If you live in a house, condominium, or townhome that is part of a common interest community in Nebraska, you are most likely responsible for paying dues and assessments to the homeowners’ association (HOA) or condominium association (COA). If you don’t pay, in most cases the HOA or COA can get a lien on your property that could lead to a foreclosure.
Read on to learn about the particular requirements for HOA and COA foreclosures in Nebraska.
Nebraska HOA and COA Lien Laws
The Nebraska Condominium Act (Neb. Rev. Stat. §§ 76-825 to 76-894) governs condominiums created after January 1, 1984, while § 52-2001 of the Nebraska Revised Statutes governs HOA liens in the state. The two sets of laws are very similar.
How HOA and COA Liens Work
Most HOAs and COAs have the power to place a lien on your home if you become delinquent in paying the monthly dues and/or any special assessments (collectively referred to as “assessments”). Once you fall behind in the payments, typically the lien will automatically attach to the property.
In Nebraska, an HOA or COA is entitled to a lien:
- from the time the assessment becomes due, and
- when a notice containing the amount of the lien is recorded in the county records (Neb. Rev. Stat. § 52-2001(1), § 76-874(a)).
Lien Priority in Nebraska
An HOA or COA lien for unpaid assessments has priority over all other liens on the property except:
- liens recorded before the association’s governing documents are recorded
- property taxes (or other governmental assessments), and
- a first mortgage or deed of trust recorded before the notice of lien is recorded (Neb. Rev. Stat. § 52-2001(2), § 76-874(b)). (Learn more about lien priority and what happens to mortgages in an association foreclosure in Nolo’s article What happens to my mortgages if the HOA forecloses on its lien?)
Charges the HOA or COA May Include in the Lien
Nebraska law sets out the types of charges that the HOA or COA may include in the assessments lien. Unless the association’s governing documents provide otherwise, the HOA or COA lien may consist of:
- unpaid assessments
- late charges
- interest, and
- fees or other charges (Neb. Rev. Stat. § 52-2001(1), § 76-874(a)).
In addition, if the HOA or COA files for foreclosure and the court grants a judgment in favor of the HOA or COA in the case, the total amount of the judgment against the owner will include costs and reasonable attorney’s fees. (Neb. Rev. Stat. § 52-2001(6), § 76-874(f)).
Requesting a Statement of Assessments Due from an HOA or COA
If you make a written request to the HOA or COA, the association must provide you with a statement of the unpaid assessments against your home or condo within ten business days after it receives your request (Neb. Rev. Stat. § 52-2001(7), § 76-874(g)).
HOA and COA Foreclosures in Nebraska
If you default on the assessments, the HOA or COA can foreclose. A common misconception is that the association cannot foreclose if you are current with your mortgage payments. However, the association’s right to foreclose has nothing to do with whether you are current on your mortgage payments. (Learn more about HOA liens and foreclosure.)
In Nebraska, an HOA or COA may only foreclose its lien by filing a lawsuit (called a judicial foreclosure). (Neb. Rev. Stat. § 52-2001(1), § 76-874(a)). This differs from most loan foreclosures in Nebraska, which are typically nonjudicial, meaning they take place without court supervision. (Learn more about judicial v. nonjudicial foreclosures and foreclosure laws and procedures in Nebraska.)
Statute of Limitations
The HOA or COA has three years after the full amount of the assessments becomes due to start its lawsuit (Neb. Rev. Stat. § 52-2001(4), § 76-874(d)). After that time, it cannot foreclose on the lien. This is called the statute of limitations.
What to Do if You Are Facing Foreclosure by an HOA or COA
If you are facing an HOA or COA foreclosure, you should consult with an attorney licensed in Nebraska to discuss all legal options available in your particular circumstances. (See our HOA Foreclosure topic page for articles on HOAs, possible options to catch up if you are delinquent in payments, how bankruptcy can help discharge dues, HOA super liens, and more.)