Once a member of a homeowners association (HOA) or condominium association (COA) defaults on an assessment, a lien attaches to the property by default and the HOA or COA may foreclose on the property. An HOA and COA is permitted to initiate foreclosure despite the existence of a mortgage on the property by a third party lender. The right to foreclose on the property is provided under both state law and the Declaration of Covenants, Conditions and Restrictions (DCCR), which sets forth the community development rules and regulations.
In Georgia, foreclosure is instituted through a judicial proceeding. A judicial foreclosure requires the HOA to file an action against the member and secure a judgment to obtain permission to sell the home to satisfy the lien on the home. The HOA is obligated to provide notice to the homeowner at least 30 days prior to initiating foreclosure on the property. Notice must be written and delivered by certified or overnight mail to the address of the property in the HOA or any other address identified by the owner.
Typically the DCCR and/or state law stipulate that the HOA lien retains priority over all other liens recorded following the recordation of the DCCR, except a first mortgage that was recorded prior to the default on the assessment. The mortgage lien therefore remains attached to the property following foreclosure by the HOA.
A foreclosure action cannot be instituted unless the defaulted assessment fee exceeds $2000. The statute of limitations for an enforcement action against the lien is no later than four years after the assessment became due. If not initiated within the prescribed time frame, the lien is no longer valid and no action can be taken.
The experienced team of attorneys at the Law Offices of Mark Weinstein, P.C. specializes in real estate litigation matters and is knowledgeable in all areas of Georgia property law. Contact Mark Weinstein and his colleagues at (770) 888-7707 or visit them at https://www.markweinsteinlaw.com to find out how they can advise you.