can a homeowners association foreclose on your home or condo if you are behind on your payments?

Asked by Cindy Maclay, Simpsonville, SC Mon Dec 29, 2008

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Cecelia, , Ohio
Sat Feb 28, 2009
If your condo is mortgaged, the "first" mortgage holder has first and best lien on the property which means only your "first" mortgage holder can foreclose on the property. You pay title insurance at closing to protect the first mortgage holder against any other banks or entities obtaining first lien position. (This enables the mortgage holder to recoup losses by foreclosing on the property for which the mortgage isn't being repaid). The association can buy or finance your mortgage and then their lien would take first position, but in this market with declining property values, the association will put themselves in a vulnerable position by absorbing your mortgage as their own financial burden , simply to recoup a temporary and nominal loss such as past due association fees. While you are required to sign a PUD or Condo Rider to your mortgage agreeing to the association's terms, this rider doesn't give the association first and best lien over the mortgage holder. Keep in mind... It is your mortgage holder who provided the rider to you, and in their own best interest... not in the best interest of the HOA. I would however take the lien seriously and repay the association as you can. Additionally, you cannot refinance or sell without paying the association's lien first.
2 votes
I'm 66, senior and on a fix income that is barely keeping me above water but is durable. I'm behind in my HOA fee and the collection/lawyer for the association wants me to respond to a plan that I am unable to afford and they will not budge on revising the plan so I can repay and still have monies to live on. Can you tell me what I can do as a senior citizen on a fixed income who is trying to keep the only roof over her head?
please help and advise. Thank you much.
Flag Thu Nov 17, 2016
Randall Sand…, Agent, Charleston, SC
Mon Dec 29, 2008
Hi Cindy - It most cases no, they can put a lien on the property so that the owner cannot sell the property or borrow money against it without paying off the hoa/regime lien first.

Hope that helps,

Randall Sandin, 843-209-9667,
2 votes
Grace Hanamo…, Agent, Cupertino, CA
Wed Aug 11, 2010
Hello Cindy and thanks for your posting.

All HOAs in all states have the authority and power to, ultimately, foreclose on the property for unpaid assessments. The rights to foreclose come from the CC&Rs and are recorded restrictions against the home and the owner of the property.

In general, however, how fast or slow the Association may move on foreclosing depends on the laws in the prevailing states. There are several different types of laws in the US, but typically the Uniform Condominium Act (UCA) or the Uniform Condominium Owners Act (UCOA) or some form of these bodies of laws exist in most of the states in the US. Only Florida, California and New York have laws that are completely dissimilar from these commonly accepted laws governing Common Interest Developments or HOAs.

Under most circumstances, the Homeowners Association must first file a lien against the homeowner for failure to pay and the time when that occurs varies from state to state, then the lien is enforced by a judicial action that results in foreclosure. Some states allow homeowners associations to file foreclosure without a court hearing, called a 'non-judicial" foreclosure, which is similar to the powers that can be exercised by a lender. Bankruptcy and foreclosure are the only two actions that the homeowner or the lender may take that forestalls the HOA's ability to foreclose. And in most cases, a foreclosure by the lender will completely "wipe out" the lien and the delinquency of the homeowner against the foreclosing lender, but NOT against the homeowner. In some states--New York, for example--homeowners associations have the power of "super" lien rights, which holds the lender or the person who buys the foreclosed home with an assessment lien responsible for the delinquent assessments.

In my entire 27 years of managing homeowners associations, only one time did the HOA get the property. In most cases, the lender holding the first swoops in and starts their own foreclosure action that trumps and wipes out the little HOA. This can be devastating for an HOA and, in the past, the homeowners associations often did little to collect the fees from the exiting homeowner. Nowadays, with increasing delinquencies, HOAs are actively finding and enforcing their liens through garnishment of the previous owner's wages or attachment and sale of personal property. So, even if the owner is having a hard time paying the assessment, it often behooves them to work out a payment plan or a reduced payment to satisfy the judgment.

Hope this helps!

