Homeowner Association Non Payment of Dues

[Benita Diamond]

Bedford, New Hampshire
I am secretary to a small Homeowner Association. There are 25 lots w/24 owners. This is the first year we have collected assessments for the HOA. Invoices were sent out and only two lot owners have not paid their dues. We do not have a lawyer and would like to avoid retaining one if possible. Need to know what we have to do to place a lien on the properties of the two non-payers. Our Declaration of Covenants, Articles of Agreement and By-laws address the payment issue and the consequence of non-payment. Can you advise?

 

[HomeGuru]

The worst possible thing the HOA could do is not hire an attorney.

 

[Benita Diamond]

Reply to Home Guru re: non payment

Your advice was narrow at best.........Our board (there are 3 of us)realizes that eventually we may need to hire a lawyer. Our funds, however, do not afford us the luxury at this point. We are new, we have only collected dues once, there are only 24 homeowners in which two have not paid. To retain a lawyer we have to put down $500 retainer fee then be able to pay $150 per hour to discuss HOA business. Please advise.....do you or does anyone reading this thread know how my board, w/o lawyer intervention, can go about placing a lien against a property for failure to pay HOA assessment fees? Again, I live in New Hampshire. Thank you.

 

[HomeGuru]

I repeat and stand behind my original post.

There is no excuse for no money. Special assess each owner in order to raise the funds to hire an attorney.

I will tell you a narrow story. I represented a homeowner where the HOA placed a lien on their property due to non-payment of HOA fees. The HOA did not use an attorney and did it themselves. The HOA did not follow the proper remedies and procedures, my client was not afforded due process and the high and mighty HOA got hit with a $100K lawsuit. In addition, the Board members got sued as indivduals AND as Board members of the HOA. There was no BOD liability insurance. Later the HOA members hired their own attorney and sued the Board for mismanagement, dereliction of duties, deception, collusion, unfair business practices etc. Four years later, the issues were resolved. but during the four year period, the project had a stigma and no one could sell their homes.

So in this narrow example, a HOA could be in worse shape without legal counsel.

 

[Benita Diamond]

Response to Non-Payment

Thank you for your more indepth response. My questions come from ignorance. I am trying to get some answers that I can share with my board and thought you might be a good source. (I found your address in the U.S. News and World Report.) It goes without saying, we want to do what is right for our community without causing undo harsh relationships. If our only recourse is to hire a lawyer, we will probably do so.....but I feel we need to explore all options, hence the advice.

In your response to me you mentioned insurance. I've asked a couple people about insurance and no one seems to know what insurance, if any, a HOA needs to carry or who we need to talk to in this regard. I feel we probably need some type of insurance because we are handling funds and because we have 3 lots of common land which in the long run the Association is probably liable for. If I know who to ask then I can take proper action. Is this a lawyer thing? Will you please advise?

Thank you for your time.

 

[HomeGuru]

It is a narrow lawyer thing.

 

[sannerjg]

Proper Remedies/Procedures... WHAT ARE THEY?

HomeGuru
Senior Member - You said in one of your responses that the HOA didn't follow the proper remedies and procedures to place a lien on the homeowner. What are the proper remedies & procedures?

Please don't tell me to ask a lawyer as it seems you've put in all of your postings. Everyone is on this site to AVOID hiring a lawyer.

After searching on the internet I have found it to be fairly easy to place a lien on a HOA member for non-payment of dues WITHOUT the use of a lawyer. In my case the homeowner is 6 months behind and has been given two months notice that a lien will be placed if payment in full is not received by 3/1/01. According to our CC&R's a lien &/or forclosure can be enforced after the 1st day the homeowner is late. What other "procedures" would need to be followed? Also, remedies... if a HOA pays for water is it possible to shut off water to a unit until dues are paid?

[Edited by sannerjg on 02-16-2001 at 01:06 AM]

 

[Benita Diamond]

Thanks

To Sannerjg

Thanks for your response to homeguru.

I am looking forward to his/her response.

 

[sannerjg]

Lien

Benita,

I work with an attorney (she's not a property law atty) who suggested I go to my county's recorder's office website & do a search on how other HOA's have put lien's on their owners. You don't need an atty. As long as you follow the rules in your CC&R's all you have to do is file the document with your recorders office. I just used one of the one's I found online as a template. Our county's fee to do this is $9 for the first page and $1.00 every page after that. (It's only one page.) The release of lien is just as simple (assuming the non-payer forks over the money).

Hope this helps.

PS. Don't forget, the homeowner (according to our CC&R's) is also responsible for any fees ie. the $9!

 

[Benita Diamond]

Thanks for your help. At least now I know where to start and I'm thankful someone out there is willing to share advice.