Rhode Island HOA and COA Foreclosures
If you default on HOA or COA dues and assessments in Rhode Island, the homeowners association can foreclosure on your condo, townhome, or house.
If you live in a condominium, single-family house, or townhome that is part of a common interest development in Rhode Island, you are probably responsible for paying dues and assessments 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 Rhode Island.
Rhode Island COA Lien Laws
Rhode Island’s Condominium Law (R.I. Gen. Laws §§ 34-36.1-1.01 through 34-36.1-4.20) applies to all condominiums established after July 1, 1982, and its provisions also apply to condominiums previously created as far as events or circumstances occurring after this date (with limited exceptions).
Rhode Island HOA Lien Laws
HOAs in Rhode Island are often incorporated as nonprofit corporations and are subject to the state statutes that govern such corporations. (The state’s Nonprofit Corporation Act can be found in Chapter 7-6 of the Rhode Island General Laws.)
The rules regarding the operation of the 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). (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
Generally, a COA or 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). The lien will typically automatically attach to the home from the time that the assessment comes due.
In Rhode Island, the COA will have a lien on a condo for any assessments from the time the assessment becomes due. If the assessment is payable in installments, then the lien is for the full amount of the assessment at the time the first installment becomes due (R.I. Gen. Laws § 34-36.1-3.16(a)).
The recording of the declaration constitutes record notice of the existence of the lien, and no further recordation for any claim of lien is required. However, the COA may record the lien in the county records if it so chooses (R.I. Gen. Laws § 34-36.1-3.16(a)).
If you are part of an HOA, check the association’s governing documents to learn about the HOA’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 Rhode Island, unless the declaration provides otherwise, a COA is permitted to include certain charges in its lien such as:
- past-due assessments
- late charges
- attorney’s fees
- collection costs
- sums expended by the COA for taxes, superior liens, or otherwise to protect its lien, and
- interest at a rate established by the association, but not greater than 21% per year (R.I. Gen. Laws § 34-36.1-3.16(a),(i), § 34-36.1-3.15(b)(1)).
To find out which charges a Rhode Island HOA may include in its lien, check the association's governing documents.
Notice of Lien Required
Once the common expenses have been delinquent for at least 60 days, the COA must send a notice (by certified mail, return receipt requested, and first class mail) to the condo owner stating the amount of the delinquency (R.I. Gen. Laws § 34-36.1-3.16(b)(4)).
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?)
In Rhode Island, a COA’s lien is prior to all other liens, except for:
- liens and encumbrances recorded before the declaration is recorded
- liens for real estate taxes and other governmental assessments, and
- a first mortgage or deed of trust recorded before the date on which the assessment sought to be enforced became delinquent (R.I. Gen. Laws § 34-36.1-3.16(b)).
To find out the priority of an HOA lien in Rhode Island, check the association’s governing documents.
COA Super Liens
Under certain circumstances, a COA lien for delinquent assessments may have priority over a lender’s first mortgage or deed of trust. This is called a super lien. In Rhode Island, six months worth of delinquent common expense assessments (including any costs and reasonable attorney's fees) have super lien status (R.I. Gen. Laws § 34-36.1-3.16(b)(2)). (Learn more in Nolo’s article Homeowners’ Association Super Liens.)
Requesting a Statement of Assessments Due from a COA
If you make a written request, the COA must provide you with a statement setting forth the amount of the unpaid assessments within ten business days after it receives your request (R.I. Gen. Laws § 34-36.1-3.16(h)).
COA and HOA Foreclosures in Rhode Island
If you default on the assessments, the COA or HOA 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.)
If you default on the assessments, a COA in Rhode Island may sell the condo at a foreclosure sale after giving the required notices.
The COA must first mail written notice of the time and place of the foreclosure sale to the condo owner, at his or her last known address, by certified mail, return receipt requested. At least 20 days after mailing this notice the COA must publish the notice for two successive weeks in a public newspaper (R.I. Gen. Laws § 34-36.1-3.21(2)).
The sale date must be at least 15 days after the publication of the first notice (R.I. Gen. Laws § 34-36.1-3.21(2)).
Statute of Limitations for COA Liens
A COA must start the foreclosure within six years after the full amount of the assessments becomes due otherwise the lien is extinguished (R.I. Gen. Laws § 34-36.1-3.16(e)). This is called the statute of limitations.
To find out about an HOA’s right to foreclose if the owner becomes delinquent in paying the assessments, read the association’s governing documents.
What to Do if You Are Facing Foreclosure by a COA or HOA in Rhode Island
If you are facing a COA or HOA foreclosure, you should consult with an attorney licensed in Rhode Island 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.)