Another great tool that is out there to secure debt with real property is the HOA lien. HOA stands for homeowners association. Many neighborhoods have homeowner associations. These entities exist in order to take care of the common elements of the neighborhood and keep the place looking nice. They are also set up to make sure the rules or covenants of the neighborhood charter are upheld.
HOA’s usually run on a very tight budget. Homeowners do not like to pony up large dollar amounts for the common areas or see a HOA racking up money. Therefore, every dollar counts. HOA liens are a very useful tool to make sure that each homeowner is pulling his or her own weight.
Louisiana HOA Lien Requirements
In Louisiana HOA lien requirements are stringent in that they have to meet certain form requirements and be filed in the proper manner – similarly to a mechanics lien. There is no requirement for HOA liens to send preliminary notice, but there is a requirement that the sworn detailed statement be sent at the same time the lien is filed. This essentially will serve as notice to the property owner that the lien has been filed.
Louisiana HOA lien is ranked with other encumbrances in accordance with the time it was filed. So likely it will fall behind the primary mortgage but ahead of any thing else filed after it. Nevertheless, even if the HOA lien is ranked behind the mortgage, a lien holder can still foreclose on the property. The foreclosure may not be fruitful but it could cause the HOA lien to get paid if the homeowner wants to keep the property.
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HOA Lien Costs and Fees
Louisiana is kind to HOA liens. Its possible that reasonable attorney fees and interest can be recovered. This is very good because it creates leverage for settlement and it also gives the HOA fighting power if the matter escalates beyond the lien filing into litigation.
Overall, HOA liens are good to file. With the added benefit of the possibility of attorney fees and costs, filing these should be apart of your HOA’s collections policy.
