Julie,

Thank you for your inquiry.  As a rule, all liens must be paid before clear title can be transferred, but as you know foreclosures and tax sales work differently.

HOA liens are frequently extinguished by a mortgage or tax lien foreclosure because liability for the assessments typically runs with the owner.  In other words, the lien might be extinguished from the property but the liability for the HOA assessments remains the previous owner’s debt.  Then, when the new owner takes title to the property, liability for the HOA assessments begins to run with that owner.  That’s just an example of how it works in certain states.

However, each state is different, statutes are not always clear and sometimes interested parties have to turn to relevant case law in that state. Moreover, a notice of litigation pending (Lis Pendens) may complicate things in terms of delays until the litigation is resolved.

For all these reasons, we highly recommend that you consult a real estate attorney in the area in which the property is located and present to him/her all the information you have about the property together with your list of questions and concerns.