If you live in a house, condo, or townhome that is part of a common interest community, you are most likely responsible for paying dues and assessments to the homeowners’ association (HOA) or condominium association (COA). If you don’t pay, in most cases the HOA or COA can get a lien on your property that could lead to a foreclosure.
Read on to learn about the particular requirements for HOA and COA foreclosures in Utah.
Utah HOA and COA Lien Laws
There are two separate sets of statutes in the Utah Code that govern association liens. One covers HOAs in planned communities (the Community Association Act) and the other covers COAs (the Condominium Ownership Act). The two sets of laws are very similar.
How HOA and COA Liens Work
Almost all HOAs and COAs have the power to place a lien on the property if the homeowner becomes delinquent in paying the monthly dues and/or any special assessments (collectively referred to as “assessments”). Once a homeowner becomes delinquent on the assessments, a lien will usually automatically attach to that homeowner's property.
In Utah, the recording of the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) or Declaration of Condominium constitutes record notice and perfection of the lien (Utah Code Ann. § 57-8a-301(1)(b), § 57-8-44(1)(b)).
An HOA or COA lien for unpaid assessments has priority over other liens on a lot or unit except:
- a lien or encumbrance recorded before the declaration is recorded
- a lien for real estate taxes or other governmental assessments, and
- a first or second mortgage or deed of trust recorded before a recorded notice of lien (Utah Code Ann. § 57-8a-301(4), § 57-8-44(4)). (Learn more about lien priority and what happens to a first mortgage in an association foreclosure in Nolo’s article What happens to my mortgages if the HOA forecloses on its lien?)
Charges the HOA or COA May Include in the Lien
Utah law sets out the types of charges that the HOA or COA may include in the assessments lien (Utah Code Ann. § 57-8a-301(1)(a), § 57-8-44(1)(a)). Unless otherwise provided in the declaration, the HOA's lien may include:
- Assessments. Of course, the HOA or COA can include amounts for unpaid assessments in the lien.
- Late charges. Charges for the late payment of assessments may be included in the assessments lien as well.
- Collection Costs. The association may include the costs expended in attempting to collect the past-due assessments in its lien.
- Court costs and reasonable attorney’s fees. The HOA or COA is entitled to include its court costs and reasonable attorney’s fees in the total amount due.
- Interest. The HOA or COA may also charge interest on unpaid assessments at the legal rate of interest or at the rate provided in the association’s governing documents, if those documents provide for a different rate (Utah Code Ann. § 57-8a-301(3), § 57-8-44(3)).
- Fines and other amounts that the association imposes. The association may also include fines and/or any other amount that the association is entitled to recover under the declaration.
Requesting a Statement of Assessments Due
If you make a written request to the HOA or COA, the association must provide you with a statement of the unpaid assessments that are due. The association can charge a fee up to $25 for this statement (Utah Code Ann. § 57-8a-311, § 57-8-54).
HOA and COA Foreclosures in Utah
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 Utah, the HOA or COA may foreclose an assessments lien by nonjudicial or judicial foreclosure, like a deed of trust or mortgage (Utah Code Ann. § 57-8a-302(1), § 57-8-45(1)). (Learn more about the difference between mortgages and deeds of trust and foreclosure laws and procedures in Utah.)
Notice Required in HOA and COA Foreclosures
Most HOA foreclosures in Utah are nonjudicial. At least 30 calendar days before initiating a nonjudicial foreclosure, the association must provide notice to the owner of the lot or unit that is the intended subject of the nonjudicial foreclosure (Utah Code Ann. § 57-8a-303(1), § 57-8-46(1)).
Homeowner Can Demand a Judicial Foreclosure
The HOA or COA cannot pursue the nonjudicial foreclosure if the owner mails the association a written demand for a judicial foreclosure within 15 days after the date of the postmark on the envelope of the association’s notice of nonjudicial foreclosure (Utah Code Ann. § 57-8a-303, § 57-8-46).
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 Utah 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.)