Can HOA Put A Lien On Your House

Can HOA Put A Lien On Your House?

by Liens

Living within a community association, like a homeowners association (HOA), can be a benefit to many. Most often, HOAs help maintain property values, provide additional support for repairing homes, and give access to amenities. 

There are of course downsides to having an HOA, and one of them is the risk of going into property debt. Under Texas state law, if you live in an HOA and you’re behind on your dues, the HOA can put on a lien on your house. 

At PPS, we have walked plenty of home sellers through this red tape. Here’s how the laws work and how to get out of this situation.

How HOAs and HOA Fees Work

Homeowners purchasing a condominium, townhome, or single-family home as part of a planned community gain access to a wide range of benefits. However, when you do, you are required to pay fees and additional assessment fees (or one-time expense fees) to the appropriate homeowners association (HOA) or condominium owners’ association (COA). 

An HOA fee averages $250 and can range from $100 to $1,000 a month. They usually pay for:

  • Shared lobbies, patios, pools, and community centers
  • Elevators
  • Landscaping
  • Road maintenance
  • Community parking
  • Amenities, like laundry, club house, neighborhood parks, and tennis courts

In most cases, residents like HOAs because they can also pay for utilities, like water and sewage fees, garbage disposal, new roofing, and structural repairs.

While there are numerous benefits, HOAs can also be hard to live with. In some cases, HOAs and COAs put restrictions on what members can do with their property, how it can look, and the types of changes or repairs a homeowner can make. While approvals are helpful for maintaining standards, they can also delay how long it takes to sell if repairs are needed but approvals take months to secure.

There are also downsides if you fail to pay your HOA fees. You could find yourself paying more to your HOA if you fail to pay your dues, are fined, and rack up interest or debt with the HOA. 

What Happens If You Violate Your HOA’s CC&Rs?

HOAs regulate their members through Covenants, Conditions, and Restrictions (CC&R) and they usually cover rules on development, home decorations, vehicle parking, storage of garbage bins, and so on. 

Violating an HOA rule, not paying your dues, or having a delinquent assessment can lead to additional penalties, including fines, suspension of privileges, forced compliance (the HOA will go onto your property to fix something for you), and they can even file a lawsuit against you.

Dealing with a troublesome HOA or condo association may spell disaster. These situations can get worse if a property owner violates CC&Rs and fails to pay an HOA-imposed fine or HOA assessment. If this happens, then the organization could have the option to place a lien on your property if it’s allowed by the state. Unfortunately, this is the case with Texas state law. 

If you live in a homeowners association or condos association and you fail to pay your dues or an imposed fee, then the HOA has the right to file a lawsuit against you. In most cases, the HOA will have to go this route before they can legally place a lien on your house. If they go to court and win, then they are issued a money judgment and the HOA may record that as a judgment lien on the county records against your property. Since this is a state law, it will affect you whether you have a home in Katy or Spring.

Getting a Lien On Your Property from the HOA

Having a lien against your property is no good and it restricts what you can and cannot do as a property owner. If you get into this situation, then you’ll want to do your best to avoid fee or penalty delinquency with your HOA or COA, read the rules of the HOA or COA, or pay the debt to remove the lien. 

If you don’t do any of this, then the HOA might foreclose that lien and take your house. Texas law states that an HOA or COA can put a lien on your property if there is the following:

  • Unpaid assessments
  • Late fees
  • Interest
  • Collection costs
  • Attorney fees
  • Other fees
  • Fines
  • Any amount owed by the homeowner

With a COA and HOA, a lien can be foreclosed judicially or non judicially, meaning that the lien can be foreclosed in or out of court. While there are some limitations around what type of lien can go through judicial foreclosure (for example, it can’t consist only of fines), you can still get out of the lien and redeem your home. This is the case even after your home is foreclosed; this is known as the redemption period. 

In order to redeem your property after the HOA or COA forecloses, you have to pay the redeeming value within 90 days. This includes:

  • All amounts due at the time of COA or HOA foreclosure
  • Interest
  • Attorney fees and cost (within reason)
  • Any unpaid assessment(s) levied after the COA or HOA foreclosure
  • Any other reasonable costs incurred, like maintenance

What To Do If Your HOA Placed a Lien On Your Property

If your HOA or COA placed a lien on your property, then you’re probably in a sticky situation. Most likely you have unpaid dues or you have a fine or penalty that you don’t agree with. No matter what, you probably can’t afford to redeem the lien and you might feel stuck. 

