HOA versus POA in Georgia

We wondered if we could take any means beyond liens to recoup back assessments. Can we file in small claims court for late dues? We are a HOA and have placed liens but our association does not have enough money to pay bills and we are a no frils group. Not much we can cut. Is there power beyond the lien to be cleared when property is sold?

Paula, absolutely go for small claims while the amount is still withing small claims court limits. It costs next to nothing to do and may have a positive impact. First of all it's a physiological step for a person to appear in court and lose. Also small claims judgement gives you ability to collect money from sources other than the home. A lot will depend on your local laws, but you maybe able to garnish wages, put liens on bank accounts, if the person owns a business collect property from the business, or even repossess and sell one's car.

You may have to do some research but small claims (any court really) generally gives you more options to collect than having a lien on a property and hope that the property sells and there is enough money to pay your lien

Melissa, you seem to have only one solution for every problem. Maybe it's something that worked for you, but it may not be applicable in every case. It's unfortunate that every advice you give on this board is based on somewhat limited experience you have, but you make it sound like that's the only option.

Nowhere in my message I said that a lien shouldn't be filed. The OP asked for additional ways to attempt to collect. A lien is a safety net which an association must file, but it's not an aggressive way to collect. Also most likely if the person is not paying their assessment they have other debt and possibly are late on their mortgage. Depending on when the property was purchased on market conditions in your area there may not be any money left to satisfy association's judgement when a property is sold.

An association must pursue every option of collecting assessments allowed by law. Not only it helps with financials, but it also sends a very strong message to all living in a community that they are serious about collection.

I have posted elsewhere on this forum the disaster our association encountered in trying to collect unpaid assessments.

Most states place first mortgages ahead of HOA liens, so many liens will never be collected if the member's lender forecloses. HOA liens can sit on the record for decades and not be collected until the property is sold. The lien remedy offers little substance to most HOA's.

In theory, the owner owes the unpaid assessments as long as he owns the property. Lender foreclosures and tax sales do not eliminate the owner's debt. This allows the HOA to file civil lawsuits to obtain money judgments for the delinquent assessments.

The reality is that an HOA can easily spend a ton of money to get judgments that will never be collected. Never lose sight of the fact that you will be spending money that you actually have to chase after money you may never collect. Kinda like spending the grocery money on lottery tickets.

Based on experience, I would offer the following rules for seeking judgments:

1. Never file a lawsuit against an absentee owner unless you know for sure where he can be found. If you cannot find him, you cannot serve him with the summons and complaint. If you cannot serve him in most states you cannot get a judgment, so filing a suit in this situation is a waste of the filing fee.

2. If your state laws or court rules allow it, an officer of your HOA should represent the HOA. If you hire a lawyer to represent your association, you will have to pay him his fees whether you win or lose. The chances of collecting a judgment are so low that I would write off an unpaid assessment before I would ever pay someone in advance to try to collect it.

3. The reality is that no organization -- not even the IRS -- collects everything that it is owed. Therefore, do not go off the deep end chasing after unpaid assessments.