Falling behind on your payments is a significant issue for many homeowners. Not every unpaid bill leads to foreclosure, especially if there is no lien on your house. If you have a mortgage on your home, that is usually your first lien, but did you know that a Homeowners association (HOA) can put a lien on your house too? So what happens if you don’t pay your fees to the HOA? Can they take your home? Let’s find out!
The short answer is, yes. The Homeowners association can take your house if you miss your payments and there is a lien on your home. An HOA can foreclose its lien if the conditions, covenants, and restrictions (CC&Rs) allow it to do so, and they typically do. The fees owed to the HOA usually cover several services such as insurance, lawn care, pest control, amenities, maintenance, and many others. If you check the HOA’s rules and regulations, you can become familiar with HOA fees and know what kind of services to expect your monthly dues to cover.
Typically, if you miss one payment, you will be notified by the HOA that you have an outstanding debt. It is most likely that they will make you aware of missed payment consequences, such as being charged interest until you pay or incur a late fee. If you remain delinquent or fail to make payments regularly, they might warn you of legal actions that will be taken against you. But how much power does an HOA have? Can they go as far as to foreclose and take your home?
They definitely can process a foreclose and take your home. When can they take your house, or how far can you go without paying your bills? That depends on the state regulations. Some states have more restrictions as to when an HOA can initiate a foreclosure. In contrast, others don’t have any restrictions, and the homeowners association can foreclose on a home for as much as a few hundred dollars. Do check with your local real estate agents if you want to learn more about HOA’s near you.