What to Do When Your Homeowners’ Association Forecloses on You

Foreclosure Home FloridaAre you facing foreclosure from a homeowners’ association?

In many states, a homeowners’ association, or HOA, can foreclose on your home in the event of unpaid fees owed to the organization. Many people who are required to be part of an HOA in their community may not even realize they wield such sweeping authority.

What is a Homeowners’ Association?

A homeowners’ association is a community organization frequently found in planned developments, such as leased land properties or gated communities. In many communities where they have been established, HOA membership is mandatory.

In exchange for a monthly or annual fee, the HOA manages the upkeep of common areas. These typically include amenities such as a clubhouse, an exercise room, or a pool. All homeowners typically pay the same rates, regardless of amenity usage.

Membership dues owed to HOAs are formally known as assessments.

The amount and frequency of these payments, as well as other guidelines and requirements, are provided to homeowners in the community’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs). Although the specifics vary from one state to the next, residents are typically required to execute this agreement before move-in.

The declaration governs rights and responsibilities in regards to an HOA. Unfortunately, it often empowers the organization to take aggressive and drastic action against resident homeowners.

What Happens if You Fail to Pay Homeowners’ Association Assessments?

In the event you fail to pay your assessments for a specified period of time, the homeowners’ association is empowered to foreclose on your home. Typically, the first step toward foreclosure is the attachment of a lien to your property.

The lien is often recorded with the county recorder so it becomes a matter of public record – a punitive action not typically required by state laws. Even if the lien is resolved, that record remains accessible to third parties.

Even if you’re up to date on your mortgage, a lien can be imposed for unpaid HOA assessments!

What Defenses Are Available if an HOA Threatens to Foreclose?

Even when a lien takes place, it does not mean that paying in full is your only option.

In fact, the aggressive and intimidating tactics used by some homeowners’ associations mean you should consider raising a vigorous defense against foreclosure. A judge may find you are not in the wrong in relation to your assessments.

Common defenses against foreclosure include:

  • Inaccurate accounting by the association causing the assessments to be overdue
  • Failure to follow state-specific laws on when and how foreclosure can take place
  • Unreasonable charges – for example, $500 in assessments, $5,000 in “penalties”
  • Unauthorized charges – any charges not specifically authorized by the CC&Rs
  • Failure of the HOA to properly apply received payments to the executed lien
  • Improper recording of the lien, or failure to do so in a state where it is required

Last, but not least, remember that the community’s CC&Rs may not even authorize foreclosure. This can often be determined simply by re-reading the document. Never assume that the HOA is empowered to take a specific measure just because you’ve received a communication about it.

Florida Residents: First Legal Can Help Protect Your Rights in Foreclosure Cases

Even in cases where legitimate debts are owned to a homeowners’ association, foreclosure can be pursued in a malicious or fraudulent way. Foreclosure can be prevented if legal experts, such as the team at First Legal, can establish any wrongdoing.

Are you looking for the real estate attorney Broward, Florida, residents know they can trust? Contact First Legal, a respected South Florida practice offering years of experience in real estate law and foreclosure defense.