If you live in a condo, single-family home, or townhome that’s part of a common interest development in Louisiana, you’re most likely responsible for paying dues and assessments to a condominium association (COA) or homeowners’ association (HOA). If you don’t pay, in most cases, the COA or HOA can get a lien on your property that could lead to a foreclosure.
Read on to learn more about COA and HOA liens and foreclosures in Louisiana.
The Louisiana Condominium Act (La. Rev. Stat. Ann. §§ 9:1121.101 through 9:1124.115) governs COA activities in Louisiana, while the Louisiana Homeowners Association Act (La. Rev. Stat. Ann. §§ 9:1141.1 through 9:1148) governs HOAs.
The specific rules regarding the operation of your particular COA or HOA can be found in the association’s governing documents, like the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) or Declaration of Condominium.
Almost all COAs and HOAs have the power to place a lien on the property if the homeowner becomes delinquent in paying the monthly dues or assessments, which are often collectively referred to as “assessments.”
In Louisiana, a COA or HOA has what is called a “privilege” (an assessments lien) if the owner fails to pay the assessments. To be preserved, the COA or HOA must record a “claim of privilege” in the mortgage records in the parish in which the property is located. (La. Rev. Stat. Ann. § 9:1123.115(A)(2), § 9:1146).
A COA must provide seven days’ notice to the owner before filing the claim of privilege. Notice must be by personal service, or registered or certified mail, and include the date the assessment became delinquent or accelerated. (La. Rev. Stat. Ann. § 9:1123.115(A)(3)).
An HOA must serve the delinquent owner with a sworn detailed statement of the claim—by certified mail, registered mail, or personal delivery—at the same time the lien is filed. (La. Rev. Stat. Ann. § 9:1146).
A COA or HOA in Louisiana is generally permitted to include the following charges in its lien:
Further, if a condo unit owner fails to timely pay the assessments for a period of three months or more during any eight-month period—and the COA provides notice to the owner as required—the COA may accelerate one year of condo fees in advance and file a privilege for this amount. (La. Rev. Stat. Ann. § 9:1123.115(A)).
A COA’s assessments lien is prior to all other liens and encumbrances, except for:
HOA liens in Louisiana are prioritized based on the date of recordation. (La. Rev. Stat. Ann. § 9:1148). (Learn more about lien priority and what happens to a first mortgage in an HOA foreclosure in What happens to my mortgages if the HOA forecloses on its lien?)
If you default on your COA or HOA assessments, the association might foreclose. A common misconception is that an association can’t foreclose if you’re current with your mortgage payments. But the association’s right to foreclose has nothing to do with whether you’re current on your home loan.
A COA privilege is extinguished if a notice of filing a lawsuit is not recorded within five years after recording the privilege. (La. Rev. Stat. Ann. § 9:1123.115(B)). An HOA must initiate an action to enforce the lien within five years after recording the privilege. (La. Rev. Stat. Ann. § 9:1147).
If you’re behind in assessments and facing a COA or HOA foreclosure in Louisiana, consider consulting with a local attorney to discuss all legal options available in your particular circumstances.