The homeowner’s association has rules and fees, and can foreclose on your home and put a lienA Lien is an encumbrance against the property, which may be voluntary or involuntary. There are many different kinds of liens, including a tax lien (for unpaid federal, state, or real estate taxes), a judgment lien (for monetary judgments by a court of law), a mortgageA Mortgage is a document granting a lien on a home in exchange for financing granted by a lender. The mortgage is the means by which the lender secures the loan and has the ability to foreclose on the home. lien (when you take out a mortgage), and a mechanic's lien (for work done by a contractor on the property that has not been paid for). For a lien to be attached to the property's title, it must usually be filed or recorded with a local county government office. on the property if you don’t pay.
Q: We have not paid our homeowner fees since early 2007 and I have received a Notice of Intent to Foreclose Lien from a local law firm. It states that if full payment is not received within 45 days of the date of the letter, the association will take legal action to foreclose my interestInterest is money charged for the use of borrowed funds. Usually expressed as an interest rate, it is the percentage of the total loan charged annually for the use of the funds. in the unit.
I understand that I owe the fees but can they require me to pay in full in 45 days? Can I try and settle for a lesser amount or agree to pay them over time? Can they go back 6 years to collect? I thought they could only go back 5 years. And, if I don’t pay, can the homeowner’s association take my home by foreclosing on it?
A: You’re probably going to need the help of an attorney, and fast. But with the information you’ve given us, we’d say you better be prepared to pay the association – in full! The homeowner’s association has rules and you haven’t paid them in 6 years. Other owners have had to pay more money to cover what you haven’t paid, and that isn’t fair.
You should know that many, if not most, condominium and homeowner association documents give the association the right to place a lien on the property of any homeowner that fails to pay his or her association dues. The teeth to that kind of a provision is that the association has the right to foreclose on the lien. When an association forecloses on the lien, it goes to court (or takes other legal action) to take titleTitle refers to the ownershipOwnership is the absolute right to use, enjoy, and dispose of property. You own it! of a particular piece of property. to the property or sell title of the property to satisfy the debt.
Each state has its own procedures that the association will have to follow and you will want to talk to an attorney as soon as possible so you know what to expect. In addition, the laws in your state may have certain limitations for collecting past due amounts but you’ll have to check what any of those limitations might be where you live.
You can try to negotiate with the association and see if it is willing to settle for less that the full amount you owe, or if you can pay what you owe over time. Remember, you’ve failed to pay them for six years and you don’t have much leverageLeverage is using a small amount of cash, say a 10 or 20 percent down payment, to purchase a piece of property. against them. We imagine the association board would have been much more responsive had you gone to them in 2007 and told them you’d like to work out a payment plan. Now, not so much.
If you don’t want to lose your property, you’d better start figuring out how you will repay the association. Your attorney can advise you on any other options you have.