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Using Property Liens to Collect HOA Fees

Using Property Liens to Collect HOA Fees

An HOA simply cannot operate without the HOA fees paid by homeowners, making collection of fees one of the most important – and often the most stress-inducing – aspect of the HOA’s work. Ideally, the homeowners who all voluntarily agreed to pay the fees as part of joining the community will pay the fees on time and without having to be reminded, but anyone who has served on an HOA board knows that is not always the case. There are a variety of collection mechanisms that can be used to pressure delinquent homeowners into paying their fair share of HOA fees, but one particularly potent weapon in an HOA’s collection arsenal is the placement of a lien on the homeowner’s property itself to enforce collection. This might not be an HOA’s first line of attack in collecting HOA fees, but liens can be quite effective as most states – including Arizona – give HOAs the right to foreclose on the homeowner’s property if the HOA fees remain unpaid.

Arizona’s HOA Property Lien Law Explained

Arizona provides strong protections for HOAs in their right to pursue HOA fees and other related costs via the placement of a lien. Under Ariz. Rev. Stat. § 33-1807, a lien is automatically placed on the homeowner’s property when the assessment of the HOA fees becomes due. The HOA does not have to take any further action to record the lien. For starters, this means that, if the HOA fees remain unpaid, the HOA’s lien on the property will cloud the homeowner’s title on the property, complicating their ability to sell the property.

But what if the homeowner does not plan to sell the property anytime in the near future? The Arizona law allows for the HOA to foreclose on the homeowner’s property via the lien to collect the unpaid fees once either of the two events happen: 1) the homeowner has been delinquent in payment for a year or more; or 2) the total late HOA fees equals $1,200 or more (not including late fees, collection fees, or attorney fees).

In a foreclosure action, the HOA can force the sale of the home, and collect the following charges from the proceeds of the foreclosure sale:

    • All unpaid HOA fees
    • Late payment fees
    • Reasonable collection fees
  • Reasonable attorney fees

The payment of these charges will be subject to other prioritized liens on the homeowner’s property, such as a prior mortgage, and HOAs are advised to work with an HOA attorney in considering and executing a foreclosure action for unpaid HOA fees.

Contact an HOA Lawyer for Further Help

At Goodman Law Group, our sole focus is on meeting the legal needs of HOAs, including creating and implementing HOA policy and responding to homeowner concerns. Contact us today to discuss any legal challenge your HOA is facing.