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  1. #1
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    Mar 2012
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    Default Illegal Lien by HOA

    My question involves a condominium located in the State of: Arkansas

    In 2010 I purchased a foreclosure. The title search was clean. Seven months later the HOA filed a lien on my property for dues owed by the previous owner. They knew or should have known the claim was false as the purchase, title transfer etc. are a matter of public record available in the same office where they filed the lien. Nor would the current name on the property match the HOA records for the previous owner. I have spent nearly a year going around and around with them about the removal of the illegal lien. They acknowledge that I do not owe the debt on the lien, but have not removed the illegal lien although I have been assured multiple times by management that it will be done.

    I did several hours of legwork for them in obtaining paperwork from the county clerk's office, the title company and my mortgage company in an effort to be pleasant and cooperative. I also obtained the new addresses for the previous owners so that the debt could be collected directly from them. In other words several hours of work that was not my responsibility.

    I'm finally at the point where I am refusing to pay any further dues until I receive legal notification that the illegal lien has been legally removed. The dues have been put into an account until that happens. I have also told them that I will charge my hourly rate for any further work I do on this situation which is their responsibility and not mine. I explained exactly what that amount was and how it would be billed. I also told them that if I am forced to hire an attorney I will also seek the attorneys fee and punitive damages for a filing a false claim. In other words it would be so much easier to just remove the lien.

    Besides kicking them in the ankle what other options are there?

  2. #2
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    Default Re: Illegal Lien by HOA

    Didn't you do your due diligence at closing, to make sure that you had accurate and current figures from all of the possible creditors against the home, including the HOA, utility companies, etc., so you could be certain that they were paid off before the funds were released to the seller?

    If you don't pay your dues, you're going to end up with another lien that you have no ability to dispute. How does that help you? You can make any demand to them that you want - heck, ask for $1 million per hour for your time - just don't expect them to pay any heed.

  3. #3
    Join Date
    Mar 2012
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    2

    Default Re: Illegal Lien by HOA

    Quote Quoting Mr. Knowitall
    View Post
    Didn't you do your due diligence at closing, to make sure that you had accurate and current figures from all of the possible creditors against the home, including the HOA, utility companies, etc., so you could be certain that they were paid off before the funds were released to the seller?

    If you don't pay your dues, you're going to end up with another lien that you have no ability to dispute. How does that help you? You can make any demand to them that you want - heck, ask for $1 million per hour for your time - just don't expect them to pay any heed.
    Thanks for your input. A clean title search means that there were no liens on the property at the time of sale. So in others words yes the title company, my lender and myself did do our legal due diligence. None of us have ESP however - there is a very specific legal process that must be followed in order to obtain a judgment. As I stated, the HOA failed to do their job. By failing to place a lien on the property against the owners who were in arrears prior to the sale legally the HOA is SOL once the property has been sold. The property was for sale after the foreclosure for over a year, it's not like it was a secret or short notice. They could have filed any time prior to the sale.

    The HOA understands this and they have agreed multiple times to remove the lien, but they just haven't quite gotten around to it a year later. Maybe that's why I just haven't quite gotten around to paying my dues. The HOA is fully aware that the dues are sitting in a bank account waiting for them to release the lien. The day they provide me with legal proof that they have removed their false claim they get a check. It's not rocket science. I have been trying to avoid bringing in a lawyer as the HOA just doubled the dues last year in order to pay for a lawsuit the previous year where they also screwed up the legal paperwork. I hate for my neighbors to get hit again with raised fees to pay for their incompetence.

    However, I did a little more searching and by law I can also charge them attorneys fees in my state and that is where we are headed now. I've given them 30 days to avoid that unnecessary complication. I'm not sure about my state, but in other states you can also have penalties assessed for false claims where the claimant knew or should have known they were making a false claim as was the case in my situation.

    If I had it to do over, what I would have done was ask around about the HOA before buying the propery. Given what I know now I wouldn't have purchased my place despite being happy with my purchase in all other ways.

  4. #4
    Join Date
    Sep 2010
    Posts
    10,131

    Default Re: Illegal Lien by HOA

    First off, you have no avenue to avoid paying the dues just because you're unhappywith the lien. We (as an HOA) would foreclose on you in a heartbeat.

    A title search is worthess unless it comes with the insurance policy to go with it.

    Your problem with the lien is that bastard banks do not record the title change when they execute a power of sale. This leaves the previous owner still as the owner of record and allows people with claims on that to legally place a lien on the property. It's not the HOA, it's the scumsucking foreclosing bank that screwed you.

  5. #5
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    Default Re: Illegal Lien by HOA

    I didn't ask if you checked the title. I specifically referenced unpaid bills that could affect the property. If you move into a condo, making sure that the past condo fees have been paid in full, or are fully satisfied at closing, is basic due diligence. Even recognizing that you were a novice condo buyer, somebody involved in the transaction should have been paying closer attention.

    If a lien is improper, you can sue the person who attaches the lien to your property for slander of title. The cost-benefit analysis would typically weigh against litigation, but that is the means by which you can compel removal and potentially claim damages. If you have identified a statute that you believe entitles you to lawyer fees, you can make a claim under that statute s part of your litigation.

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