4 ways condo & hoa liens work to get you paid
DESCRIPTION
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.TRANSCRIPT
4WAYS A CONDO OR HOA LIEN WORKS TO GET ASSOCIATIONS PAID
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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.
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.
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.
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.