Assessment Lien Foreclosure
Assessment Lien Foreclosure is a powerful tool that may be used by HOAs and Condominiums to collect delinquent assessments from homeowners that refuse to pay. Our firm’s goal in proceeding forward with foreclosure of Assessment Liens is to collect the debt, and not foreclose the home. We count as a success every property that we post for foreclosure, but cancel the sale because the owner has entered a payment plan or paid in full.
The authority of Homeowners associations to create liens and to post properties for foreclosure is given to it by a combination of State Statutes and the power of deed. Before the first house or condo was built, the developer filed a “Declaration” with the clerk of the county in which the property was located. This “Declaration” was a deed of sorts. It created the Homeowners association and deeded to it the areas that would be held in common for the benefit of all of the subsequent homeowners. It also gave to the association the authority to levy assessments, create rules and the power to collect those assessments and enforce those rules. Declarations typically state that by accepting a deed to property within that association the subsequent homeowners grant to the association the right to levy assessments, make rules, and to authority to enforce these rights by filing liens against the property and even posting the property for foreclosure.
Before 2011, both Homeowners Associations (generally condos) and Property Owners Associations (generally single family homes) had the authority to post properties, that were in default, directly for foreclosure using the power set out in Section 51 of the Texas Property Code. The 2011 legislature, in its wisdom, saw fit to limit the power to foreclose for the Property Owners Associations and left the HOAs (condos) with the same authority that they always had. Now, the Property Owners Associations, that once had the power to directly foreclose, must seek judicial approval before posting a property for foreclosure. This process, that has been called non-judicial foreclosure, has been in place since January 1, 2012. Our firm filed the first of these applications on January 2, 2012 and has successfully processed over one hundred of these applications, in five counties, Dallas, Collin, Kaufman, Tarrant and Denton. The overwhelming majority of these applications did not result in actual foreclosures, but rather resulted in the debt to the association being paid.