Recently on our legal forum a user asked, “We bought a house in a subdivision with a homeowner’s association. We are current on our mortgage, but we have not been able to pay our HOA dues. Can the homeowner’s association (HOA) force us out of our home and foreclose on us if we cannot pay our HOA dues?”
If you have purchased a home in a subdivision with a homeowner’s association you have agreed to the terms, covenants, and restrictions which have been instituted for that neighborhood by the HOA.
The homeowner’s association generally outlines the requirements for each homeowner to live in that neighborhood, which might be as simple as keeping your garage door closed, not installing basketball goals, or moving your trashcan. Homeowners associations can, however, charge fees to cover additional maintenance costs for the subdivision and improvements to existing facilities.
Unfortunately, what many homeowners do not understand when they purchase a home is how expensive the HOA dues can be and the power the HOA may have if a homeowner fails to make the required HOA payments.
What can the HOA do if the HOA dues are not paid?
Before buying a home, a buyer should consider whether the benefits of purchasing a home in a subdivision with a homeowner’s association are worth the risk. Not only can the homeowner’s association force homeowners to comply with certain regulations which can keep a subdivision more refined, they may also have the power to initiate foreclosure if homeowner’s association dues are not paid.
Initially, many HOAs may decide to collect HOA dues with calls and threatening letters or they may decide to file a civil claim against the homeowner. If those steps fail, however, they generally have the right to initiate either a nonjudicial or judicial foreclosure, which will vary depending on the process required by the state.
States may also have instituted protections for some homeowners to suspend foreclosure proceedings if a specific debt thresh hold has not been met. For example, California law requires the dues owed to the HOA be $1,800 or more, excluding late charges, lawyer’s costs, and interest, or alternatively, the homeowner’s association dues have not been paid for more than 12 months.
Other states, however, do not offer any type of protection. In fact, in the State of Texas, for example, the HOA can foreclose on your home if you default on the assessment, even if you are current with your mortgage payments. The two issues are not related.
Texas laws do offer some limited protections. For example an HOA cannot foreclose if the lien assessment consists only of fines, attorneys fees associated with the fines, or amounts due to the HOA for compiling, producing, and reproducing its records (Tex. Prop. Code Ann. § 209.009).
Before purchasing a home consideration needs to be made whether or not you want to own a home which is governed by a HOA. If you owe homeowner’s association dues the homeowner’s association in your subdivision may have the power to force a foreclosure of your home, even if you are current on your mortgage payment.
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