Indiana Association Lien Foreclosure: A One-Year Notice Can Void the Lien

The instrument that governs you depends on what you own. If your deed describes a condominium unit, the Indiana Condominium Act applies and Ind. Code § 32-25-6-3(a) makes every unpaid share of common expenses a lien on the unit "effective at the time of assessment." Nothing is filed to create it, so a buyer or a refinancing lender can find the lien only by asking the association. The same subsection ranks it: it takes priority over all other liens except tax liens in favor of an assessing unit or a special district, and all sums unpaid on a first mortgage of record. Ind. Code § 32-25-6-1(a) adds a structural limit worth knowing, that once the declaration is recorded no lien may arise against the condominium property as a whole, only against individual units and the undivided interests appurtenant to them.

If you own a lot in a platted subdivision instead, the lien comes from Ind. Code § 32-28-14 and it is materially weaker. Section 32-28-14-6(a) says the lien attaches only upon the recording of a notice of lien in the office of the recorder of the county where the real estate sits, and § 32-28-14-6(b) forbids relation back either to a date named in the covenants or to the date the common expenses were assessed. An association that never records gets no lien at all.

Condominium foreclosure takes an unusual route. Ind. Code § 32-25-6-3(b) sends the manager or board of directors to court "under laws of Indiana governing mechanics' and materialmen's liens," which is Ind. Code § 32-28-3. That chapter is where the deadline lives: § 32-28-3-6(a) requires the complaint to be filed not later than one year after the statement and notice of intention to hold a lien was recorded, and § 32-28-3-6(b) makes the lien void if it is not enforced in that window. On judgment the court orders a sale of the property, and § 32-28-3-6(d) sends the officers making that sale to Ind. Code § 34-55-6. Section 32-28-3-14(a) entitles a lienholder who recovers a judgment in any sum to reasonable attorney's fees, entered as part of the judgment, which is how a few hundred dollars of dues turns into a five figure claim.

Two features of the condominium suit catch owners out. Ind. Code § 32-25-6-3(b)(1) requires the unit owner to pay a reasonable rental for the unit while the foreclosure runs, if payment of the rental is provided in the bylaws, and § 32-25-6-3(b)(2) entitles the plaintiff to appointment of a receiver to collect it. Under § 32-25-6-3(c) the board itself may bid on the unit at the foreclosure sale and then acquire, hold, lease, mortgage and convey it, unless the declaration prohibits that. The association is also not obliged to foreclose at all: § 32-25-6-3(d) lets it sue for a money judgment for unpaid common expenses without foreclosing or even having the lien.

The strongest tool an Indiana homeowner has runs the other way. Ind. Code § 32-28-14-9(a) lets the owner, or any person or corporation with an interest in the real estate including a mortgagee or a lienholder, serve the lien holder with written notice to file an action to foreclose. If the association does not sue in the county where the property is located within one year of receiving that notice, the lien is void. Serve it by registered or certified mail to the address given in the recorded statement, and § 32-28-14-9(b) lets you file an affidavit of service with the county recorder reciting the facts of the notice, that more than one year has passed, that no foreclosure action is pending and that no unsatisfied judgment has been rendered on the lien. The recorder enters it in the miscellaneous record book, cross referenced to the lien, and § 32-28-14-9(c) releases the real estate. The debt itself survives, because the section closes by saying it does not prevent the claim from being collected as other claims are collected by law. Serving that notice also strips the association of the ninety day waiting period it would otherwise face, since § 32-28-14-8(a)(1)(B) disapplies the wait once a person files written notice under section 9(a)(1).

Two more limits are worth writing down. Under Ind. Code § 32-25-6-3(e), a first mortgagee or other purchaser who takes a condominium unit through foreclosure of the first mortgage is not liable for common expenses that became due before it acquired title, and the shortfall becomes a common expense collectible from every co-owner, the new one included. And since the 2026 amendments to the homeowners association statute, Ind. Code § 32-25.5-3-3(n) provides that the amount of any unpaid fee for an optional service offered to an individual lot does not constitute a lien against the homeowner's property at all, while § 32-25.5-3-3(o) bars any charge for producing a statement of account showing what you owe.

Enforcement is judicial under both schemes. A condominium association files suit through its manager or board of directors and, on judgment, Ind. Code § 32-28-3-6(d) has the court order a sale of the unit, conducted by the selling officers in accordance with Ind. Code § 34-55-6. A subdivision homeowners association files in the circuit or superior court of the county where the lot is located, and Ind. Code § 32-28-14-8(c) likewise requires the court rendering judgment to order a sale of the real estate subject to the lien.

The cost that hurts is Ind. Code § 32-28-3-14(a), which entitles a lienholder recovering a judgment in any sum to reasonable attorney's fees as part of the judgment. While a condominium foreclosure is pending, Ind. Code § 32-25-6-3(b) can put a court appointed receiver in place to collect a reasonable rental from the owner where the bylaws provide for rental. An owner's counterattacks are the one year notice to foreclose under Ind. Code § 32-28-14-9, which voids an unenforced homeowners association lien and supports a recorded affidavit releasing the property, and the recording defect under § 32-28-14-6, since a homeowners association that never recorded a notice of lien has nothing to foreclose.

Neither remedy erases the underlying debt, which the association may still pursue as an ordinary claim or, in a condominium, as a money judgment under § 32-25-6-3(d).