There were, and still are plenty of homes in Georgia that are being sold at foreclosure. For example, if a homeowner doesn’t pay his taxes, there is a risk that the home could go to tax sale. Likewise, if a member of a Homeowner’s Association (“HOA”) fails to pay his dues and/or any special assessments, the HOA has the power to record a lien against the property and then collect by garnishing wages and bank accounts or by foreclosing on the lien.
HOA Superlien Superpowers
While an HOA’s power in Georgia to foreclose on a home for unpaid dues or assessments is significant, it is not as potent as the power that HOAs have in most other states.
Because in many other states, the lien of an HOA is considered a “super lien.”
At least 20 states have adopted some form of HOA “super lien” statute. These statutes give the liens of residential and/or commercial homeowners’ associations priority over earlier recorded liens. That means that if an HOA forecloses on its lien, its foreclosure will “wipe out” all other liens – including the first mortgage on the property.
While the effect for the homeowner may be the same, he will lose his property whether the lien is an ordinary lien or a “super lien,” the impact to the first deed owner (the bank or lender) is not a good one. An HOA’s super lien priority means that the lender will lose its security unless it pays the HOA’s lien. The result is that in states where HOA super liens exist, many lenders will refuse to write mortgages for properties in HOA communities that have delinquency rates of more than 25 percent. This can be devastating to a community. It creates a situation where people cannot sell their homes because lenders won’t loan there, common areas deteriorate, and remaining homeowners face rising dues to make up for the owners who haven’t paid.
Georgia is Not an HOA Superlien State
Georgia, however, is not an HOA super lien state. That does not mean that an HOA cannot foreclose on a home for unpaid dues and assessments — it can. Rather, because the state does not give HOA liens priority status, in Georgia, HOAs tend not to foreclose on their liens. Instead, they will more often use other means of collection, like garnishing a homeowner’s wages or a bank account.
Homeowner association dues pay for the maintenance and insurance for all common areas of a condominium, townhome or single-family home subdivision that has recorded codes, covenants and restrictions. If you reside in an HOA community, paying your dues and assessments is not just what you agreed to do when you moved in. It is important for maintaining your community and for keeping your home. Even if you are current on your mortgage payments, the failure to pay your dues and assessments can lead to foreclosure or to garnishment of your wages and/or bank account.
Protecting Your Rights
At the Law Offices of Mark Weinstein, we do one thing and we do it very, very well. We protect your property rights. We are real estate attorneys with offices in Cumming, Georgia. We serve clients in and around Atlanta, Marietta, Roswell, Sandy Springs, Kennesaw, Forsyth County, and a number of other counties in Georgia. To schedule your phone consultation, call 770-888-7707 or contact us here..