member of that association. This means that they get all the benefits of the HOA, but must also follow their rules.
All residents must pay regular HOA dues. These can vary between different associations and may change from year to year. The HOA board decides how the collected dues are spent to best serve the community.
Some members will inevitably fail to pay these HOA fees at times. When this happens, the HOA is responsible for taking action. One approach that tends to be very effective is to implement an HOA lien.
An HOA lien is a legal claim of a resident's property by the association. If a resident has a lien on their HOA property, it will be much harder for them to sell or refinance it. If they deem it necessary, an HOA can also initiate foreclosure proceedings.
How Does an HOA Lien Work?
HOA liens typically attach to properties automatically. In some cases, however, an HOA must record it with the county recorder's office.
The lien will remain in place until the homeowner pays the missing dues as well as any other related fees. These can include late fees, attorney fees, and interest.
Once the owner pays everything they need to, the association will remove the lien by recording an HOA lien release. An HOA must typically do this within 21 days, but it can vary. Once completed, they'll send a letter to the owner to notify them.
What Happens After an HOA Foreclosure?
In the event the owner fails to pay off what they owe, the association might foreclose on the lien. This works in the same way as a standard foreclosure.
There are two types of foreclosure; a judicial foreclosure and a non-judicial foreclosure. The former involves the court system and can take more time. The latter doesn't need to be taken to court so it's faster and simpler.
Both of these can be an issue for the homeowner and will cost them more money in the long run, so it's ideal to void them.
Managing an HOA Community
Homeowners should always pay their HOA dues and abide by other community policies. Failing to do so can lead to larger issues like an HOA lien that will only cost them more money.
PMI LA Pacific provides a full range of property and HOA management services in Los Angeles and the surrounding communities. We're part of the PMI franchise which has been serving clients across the US for over 20 years. Take a look at our association management page to see more about how we can help your community.
