If you have made the choice to live in a condominium that is overseen by a Homeowner’s Association, you have already signed legal documents stating that you agree to pay certain fees to the HOA in order to remain a resident in good standing. With the increasing cost of living and the downturn in the economy, you may find yourself falling behind on your Homeowner’s Association fees and HOA dues. Given the choice between paying the mortgage or the HOA dues, most people will choose to pay the mortgage.... but can you be foreclosed on for failure to pay your HOA dues?
Foreclosure for Failure to Pay HOA Dues
The answer to this question depends upon what state you live in. Many states have laws allowing for non-judicial foreclosures, which means that the Homeowner’s Association can foreclose on you for failure to pay your dues in a timely fashion. In general, the process works like this:
- You get behind on your HOA dues,
- The HOA files a lien against your property for the back dues
- The HOA hires a sheriff or other entity to sell the house in order to recover the cost of the dues which they are owed.
This process works exactly like a traditional foreclosure, but it can happen even if you are current on your mortgage payments and have no financial problems with the mortgage holder.
Connecticut, for example, is one such state that has these laws. If you are more than two months behind on your HOA dues, the Homeowner’s Association can foreclose on your property and force the sale of the property. In doing so, they are also granted the legal right to collect back dues, taxes, penalties, and lawyer fees before the first or second mortgage holders. Similar to a bankruptcy proceeding, the HOA will receive priority as a creditor in states that have laws like this. Following the passage of the Connecticut law, Virginia, Vermont, Colorado, and and Washington State all passed similar laws.
If you are considering letting your payment of Homeowner’s Association dues lapse because of financial or other problems, you will want to make sure that you do not live in one of the states that allows for non-judicial foreclosures. If you find that you do live in a state that allows non-judicial foreclosures, you will need to continue to pay your Homeowner’s Association dues on time, or make other arrangements to sell the property and move to a non-HOA run property. Otherwise, you can find that your property will be foreclosed and sold.
Getting Help
If you are having problems with your homeowners association or if you are unable to pay your dues, you may wish to consult with an experienced attorney. Your lawyer can help you explore options to stop or delay foreclosure and can help you understand what the potential consequences of not paying your HOA dues are in your state.
