New information. The State of West Virginia has codified in its statutes the following regarding common law liens (the type the lien committee claims is valid for MALA):

2015 West Virginia Code
CHAPTER 38. LIENS.
ARTICLE 16. FRAUDULENT COMMON LAW LIENS.
§38-16-106. Nonconsensual common law lien defined.
Universal Citation: WV Code § 38-16-106 (2015)
"Nonconsensual common law lien" means a fraudulent lien that is misrepresented as a valid lien because it:
(1) Is not provided for by a specific statute;
(2) Does not derive its existence from the consent of the owner of the affected property; and
(3) Is not an equitable lien or other lien imposed by a court of competent jurisdiction.

Now, the Commonwealth of Virginia does not have this codified in its statutes, but the law is the same as determined by case law and by court rules. Common law liens are allowed in Virginia exactly to the extent that they are allowed in West Virginia. As written below, no lien in Virginia is valid unless it is statutory, authorized by a court, or consented to by the current owner of the property. There is a Virginia statute, however, that states:

§ 18.2-213.2. Filing false lien or encumbrance against another.
Any person who maliciously files a lien or encumbrance in a public record against the real or personal property of another knowing that such lien or encumbrance is false is guilty of a Class 5 felony. The court in its conviction order or in a separate order, shall direct the clerk of any jurisdiction in which a false lien or encumbrance has been filed to release from record such lien or encumbrance specifically described in the conviction order or separate order, including any notice or memorandum of lien. Such lien or encumbrance shall be deemed invalid and shall be treated as if it was never filed.

It could be considered malicious if it can be determined that the Board knew that the liens it files are not authorized by law; the "good faith" argument proposed by Elmore is absurd at this stage of the game; MALA could have claimed that before August 2009, but not since then. That is the date that MALA learned that it did not qualify under the VPOAA as a property owners' association.

Virginia (as most states) recognizes three basic types of liens:

Statutory Liens

  • Statutory liens are those liens that arise solely from from the operation of a statute
  • There is a strict set of rules, set forth in the applicable statute (e.g. VPOAA) that must be closely followed in order to perfect a statutory lien
  • Statutory liens are non-judicial in nature; they are perfected once the requirements of the applicable statute are met
  • Once perfected, all the HOA has to do is to provide the appropriate public notice and sell the property at a non-judicial sale
  • If the lienee objects, s/he must sue to stop enforcement
  • Any judicial involvement regarding a statutory lien occurs only after  the lienee objects and sues to stop enforcement.

Judgement Liens

  • A judicial lien is a "lien obtained by judgment, levy, sequestration, or other legal or equitable process or proceeding.“
  • It is nonconsensual and involuntary, that is, not dependent on agreement, and arises from judicial action
  • If the lien arises only upon judicial action it is a judicial lien even though it is based on a statute.
  • Insofar as MALA is concerned, any lien it executes must arise from the action of a court, as there is no other type of lien available to it.

Consensual Liens

  • Usually in the form of one of the following:
  1. Deed of Trust (real property)
  2. Motor Vehicle or other type of title (personal property)
  3. A signed Promissory Note filed in the County records (personal property)
  • Establishes a secured interest in the property
  1. Must be agreed to by living, breathing Lienee whose property is being subjected to the lien
  2. Association assessment liens cannot be consensual since the lien arises only when the payment is past due, not at the inception of the declaration as some HOAs have claimed in court proceedings
  3. Vertical Privity between original covenantors and covenantees, and their successors in ownership does not apply as the lienee cannot agree to the lien except at the time the lien arises; this means that even the original covenantee cannot agree to any future consensual liens, even those against his own property.

Therefore, assessment liens by associations may only be judgement liens or statutory liens. In order for an association to be authorized to file a statutory lien, it must fall under VPOAA or SLSA. This is settled law, and is not subject to debate within the court systems.

 Solutions available to MALA:

  • A Warrant-in-Debt is available as a means of obtaining a judicial lien. Once obtained, it can be readily enforced.
  • A suit at law is another method available as a means of obtaining a judicial lien. Once obtained, it too can be readily enforced.
  • A judicial lien has the advantage in that the lien is applied to all property of a person or persons, not the subject property (as in a statutory lien). As such, any property of the lienee is subject to seizure (such as an automobile or boat).
  • A judicial lien is far more advantageous than a statutory lien in cases where the subject property is under water, as collection is not limited to the liened property.

 A brief note on MALA's unauthorized use of Memoranda of Lien to collect assessments:

  • By filing MOLs, MALA is unlawfully and intentionally clouding the titles of property owners in order to coerce those owners into paying their assessments. It is not material whether or not the assessments are owed. The bottom line is that MALA has absolutely no authority to damage the clear title of anyone’s property through illegal means. Since damage can and often does result, MALA is legally liable for any damages arising out of its actions.
  • By contrast, MALA incurs no liability when it files a Warrant-in-Debt, as it is asking for a judicial action to enforce the assessment(s).