When you buy one of Florida's 3.9 million homes located in an HOA, you stand to enjoy many benefits, such as shared amenities and a great community spirit. In return, you must pay HOA fees so that the HOA board can facilitate these conveniences.
HOA fees are an extra expense on top of your mortgage payments, so you must take them into account when buying a home in an HOA.
If you fall behind on these payments, the HOA board will follow the usual debt-collection procedures, like calling you or sending letters to remind you of your obligation.
Homeowners who don't comply may receive an HOA lien against their property. Find out more about what this is and how it affects you.
What Is an HOA Lien?
In the simplest terms, an HOA lien is a legal claim against your property for overdue HOA fee payments. Depending on the terms of the HOA's CC&Rs, the lien amount may include:
- Unpaid HOA fees
- Collection costs
- Late charges
- Interest
In cases where homeowners habitually contravene the rules of the HOA, the board may impose a fine, depending on the severity of the offense. They can add any unpaid fines to the lien, too.
Like property tax liens, HOA liens make it a lot harder to sell or refinance your house until you pay the lien in full. More importantly, if you don't pay the lien, the HOA can foreclose on the property, even if your mortgage payments are up to date.
How to Avoid an HOA Lien
An HOA board's priority is generating income from HOA fees to sustain the community.
So, the only way to avoid an HOA lien is by paying your HOA fees on time. If you find yourself amid unexpected financial difficulties and you can't pay your fees, you must get in touch with your HOA manager as soon as possible.
Under Florida law, your HOA may assist you by setting up a payment plan for the overdue fees.
The Florida Foreclosure Process
If you don't comply with the agreed payment plan or ignore your debt, your HOA has one year to commence legal action against you and foreclose on your home. This is always a judicial process in the state of Florida.
To avoid foreclosure, the homeowner may file a qualifying offer with the court. The judge will stay the foreclosure until the terms of this offer expire.
In Florida, HOA liens are considered super liens. That means the money from the sale of foreclosed properties goes toward outstanding HOA fees before paying the balance of the mortgage.
So, depending on how much you still owe on your mortgage, you could end up in serious debt if your HOA forecloses on your property.
How Can HOA Boards Avoid Outstanding Fees?
PMI Arrico Realty and Property Management can help board members avoid the hassles associated with HOA lien and property foreclosure procedures in several ways.
Thanks to our years of experience managing HOA communities, we're up to speed on the best ways to set up reasonable HOA fees, collect fees timeously, and follow the letter of the law regarding overdue payments.
Get in touch and sign up for a hassle-free future with professional HOA management services.
