Understanding HOA Liens: How They Work and Why They Matter

Understanding HOA Liens: How They Work and Why They Matter

Over 2 million Colorado residents live in one of the 10,000 HOAs dotted around the state. These HOA homeowners prefer the convenient lifestyle offered by shared amenities and a good community spirit, as well as stable home prices.

The perks of living in an HOA community come at a price, though. Residents must obey a set of often restrictive rules and pay monthly or annual HOA fees. Failure to comply with the HOA rules can lead to serious consequences, like HOA liens and foreclosures.

Read on to find out more about what an HOA lien is and how it can impact HOA residents.

HOA Liens in Colorado

Operating an HOA property efficiently and keeping the amenities in good order is an expensive and time-consuming responsibility. Residents must pay their HOA assessments (fees) and abide by the stipulated rules to ensure the HOA community thrives.

An elected HOA board oversees the community's daily operations, including fee collections and rule enforcement. The board implements the following measures to enforce rule compliance and fee payments:

  • Restricting access to amenities for non-payers
  • Charging late fees on delinquent amounts
  • Reaching out to homeowners telephonically
  • Sending letters requesting payment
  • Charging fines for rule infringements

If none of the above fee-collection tactics work, the HOA may file a lawsuit, make a money judgment against the homeowner, or foreclose on the property. A lien automatically attaches to the homeowner's property as soon as their fees become overdue.

The HOA must allow the homeowner the opportunity to set up a payment arrangement for past-due fees. If the homeowner defaults on this arrangement, the HOA can pursue a foreclosure.

What's Included in HOA Liens?

Under Colorado law, an HOA may include various charges in the lien amount. These are:

  • Unpaid HOA assessments
  • Late fees on past-due amounts
  • Attorney's fees and costs
  • Fines for rule violations
  • Interest on past-due assessments

If the HAO can't provide the homeowner with a detailed statement of all the amounts due, they can't assert a lien for these amounts.

In the case of rule violations, the HOA must give the homeowner two consecutive 30-day periods to rectify the matter before imposing a fine, unless the violation threatens public health. In this case, the notice period is 72 hours.

Avoiding an HOA Lien

As liens are automatic in Colorado, the only way for a homeowner to avoid an HOA lien is by paying their assessments on time. They can avoid an HOA foreclosure by setting up a payment arrangement, paying the outstanding amounts in full, or proving an error in administration by the HOA.

Encouraging Timely Payments in Your HOA

HOA liens are an unpleasant and time-consuming chore for HOA board members. Following up on late fees and administering payment arrangements can quickly become frustrating.

Hiring a property manager alleviates HOA board members of all the stress associated with HOA liens.

PMI Pikes Peak has decades of experience with managing HOA communities, fee collections, and administration. Our online portal encourages timely payments and assists with detailed record-keeping.

Discover an easier way to encourage HOA fee payments and get your Colorado Springs community back on track.