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An Overview of HOA Lien Foreclosures

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Most neighborhoods and apartment complexes in Florida require homeowners to pay monthly fees and assessments to a homeowners’ association (HOA). If one fails to pay those fees and assessments, the homeowners’ association may elect to obtain a lien on the property and could initiate a foreclosure. 

Our experienced HOA foreclosure attorneys are here to provide insights into HOA liens and how they can lead to a foreclosure. 

What is a Homeowner’s Association?

A homeowner’s association (HOA) is a legal entity with the purpose of managing and maintaining the neighborhood. HOA communities may be made up of single-family homes, townhomes, or condominiums. The members are the property owners within the neighborhood or community. The main functions of the HOA is to collect assessments and fees, and to enforce the rules of the community. 

Homeowners that reside in a community with an HOA are required to pay a fee which contributes to the association’s maintenance of the community. This “maintenance” fee will often cover landscaping, security, and community facilities. These fees also pay the salary of any HOA employees. The HOA develops a budget and divides the expenses by the number of homes in the community. Homeowners must meet their monthly fee on a fixed schedule set by the HOA, usually on a monthly basis. 

In the case where an HOA’s reserve funds do not cover the cost of a major repair, the association may levy assessments for one-time expenses. 

HOA Liens

If a homeowner becomes delinquent in paying the fees and/or assessments, the HOA has the power to place a lien on the residence. Once the homeowner becomes delinquent, a lien is automatically placed on that property, usually as the date of the assessments/fees became due. 

Depending on the terms in the Covenants, Conditions, and Restrictions of the community, the homeowner could be accountable for charges. These charges include:

  • Late Charges
  • Costs of Collection (Attorney Fees)
  • Interest
  • Unpaid Assessments

A lien on a property could not only delay the homeowner’s ability to sell or refinance the home, but could also lead to a foreclosure and the loss of the home. 

A Foreclosure on HOA Liens

There is a common misconception that the association cannot foreclosure if the homeowner is current with their mortgage payments. However, it is the association’s right to pursue foreclosure regardless of whether the homeowner is up to date on mortgage payments. Since mortgages in Florida are foreclosed judicially, the HOA will file a lawsuit in court to foreclose its lien. 

According to Florida law, the HOA cannot initiate a foreclosure until 45 days after the homeowner has been provided notice of the HOA’s intention to foreclosure in order to collect the unpaid amount (Fla. Stat. Ann. § 720.3085(5)). 

During an HOA foreclosure, the homeowner may file a “qualifying offer” with the court to pay all amounts secured by lien. The HOA must consider this as an option as long as:

  • The condominium unit is not subject to a mortgage foreclosure
  • The homeowner is not in bankruptcy proceedings
  • The trial for the lien foreclosure action is not set to start within 30 days

Once this offer is officially filed, the foreclosure will be postponed for the period of time stated in the qualifying offer, so the homeowner can submit payment (not to exceed 60 days). If the homeowner does not abide by the terms of the offer, the stay is lifted and the HOA may proceed with the foreclosure.

Next Steps

If a homeowner is facing an HOA foreclosure, it is imperative to consult with one of our knowledgeable Miami foreclosure attorneys to achieve the best possible outcome. Contact Graham Legal, P.A. today for a free no-obligation consultation!

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