Are you among the 74 million Americans who live in an HOA?
While HOAs can be awesome, homeowners have a responsibility to pay fees that keep the community in great shape. When homeowners fail to pay up, the board could issue a lien.
What should homeowners know about liens? Read on for our full HOA lien guide.
What Is an HOA Lien?
This is a legal claim that gets placed on a property by the homeowner's association when the homeowner fails to pay their dues or fees. It serves as a way for the HOA to recover the unpaid amounts. Once a lien is placed, it gives the HOA the right to potentially take further action to collect the debt.
HOA Lien Procedures
The procedures for placing an HOA lien often involve several steps. First, the homeowner receives a notice informing them of the overdue payments. If the homeowner continues to neglect payment, the HOA may then file a lien with the county recorder's office.
Once recorded, the lien becomes a public record, which could affect the homeowner's ability to sell or refinance the property.
Failure to Pay HOA Lien
If a homeowner ignores the HOA lien and still doesn't pay the overdue fees, the association may take legal action to enforce the lien. This could ultimately lead to foreclosure, where the property gets sold to clear the debt.
HOA Lien vs. Foreclosure
It's important to understand that an HOA lien is different from foreclosure, although they are related. While an HOA lien is a claim against the property for unpaid fees, foreclosure is the process by which the lender takes over the property. This possession is due to not paying the mortgage.
It's worth noting that an HOA lien has the potential to lead to foreclosure if the debt remains unpaid.
Does HOA Lien Affect My Credit?
Yes, an HOA lien can affect your credit. When a lien is placed on your property, it becomes a matter of public record. Credit reporting agencies can access this information at any time.
This could harm your credit score a great deal, which makes obtaining credit or loans much harder in the future.
How to Get Rid of HOA Lien
Getting rid of an HOA lien involves resolving the outstanding debt with the homeowner's association. This typically means paying the overdue fees plus any associated fines or late charges. Once someone satisfies the debt, the HOA should release the lien, which will then be removed from public records.
Every HOA Community Member Needs to Know About Liens
An HOA lien in Denver, Colorado, happens when the homeowner doesn't pay their dues or fees. It can lead to major consequences if the debt remains unpaid, including foreclosure. To avoid these consequences, homeowners should address HOA dues right away and work with the association to resolve any disputes or issues about payments.
Does your Denver community need help with management? At PMI Denver Metro, we're a father-son team that's been striving to uplift local communities for over a decade. Contact us to learn about our association management solutions.
