Living in an HOA offers several benefits, like access to desirable amenities, a sense of community, and good property values. It also comes with extra costs in the form of HOA fees and assessments.
Homeowners must pay these fees to ensure the smooth running of their community and the maintenance of the amenities. If homeowners don't pay these amounts promptly, the HOA can place a lien against their property and even foreclose on their home.
Read on to discover how a homeowner association lien works in Utah.
HOA Lien Basics
An HOA lien applies to unpaid HOA fees. It is like a mortgage lien, except it's involuntary.
All liens are deducted from the proceeds when a homeowner sells their property or during foreclosure.
Aside from paying their HOA fees, residents in an HOA must also comply with certain rules that preserve the aesthetics of the HOA and ensure all homeowners benefit equally from the onsite facilities.
Homeowners who do not abide by the association's CC&Rs may be fined or lose access to these facilities. These fines become part of the total fees owed by the homeowner and may also cause the HOA to place a lien against their property.
The HOA Lien Process
All residents in a community must pay their fees on time every month or annually. If they don't, the HOA can take the following steps:
- Add late fees to past-due amounts
- Calling the HOA homeowner about their non-payment
- Sending a letter of demand for payment
If these methods prove fruitless, the HOA may record a lien against the homeowner's property, the HOA must notify the homeowner of their intention in writing.
Upon receipt of this correspondence, the homeowner may request a statement of the amount owing.
The only way homeowners can go about removing an HOA lien is by paying the full amounts owed unless they can prove that the HOA is at fault, i.e., their records are incorrect, or if the HOA does not follow the correct procedure.
For instance, if the homeowner requests a statement and doesn't receive it within five days, the lien is extinguished.
HOA Lien vs. Mortgage Lien in Utah
A lien clouds a property's title and can create difficulties in the home sale process. Unresolved liens can lead to an HOA foreclosure, even if the mortgage payments on the home are up-to-date.
It's rarely in the best interest of an HOA to foreclose on a homeowner's property.
HOA liens do not have super-lien status during a foreclosure sale in Utah. This means the HOA receives their outstanding amounts after the mortgage is paid.
Avoid HOA Liens in Your Community
As a part of your community's HOA board, you want to ensure that your residents enjoy a harmonious community feel and stable property values. Precise administration, accurate record-keeping, and prompt fee collections help you avoid the unpleasant task of imposing HOA liens on your homeowners.
PMI Reliant can assist you with the above services and more. We offer a comprehensive range of HOA management services, and we are part of a community management network that takes care of over 650 properties nationally.
If you do need to undergo the HOA lien process, we can assist you with guidance about the correct channels to follow. Our experience, expertise, and courteous service are an asset to any homeowner's association.
Get the help you need to establish and maintain a thriving HOA today.
