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Can a Home be Foreclosed on by an HOA?

2020 took the world by storm and, naturally, left hardships and confusion in its wake. As we slowly recover from the shock of this pandemic and all the surprises thrown at us last year, many people are worried about what will happen to their homes. The fears and apprehensions are particularly troubling for those in HOAs, condo associations and other community associations.

With so many homeowners falling behind on dues and mortgages, we wanted to step in with some facts and help for both homeowners and HOAs.

Let’s start with the question on so many community association member’s minds. Can the HOA foreclose on my home?

The answer is yes.

While HOA foreclosures and liens aren’t dealt out casually or frequently, they definitely can happen. Here’s what you need to know.

State Law and CC&Rs

Your HOA can legally foreclose on your home if state law and the Covenants, Conditions and Restrictions (CC&Rs) allow. In Florida, state law allows for HOA foreclosure and nearly all community association CC&Rs also allow for this. If you’re not sure what your community’s CC&Rs specify when it comes to liens and foreclosures, ask your board for the documents or consult with a community law attorney to understand the complete process and rights in the HOA foreclosure process.

Falling behind on dues and assessments

HOAs collect dues and assessments regularly to provide for community spaces, upkeep and accommodations. When homeowners join an HOA they agree to pay these dues. The consequences for falling behind on these assessments and fees can result in a lien or foreclosure.

Typically, if dues are far behind, the HOA will place a lien on the home and may also file a claim for unpaid fines. The HOA will make this lien official by filing it with the county. This then places a cloud on the title and ensures that the homeowner cannot sell or refinance the home without first paying the dues and satisfying the lien.

Filing for foreclosure and a word of warning

Once a lien is placed on a home, if the fines and fees are not paid, the HOA then has the option of filing for foreclosure. A foreclosure in Florida can either be judicial or non-judicial. A judicial foreclosure is presided over by a judge and the judge makes the final ruling in the case.

In non-judicial foreclosures the HOA must follow all the guidelines of state law, as well as the CC&Rs to fulfill certain requirements. When these conditions are met, the home can be foreclosed on and sold at a public sale or auction.  

One final word of warning should be noted. Your home can be foreclosed on even if you are up to date on mortgage payments. If your dues are behind, even by a few hundred dollars, the HOA can still have the right to file for a lien and possibly a foreclosure.

The moral of this story is quite simple: In an HOA, it is critical to pay your dues and not to fall behind on payments. This might be easier said than done in the wake of 2020, so if you are behind on dues, don’t ignore the issue. Talk with your board members and see about payment plans or leniency. Consult an attorney if you’re unsure of your rights.

We wish HOAs and homeowners all the best as we return to the new normal in 2021.

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