HOA Liens and Foreclosure

Understanding HOA liens, foreclosure rights, and how to protect yourself

Legal & Rights 10 min read

HOA liens and foreclosure are serious consequences of unpaid assessments. Understanding how liens work, when HOAs can foreclose, and how to protect yourself helps you avoid losing your home and manage financial difficulties effectively.

What Is an HOA Lien?

An HOA lien is a legal claim against your property for unpaid assessments:

  • Secures the HOA's right to collect unpaid fees
  • Recorded against your property
  • Can prevent sale or refinancing
  • May include assessments, late fees, interest, and collection costs
  • Priority varies by state (may be super-priority in some states)

When HOAs Can File Liens

HOAs can typically file liens when:

  • Assessments are past due (usually 30-90 days)
  • Special assessments are unpaid
  • Fines or penalties are unpaid
  • Collection costs are incurred

State laws and governing documents specify requirements and timelines.

Lien Process

Typical lien process:

  1. Delinquency: Assessment becomes past due
  2. Notice: HOA sends notice of delinquency
  3. Demand Letter: Formal demand for payment
  4. Lien Filing: HOA files lien with county recorder
  5. Notice to Owner: Owner receives notice of lien
  6. Collection: HOA attempts to collect
  7. Foreclosure: If unpaid, HOA may foreclose

What Liens Include

Liens typically include:

  • Unpaid Assessments: Regular and special assessments
  • Late Fees: Charges for late payment
  • Interest: Interest on unpaid amounts
  • Collection Costs: Attorney fees and collection expenses
  • Fines: Unpaid violation fines

Total can be significantly more than original assessment.

Lien Priority

Lien priority determines who gets paid first in foreclosure:

Super-Priority Liens

In some states, HOAs have super-priority for:

  • Limited amount (often 6-12 months of assessments)
  • Paid before first mortgage
  • Can force mortgage foreclosure

Regular Priority

In other states, HOA liens are:

  • Junior to mortgages
  • Paid after first mortgage
  • May be extinguished in mortgage foreclosure

HOA Foreclosure Rights

HOAs may have the right to foreclose:

  • Non-Judicial Foreclosure: Without court (in some states)
  • Judicial Foreclosure: Through court process
  • State Variations: Laws vary significantly by state
  • Limitations: Some states limit or prohibit HOA foreclosure

Foreclosure Process

If HOA forecloses:

  1. Notice of Default: Formal notice of foreclosure
  2. Redemption Period: Time to pay and cure default
  3. Foreclosure Sale: Property sold at auction
  4. Right of Redemption: May have right to redeem after sale

Process and timelines vary by state.

Protecting Yourself

To avoid liens and foreclosure:

1. Pay Assessments on Time

  • Set up automatic payments
  • Budget for assessments
  • Pay before due dates
  • Keep payment records

2. Communicate Early

  • Contact HOA if you can't pay
  • Request payment plans
  • Negotiate settlements
  • Don't ignore notices

3. Understand Your Rights

  • Know state laws
  • Review governing documents
  • Understand lien and foreclosure processes
  • Know your redemption rights

If You Receive a Lien Notice

If you receive notice of a lien:

  1. Don't Ignore It: Take immediate action
  2. Review the Amount: Verify what's owed
  3. Contact HOA: Discuss payment options
  4. Get Legal Advice: Consult an attorney
  5. Pay or Negotiate: Resolve as quickly as possible
  6. Document Everything: Keep all records

Payment Plans and Settlements

Many HOAs will work with homeowners:

  • Payment Plans: Installment agreements
  • Settlements: Reduced amounts
  • Waivers: Waiving some fees or interest
  • Deferrals: Temporary payment delays

Get agreements in writing.

Challenging Liens

You may be able to challenge liens if:

  • Amount is incorrect
  • Lien was improperly filed
  • Statute of limitations expired
  • HOA violated procedures
  • You have valid defenses

Consult an attorney to challenge liens.

Before You Buy

When purchasing a property:

  • Check for existing liens
  • Request assessment status letter
  • Verify all assessments are current
  • Understand lien priority in your state
  • Review governing documents

Conclusion

HOA liens and foreclosure are serious matters that can result in losing your home. By paying assessments on time, communicating early about payment difficulties, and understanding your rights, you can avoid liens and foreclosure. If you face a lien or foreclosure, act quickly and seek legal advice.