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Investing in a Property with an Owners’ Association (HOA or COA)

By Gregory S. Stanley, Esq.


If you buy a property that is in a neighborhood with a gate, a lake, a pool, or other amenities you are probably buying a property with a home owners’ association. If you buy a condo, you can be assured there is a condo owner’s association. If you do not check before you buy, you may find the association is owed thousands of dollars and the owner of the property (the new buyer) is responsible for paying them.


It does not matter whether you knew there was an association when you bought the property, you ARE required to pay the association dues and assessments.

The developer planned for certain rules to maintain property values and recorded covenants that run with the land. All future owners must comply with the covenants.


The association will have a board made up of owners and they operate in the best interest of all owners in the association. The Board may determine a common area must be upgraded or repaired and that will require money from each owner. Imagine if the condominium roofs needed to be repaired, or the gate was destroyed by a drunk driver. In addition to regular periodic dues or fees, additional “assessments” may be charged to the property by the association.


The COA/HOA can make and enforce rules on renting, the color scheme for houses, type of grass, grass height, and charge monthly dues and periodic assessments, among other things.

If payment on the dues or assessments falls behind, the association may charge assessments, late fees, fines, interest, collection fees, and reasonable attorney fees. The association must provide notice to the owner, and then the association will try all means to collect the money owed. The association might restrict the delinquent owner or occupant from using common areas such as pools or tennis courts, they may try to collect from the tenant, file a lien, then foreclose and take title to the property, or sell it on the courthouse steps to collect the dues owed.

If dues and assessments are not paid, the association can get a lien on your property and then foreclose on you.

In Alabama there are many different laws that may or may not apply to any particular association with covenants. Some property will fall under the Alabama Homeowners' Association Act, while some will not, and generally condominiums will be governed by the Condominium Ownership Act and the Alabama Uniform Condominium Act, but some do not. Some property is governed only by their Declaration of Covenants, Conditions, and Restrictions (CC&Rs). HOAs formed after 2015 almost always fall under the Alabama Homeowners' Association Act and are required to be Alabama and Federal nonprofit entities, but some are not.

The Association must follow the rules that apply to them, so if you are fighting an HOA or COA, get an attorney familiar with the different laws to fight for you.

An HOA must give the property owner written notice of the assessment, the late payment, the default, and before they record the lien the association must give notice by personal delivery or first-class mail. The association must follow strict recording requirements. If an owner makes a written request for a statement of the charges owed, the association must provide a statement of the unpaid assessments within ten days or the lien can be released. The association may charge up to $25 for issuing the statement. The owner remains liable for the debt, but the lien is extinguished.


An HOA lien may be foreclosed judicially or non-judicially depending on the association and its covenants. HOA liens are prioritized first in time first in right, so the HOA lien may be second behind a 1st Mortgage. On the other hand, Condominium Associations have different rules and may have a super priority for a small part of the delinquent dues lien.


Whether due to ignorance or apathy, many owners’ associations are ruled by a management company, but this is opposite of how it should be: The management company works for the Association. The Owners’ Association Board members should keep in mind that the property management company is in the business of making money off the Association, they are not working for the Associations best interests.


A property owners’ association should never use the same lawyer their property management company uses, and no property management company attorney should ever do work for their owners’ association board: They have adverse interests.


There are Owner Association Boards that do not get independent contractor bids for all work on the common areas; They blindly allow the management company to use their own people and this is why the dues keep going up.

Talk to an Alabama Lawyer if your HOA is not effective, they are not collecting dues from all owners, or if you are facing an HOA or COA lien Foreclosure.


Gregory S. Stanley, Esq. 205.451.4196




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