North Dakota HOA and COA Foreclosures
If you default on HOA or COA dues and assessments in North Dakota, the homeowners association can foreclosure on your condo, townhome, or house.
If you live in a common interest community in North Dakota (whether it is a condominium, single-family house, or townhome), you are most likely responsible for paying dues and assessments to a condominium association (COA) or homeowners’ association (HOA). If you fall behind in payments, the COA or HOA can usually get a lien on your property that could lead to a foreclosure.
Read on to learn more about COA and HOA foreclosures in North Dakota.
North Dakota COA Lien Laws
In North Dakota, the Condominium Ownership of Real Property Act (N.D. Cent. Code §§ 47-04.1-01 through 47-04.1-15) governs COAs, though it is not very extensive when it comes to assessment liens.
North Dakota HOA Lien Laws
Since HOAs in North Dakota are often incorporated as nonprofit corporations, they are subject to the nonprofit corporations statutes contained in Title 10, Chapter 33 of the North Dakota Century Code.
HOAs are also controlled by their governing documents, which include the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and bylaws. The specific rules regarding assessments liens can typically be found in these governing documents. (You should have received copies of the CC&Rs and bylaws when you purchased your property. 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 and HOA Liens Work
A COA or HOA typically 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) that are used to cover the costs associated with managing the community. Generally, once a homeowner becomes delinquent on the assessments, a lien will automatically attach to that homeowner's property.
In North Dakota, a COA lien becomes effective when the association records a notice of assessment in the county records (N.D. Cent. Code § 47-04.1-11). If you are part of an HOA, 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
Typically, a COA or HOA’s governing documents will describe any amounts that may be included in the lien. A North Dakota COA may include the amount of any past due assessments plus any other charges, such as interest, costs, and penalties, as provided in the declarations and bylaws (N.D. Cent. Code § 47-4.1-11). To find out which charges an HOA in North Dakota may include in its lien, check the association's governing documents.
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?)
HOA and COA liens are often prior to all other liens except:
- property tax liens, and
- a first mortgage.
To find out the priority of an HOA or COA lien in your particular North Dakota development, check the association’s governing documents.
COA and HOA Foreclosures in North Dakota
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 North Dakota, a COA or HOA may foreclose if you don’t pay the assessments. To learn more about a particular COA or HOA’s foreclosure rights, read its governing documents. (Learn more about general foreclosure laws and procedures in North Dakota.)
What to Do if You Are Facing Foreclosure by an COA or HOA in North Dakota
If you are facing a COA or HOA foreclosure, you should consult with an attorney licensed in North Dakota 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.)