Lien Foreclosure: An HOA’s “Nuclear Option”
When a person buys a home that is covered by a homeowners’ association agreement (HOA), they implicitly accept the association’s right to collect monthly dues and what are known as assessments. They also agree to be bound by the rules of the association, which can govern everything from parking to use of any common areas. However, if a tenant ignores those rules, or fails to keep their financial obligations current, the HOA does have the option to place a lien on their home – and foreclose on it, should it become necessary. There is a procedure that must be followed for a successful lien foreclosure, but it is still a potent tool in the HOA’s arsenal.
Many Options Before Foreclosure
The reason that lien foreclosure is seen as the so-called ‘nuclear’ option is that there are so many possible ways to try and collect on any owing money before resorting to essentially evicting the tenant. If reminders and requests do not get the obligation paid, the HOA can try to restrict the tenant’s privileges, such as barring them from any common areas or discontinuing any kind of variance they had previously sought. However, Florida HOAs have fairly broad powers, and unless a certain behavior is contrary to public policy, they can take significant measures to force compliance with the covenants, conditions and restrictions (CC&Rs).
Even if an HOA does decide to make and enforce a lien, the homeowner must be served beforehand with a letter giving one last chance to pay all the amounts that are due, and providing 45 days in which to do so. The HOA can, in its demand letter, seek payment of special assessments, any attorney’s fees or costs, late charges, and interest. If the homeowner tenant pays the balance (or the HOA and the homeowner are able to come to an understanding), the matter will be settled, but otherwise, the lien will go ahead.
To Get The Debt Paid Off
If an HOA is put in a position where foreclosing on its lien is its only option to try and compel payment, they must do so judicially. Foreclosures can be judicial (filed as lawsuits, and progressing through the court system) or non-judicial (usually, a notice of foreclosure is filed at the county recorder’s office), but in Florida, all HOA foreclosures are judicial – generally, they are carried out in the same way that a mortgage foreclosure is carried out by a bank or other lender. A Florida court will approve or deny the foreclosure, either after a trial or via summary judgment.
The homeowner may make a qualifying offer on the property (unless they are in bankruptcy proceedings, or trial on a contest of the lien is supposed to begin within 30 days), but it is crucial to understand that the HOA is not required to accept it. Many do, as they may believe it is the best opportunity to get the homeowner to pay any percentage of the debt they owe, but there is no obligation for the HOA to accept. If the homeowner does file for bankruptcy, pre-filing debts to an HOA can be discharged in Chapter 7, but any fees assessed post-filing must still be paid.
Contact A Tampa HOA Lien Foreclosure Attorney
HOAs want homeowners who pay their obligations on time, though many are willing to work with tenants to fall behind. It is incumbent on both homeowners and their associations to try and reach an accord, though the HOA has options should a homeowner decline to be part of a solution. Attorney Alicia Seward has experience in these types of cases, and if you are experiencing this situation, contacting a Tampa lien foreclosure representation attorney is a good idea. The Seward Law Office is ready to try and assist you. Contact our offices today at 813-252-6789 to schedule a consultation.
Resources:
govinfo.gov/content/pkg/USCODE-2018-title11/pdf/USCODE-2018-title11-chap5-subchapII-sec523.pdf
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0700-0799/0720/Sections/0720.308.html
