Homeowners’ Associations (HOAs) in Texas often face challenges when collecting unpaid assessments from previous property owners. This article explains what HOAs can and cannot do in these situations.
Legal limitations for Texas HOAs
HOAs have the right to place a lien on a property for unpaid assessments, but this lien is generally limited to the current owner’s debt. However, they cannot typically pursue previous owners for unpaid assessments after they’ve sold the property.
The lien for assessments is usually tied to the property itself, not the individual who owned it at the time. This means the new owner becomes responsible for any unpaid assessments when a property is sold.
Options for Texas HOAs
However, HOAs do have some options. They can try to collect unpaid assessments during the property sale process. Many title companies will check for any outstanding HOA dues before closing. If unpaid assessments are discovered, the seller may be required to pay them as part of the closing process.
HOAs can also file a lawsuit against the previous owner while they still own the property. If the HOA obtains a judgment before the property is sold, they may be able to collect on that judgment even after the sale. But this process can be complex and time-consuming.
Another option for HOAs is to work with the new owner to collect past-due assessments. While the new owner isn’t legally responsible for the previous owner’s debt, they might be willing to pay to avoid potential conflicts with the HOA.
Why seeking legal help might be advisable
Navigating the legal landscape of HOA assessment collection can be tricky. Laws can change, and each situation may have unique factors to consider. An experienced attorney can help HOAs understand their rights, explore all available options, and develop a strategy that complies with Texas law. Legal help can also be valuable in avoiding potential lawsuits from property owners who feel their rights have been violated.
While Texas HOAs face limitations in collecting delinquent assessments from previous owners, they have some options. The key is to act quickly and understand the legal boundaries. HOAs should consider working closely with legal professionals to develop effective strategies for assessment collection. By doing so, they can protect the association’s financial interests while staying within the bounds of Texas law.