Over 2 million homeowners contribute more than $4.4 billion in fees to maintain their lifestyle in Arizona's 10,000 community associations. In an HOA, annual fees and assessments contribute toward maintaining the community's common areas, which account for the high value of these properties.
When homeowners don't pay their fees on time, they impact the whole community, so HOA boards have far-reaching powers for enforcing fee payments. HOA liens are one of these measures.
Understanding HOA liens is important for anyone who buys property in one of these communities. Read on to discover four HOA lien facts and how they could affect you.
1. Homeowner Association Liens are Automatic
There are two main types of liens incurred by homeowners, i.e., voluntary and involuntary. A mortgage is an example of a voluntary lien, while HOA liens are involuntary.
In Arizona, a homeowner's association has an automatic lien against a property as soon as an assessment becomes due. An HOA board does not need to record a notice to perfect the lien.
Homeowners consent to this when they join the HOA. HOA liens include the following past-due amounts:
- HOA fees
- Late charges
- Attorney fees
- Collection fees
- Fines for rule infringements
2. HOA Liens are Super Liens
The amounts due to an HOA have super lien status in Arizona. They are superior to all other liens and encumbrances, excluding:
- Previously recorded liens
- First mortgages
- Real estate tax liens
- Other governmental charges
If the property is foreclosed upon, this means the HOA lien is paid after the above liens but before any other liens on the property.
3. An HOA Lien Can Lead to an HOA Foreclosure
If a homeowner has been delinquent on their payments for over a year or if the past-due amount exceeds $1,200, the HOA can foreclose on their property. Homeowners can face foreclosure even if their mortgage payments are up-to-date or if they've paid their mortgage in full.
An HOA can foreclose on a property regardless of the home's value or how many mortgages the homeowner has in place, but they must do so within six years, or the lien is automatically extinguished.
4. You Can Remove an HOA Lien
The only way to avoid having an HOA lien on a property is to settle the past-due amounts in full. If a homeowner falls behind on their payments, they can set up a payment arrangement to prevent foreclosure.
Homeowners can contest a foreclosure if the HOA records are inaccurate, but it's best to address these issues before the HOA foreclosure procedure starts.
Avoiding HOA Liens
Property lien management can be a complex undertaking with a high risk of infringing on homeowner rights and often falls outside the expertise of HOA board members. Enforcing an HOA lien on someone's property and managing HOA fee disputes can also be unpleasant and stressful for board members.
The team at PMI PHX SW can help you avoid these awkward situations. Our accomplished community association managers ensure timely fee collections to help homeowners stay up-to-date with their payments.
They're familiar with the correct procedures and legal aspects associated with liens and will help you navigate these situations if they arise. We are committed to helping your community thrive, so why not find out how we can help you today?
