Definition
An HOA lien is recorded by a homeowners association against a property for unpaid dues, special assessments, or accumulated fines. In many states, an HOA lien can grow quickly once legal fees are added, and if left unresolved long enough, it can even support the association foreclosing on the home entirely, separate from anything related to your mortgage. It has to be resolved before a sale can close, typically by paying it off directly from the proceeds at closing. For a homeowner, ignoring association notices about unpaid dues can turn a small balance into a much larger and more serious problem over time.
Example
After falling two years behind on HOA dues, Gary's association added fines and attorney's fees that brought his total balance to $6,900. He hadn't realized how quickly the penalties could stack up until he got a notice threatening further legal action against the property. When he decided to sell his townhouse, the title search flagged the recorded HOA lien right away, well before the closing date was scheduled. Gary contacted the association's management company directly to request an updated payoff statement covering all outstanding fees. The title company paid the association in full directly out of Gary's proceeds and recorded the lien's release before the closing was finalized. Gary said he wished he had called the association the moment he first fell behind instead of letting it snowball for two years.