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Subject: Your opinion regarding lien
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Author Messages
KarenT
(Washington)

Posts:248


05/28/2008 2:18 PM  
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?
EllenS1
(Florida)

Posts:1148


05/28/2008 2:21 PM  
Did the hoa prepare the lien or an attorney? Whatever , there should be reason to hand deliver the lien. A RECORDED copy of the lien by mail, either certified or regular mail.
CharlesW1
(Georgia)

Posts:826


05/28/2008 4:26 PM  
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.

Charles E. Wafer Jr.
BrianB
(California)

Posts:2820


05/28/2008 5:44 PM  
pay a neighbor kid $5 to "take this to the mean man in the yard over there."

MicheleD
(Kentucky)

Posts:4491


05/28/2008 5:59 PM  
Posted By BrianB on 05/28/2008 5:44 PM
pay a neighbor kid $5 to "take this to the mean man in the yard over there."






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!

EllenS1
(Florida)

Posts:1148


05/28/2008 6:41 PM  
Posted By MicheleD on 05/28/2008 5:59 PM
Posted By BrianB on 05/28/2008 5:44 PM
pay a neighbor kid $5 to "take this to the mean man in the yard over there."



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!

Thank you Michele. I have never heard of a hand delivery of a lien.




BradP
(Kansas)

Posts:2640


05/28/2008 7:06 PM  
mail it, it is cheaper than paying a kid $5....
GlenL
(Ohio)

Posts:5491


05/28/2008 7:40 PM  
Posted By BradP on 05/28/2008 7:06 PM
mail it, it is cheaper than paying a kid $5....



But not as much fun. In the small town I grew up in it was posted NO PARKING in front of the bank. Well my mom would park there on her way to work to get money for the Kroger's she worked at. They would call her at home and ask that she pick-up money for them on her way in. Well the local Police Chief kept threatening her that he would give her a ticket if she didn't stop it. One day he finally got up the nerve to do it but chickened out from putting it under the wiper and left it on the front seat.

Studies show that 5 out of 4 people have problems with fractions
KarenT
(Washington)

Posts:248


05/30/2008 7:35 AM  
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.
DwightT
(Idaho)

Posts:664


05/30/2008 7:44 AM  
Well, sorry to tell you this, but that probably means that you will get nothing. In a foreclosure, the HOA gets in line behind the mortgage company. If after all the dust settles and the mortgage company takes possession of the property, the lien will be wiped out. If they sell the property for more than then amount needed to pay off the mortgage you might get paid, but more than likely they will only sell it for enough to cover their costs, if that. You are probably going to end up writing this one off as bad debt.
KarenT
(Washington)

Posts:248


05/30/2008 1:46 PM  
Why would the lien be wiped out?? If we filed it before the filed the Notice of Default?
EllenS1
(Florida)

Posts:1148


05/30/2008 2:00 PM  
I think the point is if there isn't enough equity in the house to satisfy the lender for the mortgage balance and their attorney expenses you may not be able to collect at that point. The lien would have to be paid off and cleared at some point in time as it is a lien against the property and any buyer would want to purchase with clear title. I would assume the title company or attorney who handles the closing would insist the lien be cleared.
DwightT
(Idaho)

Posts:664


05/30/2008 2:19 PM  
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.
HaroldS
(Arizona)

Posts:906


05/30/2008 2:34 PM  
Karen - It's not a first come, first served situation. The mortgage company already had a lien ahead of yours. There could even be a second mortgage holder with a lien. There could be tax liens. Liens have pecking order. And frequently those further down don't get anything.
More than likely, the home is worth less than what is owed, and even the mortgage holder might not get their full lien paid, so there will be nothing left for other lien holders.
It is on the news out here almost every night. The most HOAs can hope for is that the property sells quickly so another owner will be on board to hopefully begin paying the current fees.
Until then, you will need to raise the fees for the remaining homeowners to capture what you need to operate.
EllenS1
(Florida)

Posts:1148


05/30/2008 5:22 PM  
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.
EllenS1
(Florida)

Posts:1148


05/30/2008 5:28 PM  
I'm not sure what you mean..."the title passes to them so there aren't any funds left to pay off any liens." It's just confusing. Title passing has nothing to do with the value of the property as I see it. Or are you saying the lender doesn't care what it sells for as long as they get their investment back?
KathyT2
(Florida)

Posts:22


05/30/2008 8:42 PM  
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.
KathyT2
(Florida)

Posts:22


05/30/2008 8:42 PM  
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.
KirkW1
(Texas)

Posts:1665


06/04/2008 8:56 PM  
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.
KathyT2
(Florida)

Posts:22


06/04/2008 9:27 PM  
do you have Texas Statutes on line? We can look everything up on line and in Florida its pretty cut and dried.
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