Recent client received a letter from HOA stating they were being turned over to collection agency….client wondered what this exactly meant.

First-We are  not attorneys, but basically what has happened due to non payment of HOA fees  the seller has been turned over to collections which means the seller cannot contact the HOA now to make up back HOA FEE payments. Further the HOA most likely has placed a lien against the title of the home. This will show up as a negative on the sellers credit report. The past due fees will incur interest and penalties and any fees charged by the collection agency.

Any liens or clouds on title must be considered when the bank negotiates a short sale. If missed the subsequent buyer will be responsible to pay any liens unless dealt with ahead of time.  

As a seller , adds damage to your credit.

As a buyer, you must perform due diligence to ensure any and all liens have been addressed in your purchase offer or you will inherit them.