What's an HOA Lien?

What's an HOA Lien?

You're not alone if you live in an HOA in Texas. The Lonestar State has one of the highest amounts of HOA communities in the country. Many terms that are used during HOA meetings that might be confusing to keep on top of.

One of the terms you might come across is an HOA lien. This article will discuss the basic information about what an HOA lien is and how to handle it when running an HOA community.

What Is an HOA Lien?

A lien is a legal claim or hold on property. There are many types of real estate liens, including:

  • Property tax liens
  • Mortgage liens
  • Judgment liens
  • HOA liens

HOA homeowners are obligated to pay monthly, quarterly, or annual dues to their community. They may also be required to pay HOA fees if they violate any of the community rules. An HOA lien can get put on a property if the homeowner has unpaid violations or dues.

The goal of an HOA lien is to compel homeowners to pay their overdue fees. This type of lien is the most effective way for an HOA to collect the money they're owed.

HOA liens can make it very challenging for homeowners to sell their homes. In some cases, it can be impossible for them to do so. An HOA lien may even result in a foreclosure of their HOA property.

How Does an HOA Lien Work?

An HOA lien automatically attaches to the delinquent homeowner's property. On some occasions, the HOA will need to record the lien with their county recorder's office. Filing the lien with the county recorder's office serves as a public notice that the lien exists.

Homeowners may be required to pay other fees on top of what they owe the HOA to get the lien lifted. The extra fees depend on their specific HOA's governing documents. Some examples of additional late fees can include:

  • Interest
  • Legal fees
  • Late costs

The HOA will need to record that the homeowner has paid their debt in full with the county recorder's office. HOAs usually have 21 days to file the release of the lien, but it depends on local and state laws.

What Happens Next?

HOA liens are typically sufficient enough to get a homeowner to pay their overdue fees. There may be cases when the HOA will need to foreclose on the lien to satisfy the homeowner's debt. There are two main types of liens HOAs can use to foreclose on a property:

  • Judicial foreclosure
  • Non-judicial foreclosure

The HOA can continue making mortgage payments on the property if the original owner stops paying them.

PMI Nortex Properties Can Help You Manage Your HOA Community

It can be challenging and overwhelming to issue an HOA lien on one of your community members. Working with a property management company that's experienced with HOA rules and HOA evictions can help make the process easier.

That's where PMI Nortex Properties comes in. Our team of property managers has extensive experience with HOA communities in the Dallas area. Contact us to book a meeting with one of our specialists.