The Nebraska HOA assessment lien

Nebraska has no homeowners’ association act. There is no chapter written for homeowners’ associations as such — nothing that sets out what an association may charge or, with one exception, how it must treat its members. Governance is not a gap in the same way: an incorporated Nebraska association takes its meetings, notice, quorum, voting, directors and member records-inspection rights from the Nebraska Nonprofit Corporation Act. What Nebraska lacks is a substantive homeowners’ association act. What it has instead is this one section — § 52-2001, filed in the liens chapter.

The scope of that absence. There is no act by that name anywhere in the chapters such a law would occupy — municipalities (ch. 18), corporations (ch. 21), liens (ch. 52) or real property (ch. 76), all of which are held in full behind this tab. The one HOA-specific act on the books is narrow: the Municipal Custodianship for Dissolved Homeowners Associations Act, which applies only after the association has been dissolved.

Who this section reaches — read § 52-2001(11) first

The definitions in subsection (11) decide whether any of the rest applies to you, and they are narrower than the phrase non-condominium community suggests. A homeowners’ association means an association whose members are a private group of fee simple owners of residential real estate, formed for the purpose of imposing and receiving payments, fees or other charges for (A) the use, rental, operation or maintenance of common elements and services provided to members; (B) late payments of assessments and, after notice and opportunity to be heard, fines for violations of the declaration, agreements, bylaws or rules; or (C) preparing and recording amendments, resale statements or statements of unpaid assessments. Subsection (11)(b)(ii) then excludes a co-owners association organised under the Condominium Property Act and a unit owners association organised under the Nebraska Condominium Act.

Two consequences worth stating plainly. A commercial or mixed-use owners association, a housing cooperative whose members hold shares rather than fee simple, and a ground-lease community are all outside this section even though none of them is a condominium. And the fining power the definition recognises is a power to fine after notice and an opportunity to be heard — the one thing Nebraska statute does say about how an association must treat its members before it penalises them.

What the lien covers, and when it attaches

An association has a lien on a member’s real estate for any assessment from the time the assessment becomes due and a notice containing the dollar amount is recorded where mortgages or deeds of trust are recorded (§ 52-2001(1)). Recording is half the trigger. Unless the declaration provides otherwise, fees, charges, late charges and interest are enforceable as assessments — so the lien is not limited to the base dues. If an assessment is payable in installments, the full amount may be a lien from the time the first installment falls due. The lien may be foreclosed in like manner as a mortgage, and the association must give reasonable notice to all affected lienholders.

Where it ranks — and the three subsections that decide it

Under § 52-2001(2) the lien is prior to everything on the real estate except (a) liens and encumbrances recorded before the declaration, (b) a first mortgage or deed of trust recorded before the association recorded its notice for the delinquent assessment being enforced, and (c) real-estate taxes and other governmental assessments or charges. It is also not subject to the homestead exemption. And under § 52-2001(3), where two or more homeowners’ associations hold assessment liens on the same real estate — a sub-association and a master association, typically — those liens have equal priority unless the declaration or agreement provides otherwise.

§ 52-2001(8) is the one to read next, because it forecloses the workaround: an association’s declaration, bylaws, rules or regulations may not provide that the lien relates back to the date the declaration was filed, or that it takes priority over a mortgage or deed of trust recorded after the declaration was filed and before the association recorded its notice. And where the declaration and the bylaws or rules conflict, the declaration prevails — except where the declaration is inconsistent with this section (§ 52-2001(9)). The statute wins.

Two deadlines and two duties worth knowing

• Three years. A lien for unpaid assessments is extinguished unless proceedings to enforce it are instituted within three years after the full amount becomes due (§ 52-2001(4)). Note what that runs against: the lien, not the debt.
• The lien is not the only route. § 52-2001(5) preserves the association’s ordinary action to recover the money whether or not it ever records a lien, and allows it to take a deed in lieu of foreclosure.
• Ten business days. On written request the association must furnish a member a recordable statement of the unpaid assessments against their real estate, within ten business days of receiving the request — and that statement binds the association, the governing board and every member (§ 52-2001(7)). Ask in writing before you close, refinance or dispute a balance.
• Costs and fees run both ways. A judgment or decree in any action under this section must include costs and reasonable attorney’s fees for the prevailing party (§ 52-2001(6)) — whichever party that turns out to be.

The escrow, and the exception in its own last line

An association may require a person who purchases restricted real estate on or after September 6, 2013 to pay into an association escrow account until the balance for that property reaches an amount not to exceed six months of assessments (§ 52-2001(10)(a)). (“Restricted real estate” is the term subsection (10) uses throughout and the section never defines it; subsection (11)(c) defines only “real estate”, as the member’s real estate specifically described in the declaration or agreement.) The money must sit in an interest-bearing checking account in a bank, savings bank, building and loan association or savings and loan association in this state, beyond the claim of the association’s own creditors, and on request the association must disclose the institution and account number; a single pooled account is allowed only with separate accounting records per owner (§ 52-2001(10)(b)). It may be applied against delinquent assessments, and the association may then require it to be replenished (§ 52-2001(10)(c)). When you sell and have paid everything, the deposit and the interest earned on it come back to you (§ 52-2001(10)(d)).

Read (10)(e) before relying on the six-month cap. Nothing in the subsection prohibits an association from establishing escrow requirements in excess of those amounts if its declaration provides for them. The cap is the default, not a ceiling.

How it fits with Nebraska’s other community laws

Condominiums have their own, nearly identical lien at § 76-874, which § 76-826(a) applies to pre-1984 condominiums as well. If your association is incorporated, its meetings, board and records come from the Nebraska Nonprofit Corporation Act; if it has been administratively dissolved, see the Municipal Custodianship Act. Return to the Nebraska HOA laws hub for the full set.