Preserving property values as a community takes work and financial responsibility. Keeping shared spaces clean, safe and enjoyable requires routine expenses. Homeowner associations (HOAs) collect dues and assessments to cover those running costs. When a homeowner falls behind on payments, HOAs must sometimes take steps to reduce financial risks to the community. One option is filing an assessment lien.
HOAs can use this method as legal leverage to guarantee payment from delinquent homeowners, as the lien can secure the debt payment when a property sells. In some instances, the association can legally force the sale of the property.
However, Texas HOA law does not automatically allow associations to create assessment liens. The association’s governing documents must define this authority and state what debts a lien may secure.
HOAs must also be mindful of updated laws for filing liens. Effective Sept. 1 last year, HB 886 amended the lien filing process for single-family residential HOAs to prevent sudden liens.
Filing an assessment lien under the new law
HB 886 requires HOAs or their attorneys to send a homeowner three written notices before filing a lien or notice of lien. Each notice must:
- Detail the amount owed
- Clarify the homeowner’s rights
- Allow at least 30 days for the homeowner to pay without extra charges.
Sending the notices follows a specified timeline via:
- First notice: First class mail or email
- Second notice: Certified mail with a return receipt request no less than 30 days after the initial notice
- Third notice: Notice of assessment lien no less than 90 days following the second notice
HB 886 states that the board may file a lien with the county clerk’s office only if the homeowner has not paid the owed amount within 90 days. However, the board can’t file a lien against homeowners protected by the Servicemembers Civil Relief Act.
Steps the HOA board can take to ensure compliance
The HOA board must regularly discuss new policies, like HB 886, with the community to avoid disputes due to ignorance of the law. As a protective measure, the board can also work with its attorney to prepare an amended collection policy reflecting the filing procedure and ensure they meet all legal filing requirements.