Homeowners’ associations are not usually things that residents like. While they have some benefits, they also have a lot of control over the properties within the HOA.
One of the things that an HOA can do is foreclose on properties when the owners haven’t paid fees or assessments on time. While a foreclosure is unlikely if a payment is just a little bit late, the HOA could decide to pursue one if the owner simply isn’t paying.
When you join an HOA, you agree to pay for assessments and other fees up front. Failing to do so is the same as failing to pay a bill, and that can lead to you facing a lien or foreclosure.
What about major crises? Can HOAs still foreclose on you?
When major economic changes happen or an illness is spreading in the community, the HOA might delay seeking certain assessments or fees. If it doesn’t, it does have the right to pursue all legal avenues to get paid, including looking into foreclosing on your house.
HOA foreclosures are typically triggered when you don’t pay on time, so if you can’t pay, you should speak with your attorney and the HOA about leniency during a specific timeframe. Sometimes, HOAs will negotiate as long as there is a plan for the fees and assessments to come through eventually.
Unfortunately, if you stay behind by event a few hundred dollars, the HOA could get a lien placed on your home. You will need to repay it to have it removed. If you cannot and decide to sell your home, you’ll still need to pay the lien with a portion of your profits (if you have any).
The HOA, once a lien is placed, may consider foreclosing. You have a right to fight back against this foreclosure, though. Take a look at your HOA’s Declaration of Covenants, Conditions & Restrictions, or CC&Rs, to determine if the HOA has foreclosed at an appropriate time and followed its own rules. If not, that may give you a basis for getting the foreclosure paused or stopped completely. If so, you will need to look into your legal options to defend your home.