Are you on the Board of a Homeowners Association in Maryland? Then you know how important it is to understand HOA rights for the nearly 1.04 million homeowners in Maryland who live in an HOA community.
People choose HOA's because an HOA has many rules that every resident has to abide by. That's why the quality of life for HOA communities is higher. The rules are enforced consistently, and there's no special treatment.
One of the greatest fears and misconceptions about living under the rules of a homeowners association is laws about an HOA lien and an HOA foreclosure.
Everyone needs to understand how HOAs work. In this article, we'll dispel the myths about HOA rights to place liens on property within the HOA.
Understanding the Homeowners Association?
A homeowners association is a group of people working together to maintain shared property within the community. They also ensure that property values are protected, services are provided to residents, and social activities and amenities are available.
The HOA takes care of things that aren't the individual homeowner's responsibility. Within the HOA, there is a HOA Board. The Board represents the HOA's interest to ensure the community's assets are taken care of and replaced when needed.
They also ensure the HOA budget is well-funded and that the value of homes is kept at an optimal level. Everyone has a part to play in making a community successful, but board members are especially important.
What Is an HOA Lien?
Every HOA has bylaws. In these bylaws, the HOA will outline its rules and processes for the following:
- HOA Assessment
- HOA Fees
- HOA Liens
- HOA Foreclosures
- HOA Settlements
- and HOA Rights
Depending on what's in your Homeowners Association contract, you could end up paying assessments like HOA fees, fines, lawyer fees, or even interest.
Most Homeowners Associations can have a lien put on your home if you haven't paid these assessments. A lien can stop you from refinancing or even selling your home. If you can't pay off the debt, it can lead to foreclosure.
HOA Foreclosure Procedures
HOA liens are serious and can cost time and money. When it gets to this point, the HOA has many decisions to make, including accepting an HOA settlement or moving forward with an HOA foreclosure.
In Maryland, an HOA may foreclose without a court order by following certain requirements set forth by state laws. Any action to foreclose in Bethesda, Maryland must be initiated within three years of the date a statement of lien is recorded.
Maryland homeowners have the right to exercise redemption at any time before the court has ratified a foreclosure sale.
Does Your HOA Board Need Help With HOA Liens?
The last thing an HOA wants to do is place an HOA lien on someone's property. They are not there to get into legal battles with homeowners.
Their goal is to maintain properties and build a community for all residents.
If you need real estate services in Bethesda, MD, we're here to help. Give us a call at 240.600.0985 to discuss our services.