A superior lien is a lien that takes precedent over all other liens, if it is in accordance with the state statue. These liens are given higher priority and that will play into how things are handled when dealing with liens from different sources.
HOA assessment liens are liens on a homeowner’s property if they become delinquent in paying the monthly fees. In regards to HOA assessment liens, a superior lien is the portion of the lien that is given a higher level of priority than the others, even the first-mortgage holder. Because of this, the interest of the HOA is placed in front of the first mortgage.
About twenty states have laws that give HOA assessment liens superior lien status under certain conditions. In the state of Florida, a purchase money mortgage is superior to other liens, except those issued by a government agency.
A tax deed sale will extinguish the HOA lien; however, a mortgage foreclosure, while wiping out the lien, will not terminate the debt because it is protected by statute. Due to the statute, the liability of the mortgage is limited to 12 months, or one percent of the mortgage, and anyone taking title in a HOA foreclosure will take it subject to the mortgage and any tax liens.
Justification for the HOA having a superior lien status of their assessment liens is that the HOA helps to preserve the community and the superior liens help ensure that the HOA receives the funds they need to do so.
The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.