Having a lien on your property is not good, especially if you plan to sell. The HOA or COA could stop that property sale or take your house and all the money from the house sale.

Luckily, you have options if this happens to you. 

Can I Sell My Home if the HOA Placed a Lien on Your Property?

Yes, you can sell your house with an HOA or COA lien on it, but the house cannot be sold with outstanding HOA fees on it. If you try to do this, then the HOA will take the property and foreclose it. Most real estate agents will require this to be resolved prior to listing your home.

Instead, we recommend you sell directly to a real estate investor like us at PPS House Buyers. Otherwise, you will have to negotiate a lower price with a regular buyer to pay the outstanding HOA fees to remove the lien at closing, and real estate commissions. 

Will the HOA Take My Home if They Put a Lien On It?

If you do not pay your lien or refuse to pay your HOA lien when you sell, then the HOA and COA can take your home and foreclose it.

Can I Redeem My Property Even if the HOA or COA Forecloses On it?

You can still redeem your property even if the HOA or COA has foreclosed on it. There is a 90 day redemption period, which is 90 days after the HOA foreclosure date, where you can still pay the fees and get your house back.

How to Recover From an HOA Putting a Lien on Your Property

If you have an HOA or COA lien on your property, you’re probably wondering how to get out of it. You can pay the HOA lien, negotiate with them a lower price, file for bankruptcy, get a loan to pay off the lien, or work with debt collection to get rid of the lien. However, most people don’t realize that they can sell their home even with a lien against it.

Selling your home to a legitimate cash buyer and HOA foreclosure investor is the best way to go. Our real estate investors here at PPS House Buyers are happy to take this trouble off your hands. When it comes to dealing with HOA liens and other debts against your house, it can be such a hassle. 

Luckily, we can step in so you can sell your house fast and in as-is condition, despite the presence of existing lien debts against it.

We understand how frustrating an HOA lien can be. If you’re in the Houston, Texas area and are experiencing trouble with your HOA and have a lien on your house, we can help. Reach out to us to get a free no obligation offer!

what-is-a-mechanics-lien-texas

What is a Mechanics Lien in Real Estate?

by Liens

Selling a property has always been a challenging endeavor, even for seasoned real estate professionals. When selling your property, it is a good practice to be diligent in researching the necessary information to ensure that the sale proceeds without a hitch. One particular aspect of property selling that becomes apparent during the process is the discovery of liens attached to the property. If you find a lien attached to your home during the title search process, you will need to deal with it as soon as possible before you can proceed with the sale. Especially if your goal is to sell your house fast.

But what exactly is a lien? In general terms, a lien is a legal claim filed against a person’s property and attached to it until a debt associated with the property is paid. Liens are some of the defects that you may find in a property title search, which is basically a background check that verifies your legal claim on a piece of real estate — in this case, your home. 

There are several types of liens, including homeowners association (HOA) liens, which an HOA files against properties when owners break a rule or fail to pay fees; Department of Revenue liens, which are filed against properties when the owners fail to pay state taxes; and IRS liens, which are filed when owners fail to pay federal taxes. In this guide, however, we will focus on the mechanics lien, which is specifically designed to help construction contractors, subcontractors, and material suppliers recover payments

what-is-a-mechanics-lien-texas

What is a mechanics lien?

If you are not familiar with how the construction industry works, you will probably be surprised at how persistent payment issues are in the industry. Payment delays and even nonpayment are unfortunately all too common given the nature of the construction process. Because of the significant length of time between the contractor signing the contract and the day the construction project is finished, contractors need to learn the tools at their disposal that can help them preserve their right to get paid. One such tool is the mechanics lien. 

Also known as a materialman’s lien, a mechanics lien in real estate is a legal claim that a construction contractor or supplier can file against a property they worked on to secure payment for their unpaid work. 

This type of lien is an involuntary security interest. Compared to a home mortgage where you as a homeowner and a lender agree that your home will be used as collateral until you repay the loan, a mechanics lien can be attached to your property without your consent. Contractors will be able to file a mechanics lien even without your permission, though they have to meet strict requirements and deadlines before they can do so. 

 As a mechanics lien puts a claim on your property, it will make it difficult for you to sell the property or refinance it through a bank or any other lending institution. This is something that may deter many Houston home buyers if it arises during your real estate transaction, so make sure you address this prior to reaching that stage of the process. 

Who can file a mechanics lien?