Grace Morioka, SRES, CID/HOA Expert and Forward Planner
Area Pro Realty
San Jose, CA
co-Author: Homeowners Associations: A Guide to Leadership and Participation
1 vote
I have a question. My HOA this year is charging and holding responsible home owners to pay for the HOA fees of other home owners who have not paid their HOA fees for last year in addition to the fees we are being charged this year. Is this legal?
Flag Sun Mar 6, 2016
I would like to talk you about my situation would you please let me know how my I contact you ?
My contact # 925-339-2799
Flag Sat Jan 4, 2014
J, Both Buyer And Seller, Lowell, MA
Tue Mar 17, 2009
Different states vary. Here in Massachusetts an HOA or condo association can file what is known as a "priority lien" which goes above the first mortgage. I'd absolutely take back association fees seriously.
1 vote
Leadernadine, Home Buyer, Simpsonville, SC
Fri Feb 3, 2017
My question is I'm up to date on my mortgage payments. But my HOA feed I'm behind. I want to set up a repayment plan. But the association wants more a month than I can afford. Now they want to foreclose on the property. What can u do to stop this? Can they sell my property even if my mortgage is up to date? Is that legal? I need a respond ASAP please
0 votes
Susan Hender…, Renter, Columbus, OH
Sat Jun 18, 2016
I want to make a comment here, it is understandable that people get up in arms about HOAs paying for everything and losing out on the payday. But please realize that many homes have HOAs that are run by a company in another state and do very little for the community other than enforce rules. There are no pools, parks, or other amenities and most exist to tell you how high your fence can be or the color your mailbox must be and then require you to buy said mailbox from them.
0 votes
Grace Lackma…, Home Buyer, Tucson, AZ
Wed Mar 2, 2016
I am disabled do to severe head trauma. I payee for my condo and own nothing. I fell behind on association dues. Can they forclose on my condo.?
0 votes
Excitor, Home Buyer, 92708
Wed Feb 11, 2015
The best answer is right in your HOA resale package or HOA agreement that you signed when first bought the property. If you lost the original, you can ask for a replacement copy from your current HOA.
0 votes
Becky Blanton, Home Buyer, Harleton, TX
Tue May 21, 2013
0 votes
shellyhender…, Home Owner, Matthews, NC
Fri Feb 1, 2013
I see a lot of opinion here regarding the tactics that HOA's are forced to use to recoup funds. Please just consider the following-

*HOA's unlike banks do not have big wallets that can absorb losses. In fact failure to pay your dues often times causes them to go insolvent and unable to pay for simple utilities. If you think homeowners insurance is expensive try insuring an entire policy filled with hundreds of people!

* When a homeowner doesn't pay their HOA the HOA still has to pay for the water the owner uses, the insurance on the master policy of the unit, the lights outside of the unit (both electrical bill and maintenance), landscaping, etc.

* When people don't pay for their fair share the rest of the "paying" owners must absorb this cost. We had to have our HOA fees increase 3 years in a row because we had 19 foreclosures. All the paying people complain about the increase but they don't understand we can't pay the bills without it.

* Not paying your HOA's is not a good option. I would recommend to anyone that if you stop paying your mortgage it is one thing; not paying your HOA fees is another. Pay your HOA fees-the HOA doesn't have any interest on what you do with the lender. The lender by design may hold off on foreclosure/eviction because it suits their interest. The HOA on the other hand has little recourse but to file against the owner to get them to take them serious.

* We just evicted 2 owners for not paying HOA fees. The bank has been in a state of "stalled foreclosure" for years. We accomplished this in less than 6 months. 1 owner has decided to pay his fees (really just his bill for the things that he has used!) the other has let the property go.

Just my opinion-

Shelly H.
0 votes
Hon3y1966, Home Owner, Chicago, IL
Sun Jun 24, 2012
0 votes
Soroga, , Florida
Tue Apr 24, 2012
If a bank forcloses on a condo in Florida and there is a first lien from a HO and a second lien (Private) does the bank have to pay off and satisfy ththe two liens before they can clear title to sell the property after being forclosed?
0 votes
Disabled Ame…, Home Buyer, South Carolina
Tue Apr 3, 2012
I live in SC, I received notice today (April 3, 2012) that my HOA has filed in court to foreclose on my property. I am a disabled veteran have missed only one payment in the amount of $113.00 that is paid monthly. I owe a total of $800.00. If I pay the entire balance, can HOA still take my home?

