Change 1: LIEN PROVISION
A YES vote on this change provides a lien provision in the covenants to help with the collection of overdue assessments. Improved collection of overdue assessments would help ensure that all owners contribute fairly and equally to maintaining the neighborhood.
A lien is a claim filed against a property for an unpaid debt or obligation. It acts as a security interest, giving a creditor the option to act against the property if the debt isn’t settled. Liens can arise from various situations, including mortgages, unpaid taxes, unpaid home fees (such as HOA fees), or outstanding construction debts.
If a lien provision was to pass, an HOA could file a lien against a homeowner who owes an overdue debt to the HOA. An HOA lien serves as public notice that the homeowner owes money to the HOA. The lien is typically recorded in the land records, making it a matter of public record.
The property owner may settle an HOA debt by paying the full disputed amount, or he may work out a negotiated settlement with the HOA. He could also wait until he sells the property to settle the debt, or he could challenge the lien in court and have a magistrate rule on it.
Usually, a HOA is willing to wait for the property owner to sell or refinance to settle the debt.
There, the HOA stands a decent chance of getting paid because a buyer or lender almost certainly will insist on clear title (meaning no liens). If the debtor wants a lien to disappear, they can pay off what is owed at closing. In rare circumstances, if a buyer is willing to purchase real estate that is subject to a lien, the lien continues, and the “waiting game” for payment of the lien continues.
Homeowners should communicate with the HOA to understand the specific charges and try to work out a payment plan to resolve the issue.
In South Carolina, while HOAs can foreclose on properties for unpaid dues, fines, and other assessments, courts have not permitted foreclosures for minor debts. Pending state legislation may put further restrictions an HOA’s ability to file for foreclosure. However, the payment for the lien itself could still be pursued by the HOA.
The bottom line: HOA liens are a tool that most homeowners associations use to enforce payment of dues. Their purpose in to ensure that all homeowners contribute their fair share to the upkeep of the community.
Change 2: FINES FOR COVENANT VIOLATIONS
A YES vote on this change would add small fines for specified covenant violations. The fines would be a nominal amount, and they would not be allowed to exceed $100 for a specific violation. Many HOAs have fines that are capped at $1,000, or $2,000, or even higher for a covenant violation. But this change for Newington would be limited to a $100 cap for a covenant violation. The change would strengthen our covenant enforcement and help to maintain the future quality and aesthetics of our neighborhood. This would result in a new Covenant paragraph.
Change 3: RAISING THE HOA DUES CAP
A YES vote on this change would raise the HOA annual dues cap. This change would only create a new cap (i.e. the highest amount that annual dues could be set). The actual annual dues amount would still rise or fall in accordance with our existing covenants and bylaws. This change would ensure that the Association can meet future financial obligations and can continue to provide services for our community. It raises the existing $100 dues cap to $200, so the actual yearly fee that is set by the Board could not exceed $200. It would amend the last sentence in Covenant paragraph 22.
Change 4: CLARYIFYING EMAIL VOTING
A YES vote on this change would clarify the first sentence of Covenant paragraph 12 by adding the words “or electronic, or by any other means or media recognized at the time.” Electronic voting makes it easier for homeowners to participate in the decision-making process. While electronic voting is not prohibited by our covenants, this change would make the wording on its usage clearer and more explicit. It is basically an administrative change to improve transparency.