Virginia HOA and COA Foreclosures
If you default on HOA or COA dues and assessments in Virginia, the homeowners association can foreclosure on your condo, townhome, or house.
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If you live in a private community setting (whether it is a condominium, townhouse, or single-family home) in Virginia you are 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 Virginia.
Virginia HOA and COA Lien Laws
The Property Owners’ Association Act (Va. Code Ann. §§ 55-508 through 55-516.2) governs HOA activities in Virginia, while the Condominium Act (Va. Code Ann. §§ 55-79.39 through 55-79.103) applies to all condominiums created after July 1, 1974 (and supercedes the state’s older Horizontal Property Act). The two sets of laws are very similar when it comes to assessments liens, with a few minor differences.
In addition, the basic rights and responsibilities of every homeowner or condo owner can be found in the association’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and bylaws. (Find out more about what's in your CC&Rs and other relevant documents in Nolo’s article Before Buying: How to Read the CC&Rs or Homeowners' Association (HOA) Documents.)
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.
HOA Liens in Virginia
In Virginia, an HOA is entitled to a lien if you don’t pay the assessments (Va. Code Ann. § 55-516(A)). To perfect its lien (make it effective), the HOA must file a memorandum of lien in the clerk's office of the circuit court in the county or city in which the development is located within 12 months from the time the first assessment became due and payable (Va. Code Ann. § 55-516(B)).
The HOA must mail written notice to the homeowner at least ten days before filing the lien (Va. Code Ann. § 55-516(C)).
COA Liens in Virginia
A COA in Virginia is also entitled to a lien if a condo owner does not pay the assessments (Va. Code Ann. § 55-79.84(A)). To perfect its assessments lien, the COA must record the lien in the clerk's office of the circuit court in the county or city in which the condo is located within 90 days from the time the first assessment became due and payable (Va. Code Ann. § 55-79.84(C)).
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 Virginia, once the HOA or COA lien is perfected, it is prior to all other liens and encumbrances, except for:
- real estate tax liens
- liens and encumbrances recorded prior to the recordation of the declaration, and
- for HOA liens, sums unpaid on and owing under any mortgage or deed of trust recorded prior to the perfection of the assessments lien, and
- for COA liens, sums unpaid on any first mortgage or first deed of trust recorded prior to the perfection of the assessments lien and securing institutional lenders, such as banks (Va. Code Ann. § 55-516(A), § 55-79.84(A)). (Learn more about the difference between mortgages and deeds of trust.)
HOA and COA Foreclosures in Virginia
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 HOA or COA can foreclose. (Learn more about HOA liens and foreclosure.)
In Virginia, an HOA or COA may foreclose its lien nonjudicially, which means the foreclosure takes place without court supervision (Va. Code Ann. § 55-516(I), § 55-79.84(I)). (Learn more about How Nonjudicial Foreclosure Works.)
Nonjudicial Foreclosure Procedures for HOA and COA Liens
60-day notice to pay. The HOA or COA must first give notice to the homeowner or condo owner that he or she has at least 60 days to pay the debt and, if the debt is not paid, that the property will be sold in a foreclosure sale. The notice must also state that the owner has the right to bring a lawsuit challenging the existence of the debt or to raise another defense to the foreclosure (Va. Code Ann. § 55-516(I)(1), § 55-79.84(I)(1)).
Manner of advertising the foreclosure sale. The HOA or COA must then advertise the time, date, and place of the sale (among other things) in a newspaper once a week for four weeks. However, if the property or some portion of it is located in a city or in a county immediately contiguous to a city, the advertisement may instead be published on five different days, which may be consecutive. The foreclosure sale may be held on any day following the day of the last advertisement, but no earlier than eight days following the first advertisement nor more than 30 days following the last advertisement (Va. Code Ann. § 55-516(I)(5)(a), § 55-79.84(I)(1)(5(a)).
Notice to homeowner of foreclosure slae. The HOA or COA must also mail or personally deliver a copy of the newspaper advertisement (or a notice that contains the same information) to the owner. If mailed, the advertisement (or notice) must be sent by certified or registered mail at least 14 days before the sale (Va. Code Ann. § 55-516(I)(4), § 55-79.84(I)(4)).
Right to Cure
The homeowner or condo owner may prevent the foreclosure sale by paying the past-due assessments, plus all expenses and costs that the HOA or COA incurred in perfecting and enforcing the lien such as advertising costs and reasonable attorneys’ fees (Va. Code Ann. § 55-516(I)(3), § 55-79.84(I)(3)).
Statute of Limitations
An HOA or COA must initiate the foreclosure action or file a lawsuit to collect the debt within 36 months after the date the memorandum of lien is recorded (Va. Code Ann. § 55-516(E), § 55-79.84(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 Virginia 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.)