Disabled American Veteran
0 votes
Ilona, Home Owner, Florida
Thu Mar 22, 2012
can the asociation forclose on the condo with payments being current, but because the owner did not let the pest control company services because of wrong notifications of the services. The fee is $2600, mostly lawyer's fee, document filing and property title search fee.
0 votes
Princesa, Home Owner, Orlando, FL
Sun Apr 3, 2011
yes they can and also can sell you home like happen to my hoa in hunter creek forclose and my house and they kick me out with my 3 kids .....
0 votes
Chris Bledsoe, , Spartanburg, SC
Thu Aug 5, 2010
Yes they can, but how and who gave these associations so much power?
0 votes
Steve Hall, Agent, Greenville, SC
Wed Mar 17, 2010
In reality, if the property's HOA dues are in default, it is more likely that the HOA will sue for a judgement and obtain a lein on the property which will have to be satisfied if and when the property is sold. If there is a first mortgage holder it would have to be satisfied by any proceeds first in line, then other liens as secondary in order. If the first mortgage lein holder forces a foreclosure, then the subordinate lein holders may or may not recover any remaining proceeds and likely will not.
0 votes
Cameron Keeg…, Agent, Simpsonville, SC
Wed Jan 20, 2010
Of course they can do it, or at least try. Obviously the mortgage company is unlikely to allow the HOA to foreclose over $900 when the mortgage company is owed much more, so the mortgage company may exercise their option to accelerate the mortgage (i.e. homeowner must pay the mortgage balance in full pretty much immediately).

The short answer is yes, the HOA can file foreclosure proceedings, and it wouldn't be the first time the HOA has succeeded is foreclosing on a home.
0 votes
Charita King…, , Downey, CA
Wed Jan 20, 2010
I have a similar issue right now. My seller just received a notice from HOA letting him know a foreclosure proceeding is being filed due to HOA dues not paid. It's about $900. I am wondering if the HOA would really pursue on doing this since there is a mortgage on the property.

Charita King
Century 21 My Real Estate Co.
0 votes
M. King, , Greenville, SC
Thu Nov 26, 2009
Absolutely. However, once they foreclose, they become responsible for the maintenance and upkeep of the home. It is more likely that they will get a judgement and place a lein, which would have to be covered when you resold (the lawyer will satisfy the leins (with the proceeds of your sale) and get them released to close on the sale).
0 votes
Starr Hammond, , Greenville County, SC
Tue Mar 31, 2009
If you are referring to homeowner dues, then the answer is a definite YES! Do not think that you can ignore this responsibility. Dues must be paid for streetlights, pool maintenance, landscaping, etc. When dues are not paid, the entire community suffers. I have seen communities where the streetlights stopped working and entrances became weedy and this affected home sales and property values. At the very least, a diliugent Board will put a lien on the property and this will have to be paid when the property is sold. (Consider the cost of all those late fees and legal expenses.) It just isn't worth it.

Most Association Boards will work with an owner if they need to set up payments due to a job loss, divorce, or other life changing event. It is better to meet this head on rather than stick one's head in the sand and hope it goes away. As an HOA consultant, I feel strongly about educating prospective buyers about these responsibilities. I also encourage realtors to please provide HOA documents, including the budget, to all interested buyers.
0 votes
Deborah Rhyne, Agent, North Myrtle Beach, SC
Thu Jan 1, 2009
Unfortunately - Yes they can.
0 votes
Really, you think that an owner should be able to enjoy the pool, cable, water and all the other things that the HOA pays for at the expenses of their neighbors and their neighbors should not have the recourse to foreclose....really?
Flag Thu Jul 4, 2013
Isaac Bensus…, , 92037
Tue Dec 30, 2008
Yes.I concur with all the other answers, but be careful.I had to help a client recover a condo in Houston because the Home Owners Association decided to foreclose on the property. My client was an absentee owner, he lived in Mexico and never got any notices because he had not left a mail forwarding address. He had paid cash for the property so the Home Owners Association thought they could own a free and clear condo just by just paying the foreclosure costs. Fortunately, after it was foreclosed, he HOA agreed to quit claim the property back to my client with the payment of what was owed plus all the other foreclosure expenses.
0 votes
Manu Kapoor, Agent, New York, NY
Tue Dec 30, 2008
They will put a lien, but if they foreclose they will hv to pay/buuout all mortgages before. Long process, associations do not go that far. Do not ignore their notices.
Web Reference:
0 votes
Cameron Keeg…, Agent, Simpsonville, SC
Mon Dec 29, 2008
As a former HOA President, and Architectural Chairman of my current HOA: Yes. One remedy to delinquent dues or breach of covenants/restrictions is a foreclosure filing. Although it is usually a last resort, it is an option, but typically the HOA will file a lien first. At 99% of the closings I have attended, the buyer signs a Planned Unit Development (PUD) Rider, where the purchaser agrees to abide to any covenants or restrictions set forth by the Homeowner's Association.
0 votes
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