Quick Answer
Under Texas Property Code Chapter 82 and certain dedicatory instruments, an HOA lien may have super priority status, meaning it takes priority over the first mortgage for up to a certain amount of unpaid assessments. HOA liens appear on the title commitment and must generally be paid or resolved before closing.
Homeowners' association (HOA) liens are a common issue in Texas real estate transactions. Understanding how they work helps buyers, sellers, and investors avoid surprises at closing.
How HOA Liens Work in Texas
When a homeowner fails to pay HOA assessments, the HOA typically has the right to file a lien against the property. This lien is recorded in the county clerk's records and will appear in the title search. The title commitment will list the HOA lien as a requirement or exception in Schedule B. For general information on HOA liens, read what an HOA lien is.
Texas Super Lien Priority
One unique feature of Texas law is that certain HOA liens may have super lien priority. Under Texas Property Code Section 82.113 and related provisions, an HOA's lien for regular assessments may take priority over a first mortgage for up to a certain amount or period of assessments. This means a title insurer may require payment of super priority assessments even if a first mortgage exists. The exact priority depends on the HOA's dedicatory instruments and applicable law.
What Title Companies Require
When an HOA lien appears on title, the title company will typically require either: payment of the assessed amounts with a lien release, or an estoppel letter from the HOA confirming the amount due and whether the lien will be released upon payment. Unpaid HOA dues can stop a closing. For more, read can unpaid HOA dues stop a closing.
Property Research Before You Buy
Before you buy, before you invest, know more about the property. 1st Option Title offers free Property DNA Reports that provide comprehensive property research information. A Property DNA Report is not title insurance or a legal opinion. It is an informational research report to help you make informed decisions.
FAQs
Does my title company handle HOA estoppel requests?
Yes. 1st Option Title routinely requests HOA estoppel letters and works with buyers, sellers, and agents to obtain the information needed to clear HOA-related requirements.
What happens if HOA dues are unpaid at closing?
The unpaid dues are typically paid from the seller's proceeds at closing, and a lien release is obtained. If the seller's proceeds are insufficient, the buyer may need to agree to the payment as part of the transaction.