A lien form varies from state to state. In addition, there are specific requirements which must be followed for filing liens. To avoid any unnecessary, costly litigation, resulting from errors in preparing and filing the lien, I strongly advise the HOA to retain an attorney to file any necessary liens. Also keep in mind that attorney fees can be collected in addition to the lien amount (in most states), so the HOA will not pay any attorney fees out of pocket once the lien has been paid.
You work with your association's attorney to follow the guidelines written in your governing documents to collect the unpaid assessments. Following the documented steps prior to filing a formal lien are required, in order to protect the status of your lien.
One of the final steps will be to officially file a formal lien, which will cloud the unit's title and be reflected on the owner's credit report.
A final step may be to sell the property in order to recover the money owed.
AnswerA lien is a court generated document that is recorded in the land records to notify any potential buyers or lenders that another entity has an interest in the premises. Generally, the creditor must sue the debtor in court and win. In this case, the plaintiff would be the HOA. If successful it can then request a judgment lien. That lien is recorded in the land records. This process may vary in different jurisdictions.
An HOA can record a Notice of Unpaid Dues in the land records without going to court but not a lien in most states unless it completes the civil court procedure.
Best practices dictate that you work with the association's attorney to identify the proper lien to file, and to follow the process required to file such a lien. An improper lien, filed improperly will give an owner an 'out'.
It would be improper for an HOA to file a lien if there is no legal reason to file such a document.
Best practices dictate that you work with your association's attorney, who can review your governing documents and determine the form of lien to file against an owner's title, when the owner does not pay assessments. Lien forms differ from state to state and from type of lien to type of lien; hence, the suggestion that you seek the advice of your attorney.
In this case, apparently, the bank is the owner. So yes, the HOA can file the lien against the bank's ownership of this unit.
The association counsel that filed the lien for the association can answer your question.
Best practices dictate that you work with the association attorney to prepare and file any lien on the part of an HOA. An improper lien, or an improper filing of a lien can be used by the owner to escape the action.
A lien form varies from state to state. In addition, there are specific requirements which must be followed for filing liens. To avoid any unnecessary, costly litigation, resulting from errors in preparing and filing the lien, I strongly advise the HOA to retain an attorney to file any necessary liens. Also keep in mind that attorney fees can be collected in addition to the lien amount (in most states), so the HOA will not pay any attorney fees out of pocket once the lien has been paid.
Your association's attorney can help you find the appropriate lien form. It is key that you follow your governing documents' collection process -- detailed in a properly adopted, and filed, amendment or By-law -- in order to assure the association's success in collecting monies owed by the owner. If you chose the incorrect lien form, or if the association does not have the authority to file a lien, or has not followed the pre-filing steps required in your governing documents, the owner can challenge the lien and escape this action.
The HOA only files a lien when all other attempts to collect monies due have failed. An owner who ignores notices from the HOA to collect money cannot later claim to be unaware of fines, since monies due and fines are detailed in the governing documents.
A homeowners' association would file a labor and materials lien entitled Assessment Lien. See the HOA covenants for more information on liens. I would recommend that the HOA retain a real estate attorney to prepare and file the liens.
A lien clouds title to a property, which means that the property owner may not successfully transfer title to another owner until the lien is satisfied. As buyer, you are entitled to a 'clean title' to the property. The association may not file a lien against a new buyer upon purchase, since the new buyer is not obligated to pay assessments until the date of purchase and beyond.
Generally, the association will work with its counsel to file a lien on your property that you own within the association.