Condo/HOA Assessment Liens attach to property to secure the payment of delinquent assessment payments. Just like mechanic’s liens, the devil is in the details when it comes to sending the proper notices, waiting the proper amount of time, and filing your lien correctly. In fact, some states do not require a lien for delinquent assessments to be recorded, and others don’t require the lien to be recorded to attach to the property, but do require it to be filed prior to any enforcement. The world of liens is a confusing and convoluted place, but luckily, Levelset is on your side to make sense of it, and get you paid. This post is not a step-by-step guide on how, or whether, to file in every individual state. There is not the space for that. Instead, we’ll provide you with some resources available to you online, and give a general discussion of what to do to secure payment.
There are many places throughout the internet in which you can find information about condominium and HOA assessment liens. This blog has heretofore been focused on mechanic’s liens. A quick google search will bring up hundreds of results.
Step 1: Do You Have the Right?
The first step in filing a condo/HOA assessment lien is determining whether you have the right. This, like a mechanic’s lien, typically involves 3 questions.
- Are you in the class allowed to lien according to the law. Each state words their lien law differently, but generally you must be a “community association” as defined by your state, and there must be a delinquent valid assessment.
- Was notice required, and if so…did you send it? Some states require notice to be sent to the property owner prior to filing a lien against his property. If the notice is required, it MUST be sent prior to liening the property.
- Would your lien be timely? While condo/HOA liens generally don’t have the stark cut-off dates typical of mechanic’s liens there is sometimes a waiting period imposed before the lien may be validly filed.
Step 2: Draft Lien with Care
If your state requires the lien to be recorded, you must make sure to comply with the formal requirements set out by the lien statutes. This can be confusing and may require research. Just like mechanic’s lien laws, these statutes are intricate, and MUST be complied with exactly. Incorrectly drafting your lien may render it invalid. Also, just like mechanic’s liens, one of the most frequent mistakes is the failure to properly identify the property. A legal property description may be required, rather than just the address and/or unit number of the property you wish to lien.
Step 3: Record Your Lien
This step seems straight forward, but may present unforeseen difficulties. If recording the lien is required in your state you face two potential pitfalls at this stage. One: You must make sure that the lien is recorded in the proper office. Each state designates where the lien should be filed, and you must comply with that requirement. Two: You must follow the recording requirements of the office in which you need to record the lien. Margins, paper size, font, etc., can all be strict requirements that if not met can cause your lien to be rejected. Also, note that certain counties may take as long as several weeks to file a document that they receive.
Step 4: Notify Parties and Enforce
Once you lien is recorded, many states require notice to be sent to the property owner, and sometimes other parties. If this is a requirement in your state, you must send the notice in the manner required, and within the amount of time required by the statute. As in the other steps, failure to comply with these requirements may invalidate your lien. Finally, you can enforce your lien. If you lien the property and do not receive payment within a certain amount of time, the association may foreclose on the lien to satisfy the delinquent assessment. The procedures and time frames by which this must be accomplished vary from state to state.