Pro Question.....HOA liens - Posted by acw

Posted by acw on August 15, 2007 at 07:28:23:

Hey Thanks Guys,

I was considering purchasing these at the courthouse sale…but not sure what value they would be.

Title work shows that they have equity in the property so i figured that owning them would enable me to position myself with the owner to sell to me.

I will pose another question at the top for owning HOA’s liens…


Pro Question…HOA liens - Posted by acw

Posted by acw on August 13, 2007 at 17:31:23:

The County has an auction every 2 weeks that auctions off HOA liens…

What are the advantages of owning an HOA lien?

Thanks in Advance!


Re: Pro Question…HOA liens - Posted by Bill H

Posted by Bill H on August 13, 2007 at 19:05:53:

I am not sure I agree wholeheartedly with JT-IN. In some states HOA are considered like taxes and take priority over all other liens except property taxes. In others they are treated as he says…first in…first out…race to record.

The was about a year or so ago a maajor case in CA wher a homeowner lost a beautiful high end condo in the Lake Tahoe area over a HOA at a lien sale.

The state of CA has since changed the law and it is not supposed to happen this way anymore.

Where are you…check your local courthouse law library and find out what is correct for your jurisdiction.

Good LUck,
Bill H

Depends on the overall encumbrance - Posted by JT-IN

Posted by JT-IN on August 13, 2007 at 18:48:06:

There is either some advantage if equity exists… or no advantage if the property is over-leveraged. HOA encumbrances are customarily subordinated to all mtgs, unlike taxes owed. Liens are marshalled in the order they are received and recorded. Usually a delinquent mtg will obtain a judgment before a HOA… they are not known for being agressive to defend their turf, and most times this strategy works out for them.

So the answer is… it depends on the situation. Also, many HOA’s as a matter of principle do not sell the liens… some do but most don’t. They sorta don’t understand the rationale of selling the lien. Keep in mind that most of these directors or officers are residents themselves and their duty is not their first concern here. I have talked to some who think that they will get paid from the new owner, regardless of a foreclosure… not so, but not without some stern explaining from my Atty to theirs, then to commandaunt
of the Assn.


Also… - Posted by acw

Posted by acw on August 13, 2007 at 18:40:21:

Also…Is there an issue with Homestead excemption on HOA Liens?

Re: Depends on the overall encumbrance - Posted by Natalie-VA

Posted by Natalie-VA on August 14, 2007 at 07:38:12:

Hi JT,

Slightly off topic, but your post reminded me of a situation I had a few years back…

I bought a condo at foreclosure auction (remember, I’m in a DOT state with trustee sales). Normally, taxes and condo fees are prorated to the date of sale (not the same as the date of settlement).

Anyway, when we got ready to settle, I noticed that the condo association was nailing me for the previous owner’s delinquent dues. They weren’t even in the form of a lien yet…just delinquent dues. I argued that I would only pay from the date of sale. They argued that since they “provide services to the property” that they could pursue a mechanics lien if I didn’t pay. To make a long story short, the trustee ended up paying, since the proceeds were enough to take care of it.

I always wondered about their argument about “providing services to the property”. Logically, it makes sense, but I think that the process to file and collect on a mechanics lien is very specific and don’t know if they really could have done it.


No more than there is with a Mtg… - Posted by JT-IN

Posted by JT-IN on August 13, 2007 at 18:50:01:

None. You either pay or they can take you to task, regardless of Homestead exemption. Just as valid as any mtg obligation.

Re: Depends on the overall encumbrance - Posted by JT-IN

Posted by JT-IN on August 14, 2007 at 17:57:17:


I think that the Assn was off-base in their logic, but as is often the case, they run an escape proof asylum… and if you want to get clear title they hold out until someone pays… From a legal perspective they do not have a basis to collect if they have been properly named in the foreclosure action, as they just another creditor. I should qualify this, because as BillH noted, this could vary from state to state, but in all states that I am familiar with, and most of them are judicial sale and mtg states, that statement would hold true.

But again, the old guy or gal tends to sandbag the deal, and worse yet gives you that look as if you have been caught red-handed trying to STEAL from them… LOL. I’m sure you have seen it before.