Safe Harbor States
Hey BP Community!
I am doing initial state-by-state research as I prepare to get into note investing and heard about Safe Harbor Laws that protect (to a certain extent) note holders from HOA/ Condo Association liens in super lien states.
I know of Florida and Colorado having Safe Harbor Laws, but through my research I haven't been able to identify any other states that have Safe Harbor Laws enacted.
Does anyone know of any other states with Safe Harbor?
Also does Safe Harbor only apply to Condo Association liens? Or does it apply to both HOA and Condo Associate Liens?
Always appreciate the insight and help!
Thanks,
Wade
I do not think there are any other states that have the law. The law was put in place due to the large amount of condo projects in those states. Allowing fees to pile up would have exaggerated the value decline from mortgage market crash.
You are not really using the idea of "super lien" correctly. In Florida for example an HOA/COA lien does not have super lien status. Priority of the lien is still defined by recording time. So Florida doesn't cause HOA/COA liens to rise in priority, where super lien is a lien which has priority over all other liens which are not "super". Florida's (and Colorado's) law restrict fees from piling up as a liability to a Mortgagee who foreclosed and received title back from the auction. In any other setting, short sale, DIL, market sale, etc - no such restriction on fees applies. The law doesn't deal with lien priority at all.
States like Nevada have super lien status with their HOA/COA liens. A COA lien can be placed and has priority over a first lien mortgage no matter when the HOA/COA lien occurs.
In the majority of states there just is not enough condos to warrant such laws I suppose.
Yes, in Florida and I think Colorado there is a similar law for both HOA and COA.
I don't think CA has super liens either.
I can't say it has safe harbor but I can tell you this:
A friend of mine bought a house off auction in CA a few years ago. The HOA tried to come after him for bills it paid to keep the front lawn looking nice before the recording of purchase was made with the county. While the HOA was huffing and puffing with threats of a lein from their lawyers, he took a cash out on the property. They never filed the lein. I assume it is because they would be 2nd position.
Not sure if the above example helps your search but thought I'd share.
