If you live in a private community setting (whether it is a condominium, townhouse, or single-family home) in New Mexico, you are most likely responsible for paying dues and assessments to a homeowners’ association (HOA) or a condominium association (COA). If you fall behind in payments, in most cases the HOA or COA can get a lien on your home that could lead to a foreclosure.
Read on to learn about the particular requirements for HOA and COA foreclosures in New Mexico.
New Mexico HOA and COA Lien Laws
The Homeowner Association Act (N.M. Stat. Ann. §§ 47-7E-1 through 47-7E-14) governs HOA activities in New Mexico, while the Condominium Act (N.M. Stat. Ann. §§ 47-7A-1 through 47-7D-20) applies to all condominiums created after 1982. (The state's older Building Unit Ownership Act found at §§ 47-7-1 through 47-7-28 covers older condominiums unless the association’s board passes a resolution subjecting the development to the newer Condominium Act.)
This article focuses on the Homeowner Association Act and the Condominium Act. The two sets of laws are very similar.
How HOA and COA Liens Work
Most HOAs and COAs have the power to place a lien on your home if you become delinquent in paying the monthly dues and/or any special assessments (collectively referred to as “assessments”). Once you become delinquent on the assessments, a lien will usually automatically attach to your property.
In New Mexico, an HOA or COA is entitled to a lien for any assessment due or fines imposed against the owner from the time the assessment or fine becomes due. If an assessment is payable in installments, the full amount of the assessment constitutes a lien from the time the first installment becomes due (N.M. Stat. Ann. § 47-7E-6(A), § 47-7C-16(A)).
The recording of the instruments that create the common interest community and/or give the association the authority to impose assessments (such as a Declaration of Covenants, Conditions, and Restrictions, which is often referred to as the CC&Rs) constitutes record notice and perfection of the lien. No further recording of the claim of lien for assessments is required (N.M. Stat. Ann. § 47-7E-6(C), § 47-7C-16(C)). (In some states, the HOA or COA must record the lien in order for it to be effective.)
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?)
The COA governing documents will set forth which liens take priority over a COA lien. (N.M. Stat. Ann. § 47-7C-16(H)). Likewise, to find out the priority of an HOA lien, check the association’s governing documents.
Charges the HOA or COA May Include in the Lien
State law and the HOA or COA’s governing documents will usually set out the type of charges that may be included in the lien. In New Mexico, a COA is permitted to include the following in its lien (unless the governing documents provide otherwise):
- past-due assessments
- late charges
- fines for violations of the declaration, bylaws, rules, and regulations (after giving the owner notice and an opportunity to be heard)
- certain charges (for example, for the preparation and recordation of amendments to the declaration or statements of unpaid assessments), and
- interest at a rate established by the COA, not to exceed 18% per year (N.M. Stat. Ann. § 47-7C-16(A), § 47-7C-2(A), § 47-7C-15(B)).
To find out which particular charges a New Mexico HOA may include in its lien, check the HOA's governing documents.
Requesting a Statement of Assessments Due from an HOA or COA in New Mexico
If you make a written request, the HOA or COA must provide you with a statement setting forth the amount of the unpaid assessments against your home within ten business days after it receives your request (N.M. Stat. Ann. § 47-7E-6(D), § 47-7C-16(G)).
HOA and COA Foreclosures in New Mexico
If you default on the assessments, the HOA or COA can foreclose. 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. (Learn more about HOA liens and foreclosure.)
In New Mexico, an HOA or COA must judicially foreclose an assessments lien (N.M. Stat. Ann. § 47-7E-6(B), § 47-7C-16(A)). This means the association will file a lawsuit to begin the foreclosure. (Learn more about general foreclosure laws and procedures in New Mexico.)
Statute of Limitations for COA Liens
A COA must initiate the foreclosure within three years after the full amount of the assessments becomes due or the else the lien is extinguished (N.M. Stat. Ann. § 47-7C-16(D)). This is called the statute of limitations.
What to Do if You Are Facing Foreclosure by an HOA or COA
If you are facing an HOA or COA foreclosure, you should consult with an attorney licensed in New Mexico 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.)