Your opinion regarding lien

I would like some of your comments regarding this situation. I am the Pres. of a small HOA (12 SFD) Although we have "officers" the "board" consists of myself and one other individual. Because of a chronic delinquency with one homeowner this matter was turned over to our attorney and the homeowner was informed the association would lien the property. The other board member is dealing with this homeowner because I was forced to obtain a restraining order against this individual. This has been going on for over a year now so I finally put my foot down with the other board member, because the homeowner has just been using every tactic and excuse to delay. Not to mention the Board member didn't want to deal with the conflict so he would also delay.

We gave them 60 days to pay up or we would lien. Of cousre no payment. I asked the other board member to give them a copy of the lien and he is afraid to give it to them. He says "why do we have to give them a copy, we already told them we would lien". So what are your thoughts, give them a copy or not?

KarenT,

I’ve been the Vice President in our POA now for 2 consecutive years. We file a lien 30 days after the annual assessments are due. We mail a copy of the lien via USPS and certified mail, just in case (thanks HOATalk.com posters) the HO decides they won’t go retrieve the certified letter from the post office.

Do you have a PM? Do you have an HOA attorney? If so let them do the dirty work. If not, couldn’t you have the local police server the HO? “IF” not it maybe wise to have a police officer escort the individual to the door, to prevent any confrontation.

Best of luck and keep us posted.

Chuck W.

Too funny!

I have no idea why anyone thinks it has to be hand-delivered?!

That's a new one on me.

You told him you would file the lien if not paid in XX days. The days came and went with no payment, the lien gets filed.

Send a copy by mail, however you wish to do it.

Doesn't really matter.

Once he tries to refinance or use it as collateral, he will know you have the lien on it!

mail it, it is cheaper than paying a kid $5....

Thank you all for your opinions.

The saga continues!! Last night a process server showed up and tacked a Notice of Default on their door - so thank heaven we filed the lien!!!!!!!! They haven't made a house payment since December of 2007.

Why would the lien be wiped out?? If we filed it before the filed the Notice of Default?

Well look at it this way: who do you expect to pay it? You can't pass the debt on to the new owner.

In a normal sale escrow won't close until the title is cleared, which means that any liens have to be paid off. Typically the property is being sold for more than the mortgage amount, so when the buyer hands over the money to the escrow agent, the funds are first used to pay off the existing mortgage, then to pay any liens and closing fees. The seller finally gets whatever is left.

But in a foreclosure where the bank is seizing the property, the title transfers to them so there aren't any funds left to pay off any liens. If you are lucky they will sell it for enough to cover the mortgage and the liens, but more than likely not.

Check your docs. Your CC&Rs will probably even have a clause for "Subordination of the Lien to Mortgages." Ours specifically states that a foreclosure will "extinguish" the lien.

Even if there is no money to take care of the lien wouldn't the lien still be in place? Our docs say nothing about foreclosure and many docs are out of date. I know ours are (1986) and there have been many changes in the law since they were drafted. Karen, I would suggest you examin your docs, see what they say and then contact someone in the legislature to see what appplies in your particular state. I've conducted many real estate transactions and can assure you we would not insure any property with an existing lien. An exception could be that they are purchasing the property with unclear title but I never know of that happening.

In Florida the HO who buys the house is liable for the past dues, fees,attorney bills, etc. It should be taken care of at closing by an estopple letter but if the title company forgets this step they or the new owners are liable. I believe this law just changed in 2008. Couldn't have happened at a better time since at least 5% of every subdivsion is in foreclosure or so it seems. Check your local statutes, you might find out you are covered.

Imagine if you are the new HO and you move in and get a bill. You can picture them calling their agent and the title company to get it straighted out. Our title insurance companies are paying them just to shut them up.

According to our management company the lien we file is right behind the first mortgage. The government is ahead of the first mortgage. So what will happen is the bank will sell the property. First they will pay any back taxes. Then they will reimburse themselves what they are due. Then if money is left over the HOA will get what they are due.

The lien will not stay in place through this process. If there is equity in the house you will see your money. If not, then you won't. But you will get a new owner in place and can then look forward to getting future dues. And by filing the lien, you do have your place in line. If you are in Texas that is ahead of a second mortgage.