When you live in a planned community governed by a homeowner’s association (HOA) or a condominium owner’s association (COA), either of these bodies can force you into foreclosure.
Typically, however, this is only possible when you owe fees and assessments, and traditional methods of debt collection have failed. When that happens, the association can file to place a lien against your home, which can ultimately lead to foreclosure proceedings.
Let’s take a closer look at this process and the important issues to consider.
What Are HOA Fees & Assessments?
Living in a community governed by an HOA typically means you are subject to fees and assessments. These are payments you make to the association on a monthly or annual basis, as well as payments you make on fines for HOA violations.
For example, you might pay $300 per month on HOA fees. This money is used to fund various aspects of your community, such as landscaping, maintenance, garbage and recycling pickup services, and more.
You are also required to abide by your HOA’s CC&Rs (covenants, conditions, and restrictions), which are rules for how you must behave and present your property in the community. A CC&R violation can result in a fine, which you are obligated to pay to the issuing association.
You shouldn’t take either of these financial obligations lightly, because accruing HOA fee and assessment debt is a serious matter than can lead to foreclosure.
How Your HOA Will Try to Collect Debt
If you owe fees or assessment debt to your HOA, you can expect to receive letters and other forms of communication seeking payment. This is the least serious way your HOA will attempt to collect payment.
When you still owe debt, your HOA may limit or take away certain privileges you may be afforded in the community, such as access to the association’s pool or fitness center. It might even file a lawsuit seeking a money judgment against you.
Should those efforts fail, your HOA may seek a lien against your property. A lien clouds your property’s title, which prevents you from selling or refinancing your home. It’s essentially the HOA’s claim on your home equity as a form of payment for your debt. If the lien is valid, the only way to remove it may be to pay off your HOA debt.
Acquiring a lien against your property is what enables the HOA to initiate foreclosure, which is the last step it’ll probably take to collect debt for fees and assessments.
Contact a Lawyer for Legal Assistance
Although your HOA can ultimately foreclose on your home, the road for them to get there can be long and complicated. Even so, you should immediately seek legal support from an experienced real estate attorney who can help you manage your dispute with your HOA.
Bundren Law Firm can provide the legal guidance you need during a conflict with your HOA. For more information about how we can help, contact us online.