All 50 states have laws that govern mechanics liens. In general,  contractors, subcontractors, and material suppliers who provided labor and furnished materials for the construction of your property will have the right to file a mechanics lien if they do not receive their due compensation. However, all states have varying requirements before a mechanics lien filed is deemed valid and enforceable.

The state of Texas deems the following construction participants as eligible to file a mechanics lien:

  • those who furnished labor or materials to a construction project or repair;
  • those who fabricated special materials for a project, even if the materials have not been delivered or incorporated into the project yet; and
  • Those who prepared a plan for the project as an engineer, architect, or surveyor.

Texas lien laws also specify landscapers and parties who perform demolition services as being entitled to the right to file a mechanics lien. 

How do you sell a property with a mechanics lien?

There are several things that you can do when selling a house with a lien on it. The first thing is to check if the mechanics lien filed against your property is valid. Texas state laws regarding mechanics liens are quite strict. Before a lien is deemed enforceable, the claimant first has to have submitted pre-lien notices within a specified deadline. They should also file an Affidavit of Lien specifying the amount of debt. 

If you have the necessary invoices, receipts, and documents that state that the debt is paid in full, you can dispute the lien and will be able to have the lien released from your title and proceed with the sale.

If the mechanics lien is valid, however, you need to negotiate with the creditor in order to have the lien released. The simplest way is to pay the amount in full. In some cases, however, you may feel that they are not entitled to the amount that they ask for. You may have to be creative in your approach. For instance, you may negotiate to pay a lower amount in exchange for quick payment or pay the debt on an installment basis. 

The most drastic method of dealing with a mechanics lien on house is litigation. This requires you to retain an attorney and it can take months or even years before the court can reach a verdict. Use this only as a last resort, especially if time and money are serious concerns.

Dealing with a mechanics lien when you are selling your property is a stressful process. Always consult with a real estate professional or lawyer for the best way to handle mechanics liens. The property team at PPS helps clients navigate and solve these problems on a daily basis. 

Do I Have to Pay the Capital Gains Tax When I Sell My Home?

Do I Have To Pay the Capital Gains Tax When I Sell My Home?

by Any ConditionDebtDivorceDownsizingForeclosureHome InvestorsInheritedLandlordLiensMortgageRelocationVacant

It’s a good feeling when you’ve sold your house – you can relax, focus on finding a new home and hopefully walk away with extra cash in your pocket. However, some homeowners must deal with the IRS getting a cut of the sale, which makes the capital gains tax one of the biggest concerns when selling a property. Fortunately, there are a few strategies that can help you avoid paying this tax and hold on to more of your money.

What is the Capital Gains Tax?

The capital gains tax is a government fee you pay to the IRS when you make a profit from selling financial investments such as stocks, bonds or tangible assets like cars, boats and real estate you’ve owned for at least one year. Therefore, when you sell your home for more than you paid for it, you might be subject to this tax. Of course, selling your property for a profit is the goal for any seller, and one reason working with an experienced real estate agent is important.

When you make money from selling a property, you will be forced to pay either a short-term or long term capital gains tax depending on whether you resided in the house and how long you lived there. Depending on the amount of time, there are short-term and long-term capital gains.

With short-term capital gains, you pay higher taxes on properties you’ve owned for less than one year because short-term capital gains are taxed at the same rate as ordinary income, which is usually around 25%. With long-term capital gains, you get the benefit of a reduced tax rate that typically doesn’t exceed 20%.

The IRS also has exceptions for capital gains taxes on real estate. If you’re single, the IRS allows you to exclude up to $250,000 of capital gains if you meet the tax requirements. Married couples are allowed to exclude up to $500,000.

For example, imagine you’re married and you bought your house together in 2009 for $300,000. The property sold this year for $900,000, which means you made a profit of $600,000 over ten years. In this case, the IRS will exclude $500,000 of the $600,000, but they will tax you a percentage of the remaining $100,000. (Of course, selling a house in divorce will bring different considerations.)

For another example, imagine you’re single. You purchased your house five years ago for $100,000 and sold it this year for $250,000. The government will not tax you on the $150,000 profit you made as long as you’ve followed the criteria to avoid capital gains taxes. While the best plan of action is to speak to a real estate agent or tax person, here are some guidelines.

How to Avoid the Capital Gains Tax

You can typically take advantage of the capital gains tax exemption if you meet three requirements:

1.You’ve owned the home you’re selling for at least two years.

2.You’ve lived in the house as your primary residence for at least two years of a five-year period, even if the two years you lived there weren’t consecutive.

