4 ways condo & hoa liens work to get you paid

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4 WAYS A CONDO OR HOA LIEN WORKS TO GET ASSOCIATIONS PAID PUBLISHED BY

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Post on 11-Nov-2014

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When a property or unit owner fails to pay dues or assessments, associations and communities suffer. One way to collect on these unpaid amounts is to file a lien against the property in arrears. But, how exactly does this work? Will it get the association paid? This presentation explores the 4 top ways that these lien claims work to get the associations paid.

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Page 2: 4 Ways Condo & HOA Liens Work To Get You Paid

1Liens Encumber The Property & Get Attention

The Lien document is recorded with land records and will appear on a title search of the property. As a practical matter, this means the property will not be sold, refinanced or otherwise transferred without the lien claim being resolved.

This gets the owner’s attention, even if the owner isn’t immediately planning to sell, transfer or refinance.

Page 3: 4 Ways Condo & HOA Liens Work To Get You Paid

2A Lien Prioritizes The Association’s Debt Above Others

Property or unit owners are sometimes behind on dues or assessments because they simply can’t afford to pay them. Perhaps the owner is even facing foreclosure or bankruptcy.

Lien claims help in these circumstances, sometimes elevating the association’s debt above other debts (including existing mortgages). This means the association gets paid first when the property is foreclosed upon and sold.

Page 4: 4 Ways Condo & HOA Liens Work To Get You Paid

4Liens Help YouAvoid Nasty And Expensive Lawsuits

When a owner fails to pay dues or assessments, an association has just two choices: File a lawsuit, or file a lien.

Lawsuits are expensive and take a long time. Liens are preferred even if litigation is eventual, as most states allow condo and homeowner association liens to be judicially foreclosed upon without a full legal proceeding.

Page 5: 4 Ways Condo & HOA Liens Work To Get You Paid

17A Lien GivesYour AssociationNeeded Leverage

Let’s get down to the big point here. All of these “ways” a lien works boils down to this one: A lien creates leverage.

It creates lots of leverage, and the leverage can come in many forms. Regardless of form, however, the result is the same: payment.