Month: November 2014

4th Cir. : Kingston at Wakefield Homeowner’s Association, Inc. V. Castell (In re Castell)- Homeowner’s dues are unsecured unless Claim of Lien is filed.

Summary:

Homeowner’s association filed a Proof of Claim in the Debtor’s Chapter 13 case asserting that it was secured by a lien against the Debtor’s residence. The Debtor objected to the secured status as the HOA had not filed a Claim of Lien with the County Clerk of Court pursuant to the Planned Community Act (“PCA”) at N.C.G.S. § 47F-3-116(a). The HOA argued that its recorded Declaration of Covenants, Conditions, and Restrictions was sufficient under common law to hold a secured claim without the filing of a Claim of Lien. The bankruptcy court and district court sustained the Debtor’s objection.

The Court of Appeal held that even if the PCA is not the exclusive vehicle by which a homeowners’ association in North Carolina can enforce a lien for unpaid assessments on a homeowner’s property, the HOA’s common law argument failed as the Declaration required recordation of a Notice of Claim of Lien with the County Clerk of Court.… Read More

Tagged with:
Top