3.You haven’t sold another property and claimed the $250,000 or $500,00 tax exemption in the last two years.

If you are disabled, in the military, or affiliated with any other government protection service, you may be able eligible to avoid the capital gains tax, as well.

If you don’t meet the above requirements and your property isn’t exempt from the capital gains tax, here are a few strategies to minimize or reduce it:

⁠—

Keep the receipts for your home improvements to use toward exemptions so you don’t miss out on claiming all value you added to your house while living there. You’ll need records and receipts when submitting your taxes.

⁠—

Turn your primary residence into a rental, which will provide a way to cover your mortgage while you live elsewhere. To be exempt from the capital gains tax, however, you’ll need to limit how long you rent it. After three years, it’s considered an investment property.

⁠—

Investors can also look to Tax Code Section 1031 to profit on business or investment properties without paying capital gains tax. This tax code allows you to trade “like-kind” properties to avoid paying taxes on the initial profit.

⁠—

Lastly, you can move into your investment property. If you live in your property for at least two years, it changes the nature of your property from an investment property back to your primary residence. You’re then eligible for the capital gains tax exemption.

To learn more about avoiding the capital gains tax or for assistance selling your home, please call PPS House Buyers at 281-306-5055 or fill out our simple online form.


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What to do when your Houston house floods

What To Do When Your House Floods

by Any ConditionDebtFloodingHome InvestorsInheritedLandlordLiensMortgageRelocationVacantWeather Damage

Dealing with a flooded home can be devastating, but it’s important to take action as quickly as possible in order to save your belongings, protect your finances, and prevent more harm to your property. Here are a few steps to help simplify the daunting process and get you through this ordeal:

1. Protect Yourself and Your Family

You and your loved ones come first, so it’s important to assess the situation when facing a flood and minimize the time you spend in your damaged home. Exposure to flooding can be dangerous but, if you must enter the property to gather your personal possessions, there are a few important safety tips to remember. Always inspect the exterior of the home to ensure it’s structurally sound. Do not enter the property if you see cracks, holes, or damage to the outside of the house until you can confirm that it’s safe to enter. You should also remember to cut the power to the property at the circuit panel to avoid electrocution, even if the power already seems to be off because it could be restored at any time. Lastly, when moving about the home without power, use flashlights in order to prevent bodily injury in the dark.

2. Organize Documentation

One of the most important tasks to complete right away is gathering receipts and providing detailed documentation of all your belongings, any home improvements and important property information to provide to the insurance company when filing your claim so that you receive the appropriate reimbursement for those assets. Make sure you’re thorough in your documentation, and the more receipts you can provide for home improvements, the more money you will receive from your insurance claim.

3. Take Photos and Videos

It’s a really good idea to back up your documentation with photographic evidence. Providing detailed pictures with your insurance claim will simplify, speed up the process and prove the authenticity of your claim. Make sure you capture images of both the interior and exterior of the home and include a timestamp on those photos. You should also measure and mark the water level in the photos and try to capture the whole process – when it first floods until the water recedes – in order to show the extent of the damage. You can also provide video evidence of the devastation that was inflicted on the property due to the flood.

4. File an Insurance Claim

Make sure you file your claim sooner rather than later. Insurance providers usually take anywhere from 1 to 4 months to process claims, and most operate on their own schedule so, if your claim is one of many being submitted for flooded homes in the Houston area, you’ll want to be one of the first to get your paperwork in. If you own your home and the property has been damaged beyond repair, the insurance company should pay you the worth of the property plus an additional amount for your lost belongings. If you have a mortgage, your insurance company will either pay you an amount they deem fair in order for you to remodel your home or provide a payment to the bank in order to cover the amount still owed on the property if the house is unlivable.

5. Remove Water and Protect the Property

Once you’ve received approval or have been instructed by your insurance provider, you will want to have the water removed from your property as quickly as possible to eliminate further damage. There are companies you can hire to help with the task, or you can remove the water yourself by purchasing a sump pump or water vacuum from the hardware store. If there is an extensive amount of water in the home, make sure you have the appropriate tools and manpower to prevent injury. It is also crucial to secure your property to prevent further flooding damage. Protect exposed parts of the home from continual rain by covering any holes in your roof or walls with a tarp or waterproof material.

Additional Tip: Sell Us Your Flooded Home

If your home is unlivable and cannot be repaired, your insurance company will provide financial reimbursement toward a new home, but it can be hard to sell a damaged property. No matter how many times your home has been flooded, we are here to help and would love to buy your property from you, as-is, at a fair price with a quick cash purchase.

