When Can An Association Place A Lien On A Property For Delinquent Assessments?
The timeframes kind of kick in. With an HOA, you have to give them a 45 day notice before you can even send out the next letter which we call a lien letter that says we are going to lien your property and we can foreclose on that lien within 45 days. So the owner has a 45 day window to catch up. If they catch up and the association has placed that lien before that timeframe then the association has not only filed an invalid lien that they can’t enforce and that they can’t foreclose upon but they also exposed themselves to a lawsuit for slander in title which basically means that if you place an illegal encumbrance on a property that is not justified then a homeowner has recourse and can actually recover damages based upon that. So you have to be careful if you are an association and you should consult with association lawyers before you start to lien properties.
With a condominium, you can send a 30 day notice out and you can’t immediately when sending the notice out but you can foreclose 30 days after. It’s 30 days after you some type o notice and then you actually have to make sure that 30 days run from the receipt of the notice. So, in those cases, then you can lien it and then the duration of the lien is kind of a separate issue. For condominium associations it’s one year. So the association would have one year to file a suit on that. Once it’s been filed for HOAs, it’s not quite as clear cut but most people agree that it follows the statutes for other types of liens and you have 5 years that the liens stay on and then you have to file another one before you can foreclose on that and then there are statute of limitation issues that pop up as well.
But before they can file a lien the association has to notify the owner and then give them those timeframes that I mentioned and give the owner an opportunity to catch up prior to that being filed and foreclosed upon.
What Are The Threshold Requirements For seeking Delinquent Assessments Through Judicial Or Non-Judicial Methods?
The thresholds are what I just mentioned and they are the notices or the demands that are sent by the association or the association’s agent which would be the attorney. Usually the agent should be the attorney. So the association needs to keep ledgers of the assessments that were imposed and they need to credit any payments that were made and they need to check and see if there is a basis within the governing documents that allow them to collect late fees, allow them to collect interest. The statute also allows for those under the HOA or condo but you also need to check the governing documents to see what is legitimately allowed to be placed within those ledgers for collection and as I stated, you have to give credit for any kind of payments that are made and then typically there is a ban that’s made but for purposes of legal thresholds, if you are in an HOA, you need to send a demand for 45 days saying we are going to lien your property if you don’t pay within 45 days.
When the 45 days run, you send another one saying we are going to lien your property now and here is a copy of the lien that we have and we are going to record and we are going to foreclose on that lien if you don’t pay us within 45 days. Once those lapse as a condition as opposed to a threshold, then legally it’s a condition precedent. If that condition precedent has been met then the association has a right to file suit. For condominiums, it’s one 30 day notice saying we are going to lien your property and foreclose on that lien if you don’t pay within 30 days. Once that’d done and you’ve met the condition precedent there then you can go ahead and you can foreclose.
Now once you get in to litigation and obviously there are a lot of rules that need to be followed as far as what kind of proof is required. There are certain times where it can go to summary judgment where you have to have affidavits and ledgers that are submitted as attachments to the affidavit. Other times, you need trial and you need to have the custodian of the records testify as to the delinquencies. So there are thresholds in litigation that apply as well but pre-litigation, it would include those demand letters.
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