Most homeowners know when they purchase a home in an HOA they need to be aware of the rules and regulations as well as pay their assessments or dues. What some homeowners don’t know is just how powerful the HOA may be and exactly what can happen if a homeowner doesn’t follow the rules or doesn’t pay the assessments.

Florida law (specifically  §720.3085) provides that an HOA can have language in their governing documents which allows for a lien on each home or lot in the community. When the governing documents have this language (and a vast majority of HOA’s do have the language) then the Association can place a lien on the house or lot in the event the owner doesn’t pay dues.

The law provides some protections for homeowners faced with these situations. First, the HOA must send a specific notice of its intent to place a lien on the property. The “intent to lien” letter must give the owner at least 45 days to pay the amounts due before the HOA can record the lien.

The most common point of disagreement is the amount owed. With sufficient language in the governing documents, the HOA’s lien secures not only the assessments, but also secures any attorneys fees, late charges, and the like.

Many homeowners receive correspondence from the HOA which demands payment of these ancillary amounts in addition to the assessments. For some homeowners they do in fact have to pay all the charges associated with collection. For others, the only amount they’re required to pay is the assessments plus interest. The determining factor will be what provisions are within the governing documents.

After the HOA sends the first notice and presuming all necessary conditions are met, the HOA can then record a lien to ensure payment of the assessments. Generally, the liens are valid for 5 years and can even be renewed to ensure the lien secures all sums due to the HOA.

After the lien is recorded there is at least one other notice which must be sent to the owner prior to further enforcement action by the HOA. This second statutory notice is the notice that the HOA intends to foreclose its claim of lien. Much like the intent to lien letter previously sent, disputes often arise over the exact amounts reflected on this notice.

Once a lien is recorded on the property, the HOA may then bring a lawsuit to foreclose the lien in the same manner that a mortgage foreclosure may be filed. This is often the most surprising to homeowners. Many times owners realize there are consequences for not paying the assessments. Far fewer homeowners realize the extent of the HOA’s power. If the HOA has properly met all of the conditions, the foreclosure lawsuit moves forward much like a mortgage foreclosure.

If you’ve been sued or received notices from your HOA, call one of our attorneys immediately. If you’re on the Board of Directors for an HOA and want to know about Cornerstone’s Common Sense Solutions Program for HOA collections — call us today.