Hello Eric and thanks for your post.

Unfortunately, the answer in all states of the US is a resounding yes. The CC&Rs, which are restrictions that are said to "run with the land" (in other words, anyone who owns the land will be bound by the conditions) provide the authority of the Association to create and encumber homes with assessments, and these assessments under most laws are enforceable by court action.

But, unlike a mortgage company that can be extremely difficult to derail during a foreclosure process, working with your homeowners association can be far easier.

Most importantly, remember, it is NOT in the homeowners association's best interest to own your home. Typically, the lien created by the assessment is an unsecured lien, so while it can result in foreclosure of the home, a secured lien holder's debt (such as the debt from the mortgage company) is NOT wiped out in the process. Anyone assuming the title of the home through a foreclosure action of this type will either have to pay off the secured liens or arrange to assume the loan. In most cases, an HOA is ill equipped to do either so it is in their best interests to work with you, and, indeed, they will provided, of course, you move quickly to contact the attorney and the Association to resolve this issue and not wait until it is too late.

Immediately contact the attorney who sent to you the notice of default or foreclosure. Explain your financial situation and make arrangements to pay off the amount due, of if that is not possible, coordinate a payment plan. Keep in mind that you will need to at least pay for the monthly assessment, interest, legal fees and late charges each month, and work to completely pay off the total due within 1 year or less. Any less is unlikely to be accepted by the homeowners association's Board of Directors.

Good luck and contact the HOA today to ensure that your home remains in your hands!

Sincerely,
Grace Morioka, SRES, e-Pro
Area Pro Realty
Co-Author: Homeowners Associations: A Guide to Leadership and Participation
Co-Host: Naked Real Estate on http://www.blogtalkradio.com

Eric, As you have seen, the answer is yes. There was a landmark court case that put the lid on this issue a few years ago. The court decided that since the Conditions, Covenants and Restrictions create the right to the lien, and since they are recorded prior to the lenders lien the homeowner (and lender) is technically on notice about the potential lien. It is very much like a recorded right of first refusal.

Let me know if I can help further,

John Axt
832-229-6667

Eric: I have no hidden agenda or ulterior motive in answering your question. That is to say, I'm not saying others do, but I'm not after your business. I definitely have no love for Citi Financial or most home owners associations. I lived in one (HOA) outside Houston for many years, and they bordered on Gestapo. They would make sure no cars were on the curb more then 24 hours, by chalking the tires. They sent me nasty letters about my new pick-up in my driveway overnight and eventually we moved out to 40 acres with no neighbors. I actually went to University of Texas School of Law, but never practiced. It was after I returned from Vietnam. As I wrote before, I was a Broker in 3 different states and owned many apartment complex's and condo's and homes in Texas totaling over 1000 units back in the 70-80's. Before and after the banking bust and RTC taking over bankrupted banks. The short answer is YES, but there's a caveat to my YES! If they decide to foreclose after notifying all parties concerned, they still are on the hook to the lead lender and to pay taxes and property insurance. Plus, generally keep the lights on. It's in their best interest to: A) Work things out with you, or B) Get a judgement so they get paid if and when the property is sold. If the property has a lot of equity, it might be feasible for them to pursue foreclosure. Otherwise, unless the property is abandoned it's best for them to get a judgement. Best of luck, in these really hard times! -Sean

They can and they do. If you're having trouble paying call the HOA and try to work out a payment plan or some other type of arrangement. Every HOA is different, but the last thing they probably want to do is foreclose. It's risky for them and expensive for you as they're going to charge all those expenses back to you.

Hi Eric,

This is a great question and the answer is not a simple one. I am not a lawyer so please do not take this as if I was a lawyer. You need to contact a Real Estate attorney to ge safe. HOA CAN foreclose on your property for non payment even if Citi has a lien on it. They are supposed to notify all lien holders before they forclose or auction your property - just like they notified you. If they fail to do so, then the lien holder still has a lien and a right to the house. If they DID notify all parties, then in most cases the lien holder (in this case Citi) will stop the forclosure or purchase the property from the HOA directly. As you can see it is a little complicated.

Let me know if I can help you or any of your family and friends with your real estate transactions.

Juan Carlos

HOA's, in TEXAS, can foreclose on a property within their association for non-payment

Eric,

Very simply.. YES.. check out Ute's and my response here:
http://www.trulia.com/voices/Foreclosure/Citi_Financial_hold…

I've not known for HOA's to immediately foreclose in the same year; but I've seen numerous HOA foreclosure happen right here on our courthouse steps on the first Tues. of the month.