Florida has about 3.9 million homes that an HOA governs. With this significant number of homes, HOA liens are more common. Homeowners often find themselves surprised that the HOA can place a lien and subsequent foreclosure lawsuit on their homes.
Understanding what an HOA lien is can help you avoid your HOA placing a lien on your Miami property.
What Is an HOA lien?
An HOA lien is a legal claim similar to a mortgage or contractor's lien. A lien gets placed on a property when the homeowner fails to pay the money owed to the creditor.
Florida HOA Super Lien
Typically, property liens get paid in the order with which they are placed on the property. This would typically put a mortgage first. However, Florida is one of 20 states where an HOA lien can jump ahead of all other liens.
How an HOA Lien Works
Each HOA in Miami has an individual or team of community managers. These individuals manage the finances and lien filings. The first step is to send a registered letter to the homeowner letting them know they owe fees.
If this letter goes unanswered after 45 days, the HOA can proceed with lien filing. The HOA has one year to file. After the filing, a homeowner can contest the lien.
HOA Foreclosure
Once the HOA management files the lien, they cannot immediately start foreclosure proceedings. They must wait 45 days after notifying the homeowner of their intention to foreclose. This gives the homeowner 45 days to make payment and avoid foreclosure.
Florida is a judicial state, meaning the foreclosure must go through the court. This is the same process that mortgage lender foreclosures go through. After waiting 45 days, the HOA will file a lawsuit in court to commence foreclosure proceedings.
Possible Charges in an HOA Lien
There are several charges that an HOA can include in the filed lien. A common fee is the HOA dues. However, it can also include assessments, late fees, interest charges, and attorney's fees. A property owner must know the HOA regulations. Otherwise, you risk incurring fee assessments for minor infractions. Hiring a property manager to handle property maintenance needs ensures you don't violate the HOA regulations.
The total value of this money owed gets included in the lien filing. This means that the amount owed can continue to increase as time passes and the fees go unpaid.
HOA Foreclosure Qualifying Offer
The homeowner still has hope of preventing foreclosure even after the lawsuit filing. They have one opportunity to make a qualifying offer to the HOA. The HOA can then accept the offer and cancel the foreclosure lawsuit.
This outcome is desirable, as no one wants to be the reason someone else loses their home. A qualifying offer ensures the HOA gets the money they are owed while keeping the homeowner in their home.
Avoid an HOA Lien
An HOA lien is not something to take lightly. Fees and assessments can quickly accumulate if a homeowner is not careful.
If ignored, a homeowner could find themselves facing foreclosure. As a rental property owner, this would mean losing the asset to your investment.
Speak with our team of knowledgeable property managers about maintaining your rentals to avoid an HOA lien.
