UPDATE: We apologize for any inconvenience, but levelset no longer offers assessment lien filling as of 2013. While you can use Levelset to file a mechanics lien for construction projects on a condominium unit and/or building, Levelset does not file HOA liens for unpaid dues.

What exactly is an assessment lien, and how can it help?

Liens for delinquent assessments are a powerful tool to make sure that dues and assessments get paid.  Just like with mechanic’s liens, an assessment lien encumbers the property so that the property cannot be sold, refinanced, or transferred without satisfying the lien.  Further, the lien may generally be foreclosed either judicially or through a trustee’s sale: that is, the property may be sold to satisfy the delinquent assessment.  This provides the property owner with a strong incentive to pay the assessment.  If he does not, he risks losing his property.  Additionally, many states allow the costs of collection, attorney’s fees, interest, and late charges to be added to the lien total.

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Also, having a lien on the property secures the debt.  If a party is not paying dues and/or other assessments because he is filing or contemplating filing for bankruptcy protection, having a secured debt puts the association in a better position than any creditor who only has unsecured debt.  This is similar to how a mechanic’s lien secures debt in a bankruptcy proceeding.

So, this is a great tool to get associations paid.  But what can the lien be filed for, and how and when does one go about getting this protection?

The answer to the first question is relatively simple.  In the vast majority of states an assessment lien arises from and secures delinquent assessments, whether they are “regular assessments”, or “special assessments” as long as the assessments are validly assessed by the association.   Regular assessments are equivalent to “dues” to the association, and special assessments are one-time assessments levied to enable the community association to perform its obligations under its governing documents.  Special assessments may generally include an emergency assessment.  After this point, the question of what may or may not give rise to a condo/HOA lien, and what may be included in the lien amount varies by state.

The determination of how to get the protection of the lien, and when, is something that must be determined on a state by state business.  Notice requirements vary by state as do filing procedures and waiting periods.