HOA Rules Fine Can no Longer Become an Automatic Lien on Home
By Christopher A. Combs
August 30th, 2016
HOA Rules and Regulations Fine Can no Longer Become an Automatic Lien on Home
Question: We recently purchased a home in a nice Queen Creek community. Within a month after closing, we got a bill for $1,200 in HOA fines. The HOA had fined our seller $1,200 for violating the CC&Rs by not removing a basketball goal from his driveway. We immediately removed the basketball goal. The HOA is still demanding payment of the $1,200 in fines from us. How can we be liable for $1,200 in fines when we had no knowledge of any fines when we bought our home?
Answer: Delinquent HOA dues and assessments can become a lien on a home. However, recent court decisions have held that a delinquent fine for a basketball goal, leaving a garage door open overnight, or any other violation of the CC&Rs, can no longer become a lien on the home, and can no longer form the basis of a foreclosure action. The only method the HOA can collect a CC&R fine from you is if you voluntarily pay the fine, or if the HOA files a lawsuit against you to collect the fine. Here, the HOA’s claim would probably be against the previous owners of the home. Therefore, you should have no liability for the $1,200 in HOA fines against the seller for the basketball goal.
Note: Under Arizona law, an HOA may not issue a fine until it first offers you a hearing before the board of directors. If the HOA fails to provide you an opportunity for a hearing before the fine is imposed, the fine is illegal and not enforceable.
Background law and procedure: A “state action” is required for an association to have the authority place an “automatic lien” on a member’s property. There are two Arizona statutes, A.R.S. 33-1256 for condos and A.R.S. 33-1807 for planned communities, that authorize the assessment of HOA dues. These Arizona statutes constitute a “state action.” There are no similar Arizona statutes authorizing fines for other HOA CC&R violations. Yet, a delinquent fine stemming from a CC&R violation may give the HOA a cause of action against the member for a breach of the CC&Rs in the amount of the delinquent fine. A judgment against the member for a the delinquent fine stemming from a CC&R violation may then become a lien on the property.
Michelle Shelton is an Associate Broker with eXp Realty. She is the Treasurer of the Arizona Regional MLS and serves on the Board of Directors with Arizona Association of REALTORS® as well as Southeast Valley Regional Association of REALTORS®. Michelle is also on the Rules Committee at ARMLS and serves on various task forces for ARMLS. She is also Chair of the Audit Committee. Michelle is active in raising the bar in the real estate industry as a whole. She has a passion for people and the rights of homeowners. As a Public Speaker and Writer, she has written for various magazine and trade publications and speaks Nationwide regarding the loss of her son, grief and emotional health.
She is a Certified Negotiations Expert, has attended Accredited Buyer classes and is a real estate instructor with Internal Dynamics Real Estate School.
Michelle enjoys time with her husband and family, writing, gardening, reading and is a huge fan of personal growth.