More than four in five homes built in 2022 belonged to a homeowners' association, according to the United States Census Bureau. An HOA collects dues and fees, also known as assessments, to cover various expenses.
What happens when those dues and fees go unpaid, though? Does the homeowners' association have the power to take your home?
HOA liens allow homeowners' associations to enforce their rules and collect payments. While an HOA lien represents a significant escalation from the HOA, the HOA can use such a lien to recoup losses.
Need to know more about how HOA violations turn into liens? Keep reading for more.
HOA Lien Basics
When you fail to pay HOA dues or assessments, your homeowners' association can place a lien on the property to compel payment. A lien indicates that a creditor has an interest in a piece of property and must receive payment before that property can change owners.
In extreme cases, an HOA foreclosure occurs. This process begins when an HOA sees no means of recouping the dues or assessments except to take possession of the home.
In Idaho, the HOA can initiate foreclosure over any type of lien. An HOA special assessment can lead to a lien and subsequent foreclosure in the same way as regular HOA dues.
How to Avoid HOA Liens
Avoiding HOA liens requires homeowners to pay their dues on time. If you see a lien on the horizon, take these steps.
Review Covenants, Conditions, and Restrictions
An HOA's CCRs outline what charges an HOA can and can't leverage. If you feel an HOA lien shouldn't apply to your situation, review your CCRs. You may find that the HOA cannot apply HOA fees in your case.
Avoid HOA Rule Violations
HOA violations sometimes lead to fees and assessments. Avoid breaking HOA rules to avoid later issues.
How to Get Rid of an HOA Lien
If you have an HOA lien, you can get rid of it by paying any dues or assessments owed. You may need a different option, though.
Reach out to the homeowners' association and ask if you can set up a payment plan or partial forgiveness. Many will work to find an equitable solution.
A homeowners' association does not want to own your home in most cases. Renting out a home or trying to sell it adds stress for the HOA, the property management association, and everyone else involved. As this will distract from best HOA management practices, they'll often prove eager to find another path.
Managing Liens
Dealing with an HOA lien doesn't have to take up all your time. Contact your homeowners' association or its management company, lay out your situation, and try to find an equitable solution. Don't put off handling the debt or you could end up in foreclosure.
If you're on the other end of the desk and having difficulty handling liens, assessments, and other HOA accounting issues, contact PMI Treasure Valley. We tailor our operations to the needs of each individual HOA and avoid one-size-fits-all solutions. We handle accounting, vendor coordination, maintenance, and other issues.
