Maine HOA and COA Foreclosures
If you default on HOA or COA dues and assessments in Maine, the homeowners association can foreclosure on your condo, townhome, or house.
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If you live in a condominium, single-family home, or townhome that is part of a common interest development in Maine, you must pay assessments for common expenses to a condominium association (COA) or homeowners’ association (HOA). If you fall behind in payments, in most cases the COA or HOA can get a lien on your home that could lead to a foreclosure.
Read on to learn about the particular requirements for COA and HOA foreclosures in Maine.
Maine’s COA and HOA Lien Laws
The Maine Condominium Act, which can be found in Title 33, Chapter 31 of the Maine Revised Statutes, applies to condominiums created on or after January 1, 1983. The Unit Ownership Act, which can be found in Chapter 10 of Title 33, applies to condominiums in Maine formed before this date, though some provisions (such as § 1603-116) of the Maine Condominium Act apply to condos formed under the Unit Ownership Act. This article focuses on the provisions of the Condominium Act.
The rules regarding the operation of an HOA (including those regarding assessments liens) can be found in the association’s governing documents, such as the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and bylaws. (Find out more about what's in your HOA CC&Rs and other relevant documents in Nolo’s article Before Buying: How to Read the CC&Rs or Homeowners' Association (HOA) Documents.)
How COA Liens Work
Generally, a COA or an HOA has the power to place a lien on your property if you become delinquent in paying the monthly dues and/or any special assessments (collectively referred to as assessments).
In Maine, a COA has a lien on a condo for unpaid assessments or fines from the time the assessment or fine becomes due. If an assessment is payable in installments, the full amount of the assessment is a lien from the time the first installment becomes due (Me. Rev. Stat. Ann. tit. 33 § 1603-116(a)).
The recording of the COA’s governing documents constitutes record notice and perfection of the lien. The COA doesn't have to record the lien for assessments in order for it to become effective. (Me. Rev. Stat. Ann. tit. 33 § 1603-116(d).) (In some states, the association must record the lien.)
How HOA Liens Work
If you are part of an HOA in Maine, check the CC&Rs to learn about the association’s right to place a lien on your home if you don’t pay the assessments.
Charges the COA or HOA May Include in the Lien
State law and the COA or HOA’s governing documents will usually set out the type of charges that may be included in the lien. In Maine, a COA may include the following in its lien:
- past-due assessments
- late charges
- fines for violations of the declaration, bylaws, and rules and regulations of the association (after notice and an opportunity to be heard)
- fees and other charges (such as for the preparation and recordation of amendments to the declaration or statements of unpaid assessments), and
- interest (Me. Rev. Stat. Ann. tit. 33 § 1603-116(a)).
To find out which charges an HOA in Maine may include in its lien, check the association's CC&Rs.
Lien priority determines what happens to other liens, mortgages, and lines of credit if your HOA or COA lien is foreclosed. (To learn more about lien priority and its importance in HOA foreclosures, see What happens to my mortgages if the HOA forecloses on its lien?)
Maine law provides that a COA lien is prior to all other liens, except for:
- a first mortgage (whether its recorded before or after the date on which the assessment sought to be enforced becomes delinquent), and
- liens for real estate taxes or other governmental assessments (Me. Rev. Stat. Ann. tit. 33 § 1603-116(b)).
To find out the priority of an HOA lien, check the association’s governing documents. (In most cases, the CC&Rs will state that the HOA’s lien is subordinate to first mortgages.)
COA and HOA Foreclosures in Maine
A common misconception is that the association cannot foreclose if you are current with your mortgage payments. However, the association’s right to foreclose has nothing to do with whether you are current on your mortgage payments. If you default on the assessments, the COA or HOA can foreclose.(Learn more about HOA liens and foreclosure.)
Maine law states that a COA may foreclose in the same manner that a mortgage on real estate is foreclosed (Me. Rev. Stat. Ann. tit. 33 § 1603-116(a)). (Learn more about general foreclosure laws and procedures in Maine.)
To learn about an HOA’s right to foreclose on your home if you fall behind in paying the assessments, read the CC&Rs and bylaws.
Requesting a Statement of Unpaid Assessments from a COA
If you make a written request to the COA, the association must provide you with a statement of the amount of unpaid assessments within ten business days after receiving the request (Me. Rev. Stat. Ann. tit. 33 § 1603-116(h)).
Statute of Limitations for COA Liens
A COA must initiate an action to enforce the lien (such as starting a foreclosure action) within five years after the full amount of the assessments becomes due (Me. Rev. Stat. Ann. tit. 33 § 1603-116(e)). This is called the statute of limitations.
What to Do if You Are Facing Foreclosure by a COA or HOA in Maine
If you are facing a COA or HOA foreclosure, you should consult with an attorney licensed in Maine to discuss all legal options available in your particular circumstances. (See our HOA Foreclosure topic page for articles on HOAs, possible options to catch up if you are delinquent in payments, how bankruptcy can help discharge dues, HOA super liens, and more.)