To learn more about handling an insurance claim for your property or selling your flooded home, please call PPS House Buyers at 281-306-5055 or fill out our simple online form.

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You can sell a house with a lien on it. You have options to sell your house for cash.

Can You Sell a House with a Lien On It? YES! You Have Options

by DebtLiensMortgage

It’s a constant challenge to try and sell a home quickly in Houston, and it’s even more of a stretch to make sure you’re getting the value you’ve earned for your property. 

At PPS, we’ve come across just about every sort of situation and potential “problem” a homeowner could ever run into. Of course, no issue is too big (or too small) for our expert team.

One of the most frequently asked questions we get from sellers is:

“Can you sell a house with a lien on it?”

It’s an important question to ask, as many people find themselves in this predicament and feel as though they have nowhere to turn.

We’re here to help, empower, and guide you through this process effortlessly and easily, all while getting you the maximum cash payment you deserve. 

Can You Sell a House with a Lien on it in Houston?

Absolutely, positively, 100%…

YES! (But of course, the specific details matter and require a trained eye.)

Selling a home with a lien against it can, of course, be challenging. There is plenty of legal and financial red tape to maneuver around before you can even think about listing the home, and that’s assuming you can get those issues resolved in a timely fashion.

When we are approached by homeowners asking “can you sell a house with a lien on it?” – we’re ready to act.

Selling a home with a lien in Houston is one of our specialties, something we pride ourselves on, and an experience we will walk you through every step of the way. With years of experience successfully selling homes – no matter what condition they may be in – you can rest easy and with confidence that your selling process will be seamless. 

How to Sell a House With a Lien on it in Houston

Maybe you’re thinking of going through this process alone. 

We don’t recommend it for many reasons, but before you even begin to think about selling a home with a lien against it, you should be armed with some basic knowledge of what you’re getting yourself into. 

What is a Lien?

Liens are obtained through a court process, and they give a party the authority to place a claim against an asset (in this case, your home) due to unpaid bills. 

Parties generally can place a lien against a home if a debt is owed to them, with the main purpose of preventing the sale of a property until the debt is paid in full. Another purpose, however, is to take ownership of the property to pay off the debt. 

When selling property with a lien, these are the major types to look out for:

  • Tax Lien – A tax lien is a government claim against assets, including a home. These are usually the most serious types of liens and will take priority over all others if there are multiple liens against a property
  • Mortgage Lien – Also known as a property lien, lenders will place mortgage liens against homeowner property when the owner is behind on multiple mortgage payments.
  • HOA Lien – If you’re a member of a homeowner association and you’ve fallen behind on your dues, the association may place a lien against your property.

So Can a House be Sold With a Lien on it in Houston? Can I do it Myself?

For all intents and purposes, yes – you can try to do this yourself. In almost every case though, the process is long, complicated, stressful, and financially and mentally draining. 

Whether it’s the government, a homeowners association, or your bank – all of these parties have the power to prevent you from selling property with a lien. 

Basically, these agencies all want to be paid what is owed, so they also have the power to sell the house to compensate for the debt owed to them. If you have a lien or liens against your property and want them removed, the debt owed must be paid. 

Once the debt is paid, a Letter of Satisfaction is issued by the party that filed a lien against the property. Unfortunately, creditors are well aware that most homeowners don’t know their rights and many don’t understand the options they have in resolving the lien. 

They also know that, in most cases, sellers in Houston are motivated to try and sell their home fast. Because of this, many people find themselves taken advantage of and end up with bigger problems than they originally had. 

Let PPS Handle Selling Your Home With a Lien Against it in Houston!

If all of that sounds like a long, drawn out process – that’s because it is. 

That is, of course, unless you trust the experts at PPS to handle the heavy lifting for you. 

How can we help? 

Besides offering you top-level customer service every step of the way (and value you won’t find from any other service), the team at PPS draws from years of experience dealing with selling property with a lien against it. 

What are the benefits of trusting PPS to handle selling a home with a line?

  • We work with creditors to temporarily remove liens – making it possible to sell your house for cash. 
  • We negotiate on your behalf so you don’t have the stress of meeting with creditors
  • We’ll buy your house quickly, regardless of liens against the property – it doesn’t matter how many!
  • We’ll get you the generous CASH payment you deserve for your property – GUARANTEED!  

So why waste your time trying to solve these complicated selling problems on your own? Let the team at PPS Home Buyers do the dirty work and get your property sold TODAY!