HOA communities have become increasingly popular, and about 26% of people in the US currently live in one.
Those living in such communities can reap various benefits, but they must also follow rules and policies set by the HOA. The HOA board has various responsibilities and will work to make their community a better place to live. Residents who don't follow the rules, however, could face reprimands.
In this guide, we'll explain what an HOA lien is and how to deal with one. Keep reading for more.
What Is an HOA Lein?
Anyone who moves into an HOA community immediately becomes a member. When you do this, you'll start receiving the benefits the HOA offers, but you also need to follow the relevant rules and regulations.
All HOAs have fees that residents must pay, and when someone fails to do so, the HOA board may take action. One of the most common (and most effective) approaches is for them to place a lien on the offender's home.
How HOA Leins Work
An HOA lien is a legal claim of ownership that an HOA can place on a resident's property. The resident must pay off any fees they owe before the association will remove the lien. Failure to pay the HOA lien can lead to further problems, and the association may foreclose on the property.
Does an HOA Lien Affect My Credit?
This is possible, depending on the HOA lien procedures your association uses. Some HOA boards don't report missing or late payments to the credit reporting bureau. If yours doesn't, then this won't impact your credit score.
If you fail to pay off the lien and the HOA forecloses on your home, however, your credit score is likely to take a hit. The exact impact it has can vary but typically depends on what your credit score was before the foreclosure.
How to Get Rid of an HOA Lien
In some cases, an HOA lien will automatically attach to a property. In others. an association will need to record it with the county recorder's office.
Once in place, the lien will remain there until you pay back any missing dues along with other related fees. These typically include interest, late fees, attorney fees, etc.
If you pay everything you owe, the association will remove the lien. In most cases, they need to do this within 21 days of the fees being paid.
HOA Lien vs. Foreclosure
If you don't pay what you owe, the HOA may foreclose on the lien. This is similar to a standard foreclosure. It takes more time and money to resolve this than a lien, so ideally, you don't want to let it get to this point.
Avoiding HOA Liens
An HOA lien can be very inconvenient and costly. Ideally, you want to make sure you pay all HOA fees on time to avoid such situations. HOAs themselves can often struggle to keep up with their responsibilities, so working with an association management company may be ideal.
PMI Values Your Casa is part of the PMI franchise; one of the largest property management firms in the US. We serve individuals and HOAs in Cypress and surrounding communities. Take a look at our association management page to see how we can help your community.
