Q&A: Recording Lien in Adjudicated Matter?

Q Can a homeowner association record a lien against a home in an HOA, when the  matter (cause and amount of indebtedness) has been adjudicated in District  Court in favor of the HOA homeowner and has been appealed by the association?  

— Curious Homeowner  

A Any lien filed against real property in the state of New Jersey must be (a)  based upon a valid claim, although possibly disputed and, (b) filed in good  faith,” says John R. Dusinberre, an attorney with the West Orange-based law firm of  Mandelbaum Salsburg. “The filing of a lien on real property by its nature creates a cloud on the owner’s title and gives notice to the world that there is an unpaid obligation, or at  least an assertion that there is an unpaid obligation. A lien filed that has no right to be filed, or is filed in bad faith, could  constitute a slander of the homeowner’s title and give rise to an independent cause of action by the homeowner against  the filer, in this case the association.  

 “In the fact pattern presented, the HOA has already been told by the District  Court that there is not a valid claim. There has been an adjudication of the  dispute in favor of the homeowner. The fact that the HOA has appealed the  decision does not change the determination by the District Court, and the  filing of a lien at this time would not be advisable without leave of court to  do so, pending the results of the appeal. Although not the case here, a lien  would normally be filed when the unpaid obligation arose and filed long before  the commencement of any litigation, let alone after the adjudication of the  case.  

 “The filer of a lien against a homeowner in the case of a homeowners association,  or a unit owner in the case of a condominium, for association related  obligations (primarily unpaid maintenance, but may include fines, late charges  or legal fees) must first look to the underlying documents for guidance and  authorization. There must be a recorded document, either a master declaration or master deed,  that forms the basis of any claim. This ties the actions of the association to the real property, and creates the  right to lien as a general matter. Before proceeding with the filing of any lien one should consult legal counsel  who will not only review the enabling documents of the community, but will also  take action recognizing the statutory framework and case law applicable to the  type of community.”  

 

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