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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: HOA Lien obligation Posted by Rick Harmon on March 02, 2004 at 8:30 AM In Reply to: HOA Lien posted by Derek on March 02, 2004 at 6:34 AM : Ward, : I am in Phoenix. Our LLC took title to a property as Trustee in a THT. The beneficial interest was assigned to us personally the next day. Two weeks later, the HOA's attorney sent us a 'notice of lien' stating the previous owner owed $6k. The 'notice of lien' was recorded. Will this attach to the property or not? : Best Regards, : Derek ================================================ Yep, that one's never any fun. There may be an argument that the lien does not attach but I think it'll be defeated for two ways, one technical, one practical: 1) Most recorded homeowner assoc. CC&R's (and amednments) have provisions permitting the assoc. board or their agent to record a lien without the necessity of first obtaining a judgment. This makes it much easier for the assoc. to collect back dues than would the alternative because these liens can be foreclosed non-judicially. Therefore, due to the recorded CC&R's, I think the lien will attach regardless of who own's the property. 2) While the priority may be in question, I think the HOA is still in the "cat's seat" to get their money. Now just for fun, go ahead and do something that irritates the HOA Board or Mgmt company (like paint the exterior door without permission, etc.). Then, for kicks and giggles, ask for their cooperation in foregiving your debt. We'll all look forward to your future forum postings with your reports from HOA Hell. By the way, I was once president of a HOA during my early days of RE investing. (I was about 25 and had all the answers, you know). We had a problem owner who owed many months of back dues and so, absent provisions in our 1978 CC&R's to do otherwise, we had to obtain a judgment THEN record the abstract to lien the property. Several years later, that same homeowner was in foreclosure on his mortgage and I arranged to purchase his equity (without benefit of title insurance or much title research). When I went to resell the property escrow advised that I had to pay this lien and I told them how unfair that was, etc. I demanded to see a copy of the recorded lien and when I did it was clear that I needed to pay it... there was my signature: "R. Harmon, HOA president" Your humble servant, Rick Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Ward, : : I am in Phoenix. Our LLC took title to a property as Trustee in a THT. The beneficial interest was assigned to us personally the next day. Two weeks later, the HOA's attorney sent us a 'notice of lien' stating the previous owner owed $6k. The 'notice of lien' was recorded. Will this attach to the property or not? : : Best Regards, : : Derek : ================================================ : Yep, that one's never any fun. There may be an argument that the lien does not attach but I think it'll be defeated for two ways, one technical, one practical: : 1) Most recorded homeowner assoc. CC&R's (and amednments) have provisions permitting the assoc. board or their agent to record a lien without the necessity of first obtaining a judgment. This makes it much easier for the assoc. to collect back dues than would the alternative because these liens can be foreclosed non-judicially. Therefore, due to the recorded CC&R's, I think the lien will attach regardless of who own's the property. : 2) While the priority may be in question, I think the HOA is still in the "cat's seat" to get their money. : : Now just for fun, go ahead and do something that irritates the HOA Board or Mgmt company (like paint the exterior door without permission, etc.). Then, for kicks and giggles, ask for their cooperation in foregiving your debt. We'll all look forward to your future forum postings with your reports from HOA Hell. : By the way, I was once president of a HOA during my early days of RE investing. (I was about 25 and had all the answers, you know). We had a problem owner who owed many months of back dues and so, absent provisions in our 1978 CC&R's to do otherwise, we had to obtain a judgment THEN record the abstract to lien the property. Several years later, that same homeowner was in foreclosure on his mortgage and I arranged to purchase his equity (without benefit of title insurance or much title research). When I went to resell the property escrow advised that I had to pay this lien and I told them how unfair that was, etc. I demanded to see a copy of the recorded lien and when I did it was clear that I needed to pay it... : there was my signature: "R. Harmon, HOA president" : Your humble servant, : Rick Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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