There are a lot of things in life that are boring and tedious, but which we really need to have at least a broad understanding. A discussion of liens against real property is one of those things that could make you go running for the TV remote but even a little information is better than none.

Most homeowners understand that a mortgage is actually a lien against the property; the mortgage must be satisfied before the property can be sold. There can also be other types of liens – tax liens, mechanic’s liens, judgment liens, child support liens. But there is something called a super priority lien that homeowner’s associations can place on a property for non- payment of association fees.

Generally a first mortgage on a property is recorded first and becomes the first lien. If a second mortgage is taken out, it becomes the second lien. Priority is usually established by the recording date and determines the order in which lien holders are paid with the proceeds of a foreclosure sale.

Homeowners’ association liens are generally junior liens satisfied after the first lienholder is paid, unless you’re in a state that gives the lien a higher priority. Approximately 22 states have state statutes that give HOA assessment liens super lien status, therefore, giving them even a higher priority that the first mortgage holder. Florida is one of those states.

The law was established in order to protect the other residents who are part of a homeowners’ association from incurring additional expenses as the result of non-payment of association fees. HOAs are responsible to maintain the property values for the entire association and are, therefore, placed in a position to perform preventative maintenance, make repairs and incur electrical costs on abandoned homes.

Lenders, especially in recent years, have been slow to foreclose on abandoned properties so as not to be responsible for the current HOA fees as well as some of the previous fees. This leaves homeowners’ associations in the position of not being able to recoup any of their monies until the property is sold and a new owner is in place.

What really happens when a HOA in a Super Lien state initiates a foreclosure is to force the lender to initiate its own foreclosure judgment in order for it to preserve their position as the first lien holder. Most of the time these cases are settled because the lender has a vested interest in the property, but it’s not without a great deal of pain and expense on the part of the HOA.

In December, the Federal Housing Finance Agency acting on behalf of Fannie Mae and Freddie Mac got into the act by sending a warning to HOAs. Since these agencies guarantee most mortgages, their position is that the existence of super-priority liens increases the risk of losses to taxpayers by removing the mortgage lender’s first lien position.

For sure there will be a great deal of litigation about this law creating yet another fight between the federal government and the states currently carrying super priority legislation on their books. Florida is one of those states that can be adversely affected by the outcome of this since, it is home to a huge number of condominium associations that have had their ups and downs in recent years with thousands of abandoned properties.

If you own property in a homeowners’ association, pay attention to what develops. It’s been said that a little knowledge is a dangerous thing, but in the case of property liens a little knowledge can very well put you in first position.