Can an HOA Foreclose If You’re Behind on Dues But Current on Your Mortgage?

If you stay current on your mortgage payments but not on your monthly HOA dues, can the HOA foreclose? Probably. Any creditor with a lien on your home has the legal right to foreclose.

So, if the HOA has a lien on your property because you didn't pay the assessments or dues, it might decide to start a foreclosure. Whether you're current or not on your mortgage payments doesn't matter.

How Homeowners' Associations Handle Delinquent Dues

HOAs use the assessments collected from homeowners to pay to maintain common areas, provide amenities (like swimming pools and parks), and fund community services. When homeowners fail to pay their dues, the HOA typically has specific procedures in place to handle delinquent accounts.

Usually, the HOA first will send a written notice or reminder about the missed payments, outlining the amount owed, any late fees, and the timeline for resolving the delinquency. If the homeowner doesn't bring the account current, the HOA might escalate the matter by imposing fines and charging interest on the overdue amounts.

If the homeowner still doesn't pay, many HOAs can then take additional steps, such as suing the homeowner for a money judgment and placing a lien on the homeowner's property. (In most cases, the HOA gets a lien automatically without needing to record anything with the county.) This lien can affect the homeowner's ability to refinance or sell the property until the dues are paid. A lien also gives the HOA the ability to foreclose.

Can an HOA Foreclose?

An HOA can foreclose its lien if state law and the community's Covenants, Conditions, and Restrictions (CC&Rs) allow it to do so, which they typically do.

HOA Foreclosure Process

The foreclosure will be judicial or nonjudicial, depending on the law in your state and the circumstances. The HOA will file a lawsuit against you in state court to start a judicial foreclosure. For a nonjudicial foreclosure, the lender must follow specific procedures set out by state law.

The CC&Rs might also contain specific requirements for foreclosing an HOA lien.

State Laws on HOA Foreclosures

State laws often govern HOAs and HOA foreclosures. These laws vary widely from state to state. Some state HOA laws set limitations on the authority of HOAs, such as limiting the circumstances under which they can foreclose. For example, in California, an HOA can't foreclose unless the delinquent amount is $1,800 or more, not including any accelerated assessments, late charges, fees and costs of collection, attorneys' fees, or interest, or the assessments secured by the lien are more than 12 months delinquent. (Cal. Civ. Code § 5720 (2024).)

Because state laws differ, you need to check your state's laws if you're behind in HOA payments to find out exactly what recourse the HOA might have. If you need help finding the law, some states even have agencies or ombudsmen dedicated to handling HOA-related questions, offering homeowners an avenue for resolving disputes outside of court. You can also talk to a lawyer in your state.

Can the HOA Foreclose If You're Behind on Dues But Current on Your Mortgage?

Yes, an HOA can often foreclose on your home if you're behind on dues, even if you're current on your mortgage (subject to any restrictions under state law, such as the limitation in California noted above).

If an HOA Forecloses, What Happens to the Mortgage?

HOA liens are often junior in priority to a first mortgage. CC&Rs typically contain a provision that makes an HOA lien subordinate to any first mortgage, even if the HOA lien is a prior lien. State law also sometimes says an association lien is junior to a first mortgage. So, in an HOA foreclosure in this scenario, the HOA would foreclose subject to the mortgage.

Why the HOA Might Want to Foreclose Subject to a Mortgage

The HOA doesn't have to consider that you're current on your mortgage payments when it decides whether to start a foreclosure. Sometimes, beginning a foreclosure is an HOA tactic to get you to pay your HOA dues. If you're current on your mortgage payments, losing your home to an HOA foreclosure would be pretty unwise.

Can an HOA Foreclosure Wipe Out the Mortgage?

Some states give an HOA lien (or some portion of it) super-lien status. HOA super liens get priority over a first mortgage, usually for a specific number of months' worth of delinquent assessments.

Foreclosing an HOA super lien might, depending on state law, eliminate the mortgage. For this reason, the mortgage lender usually pays off a super-lien amount to stop a foreclosure and keep the mortgage lien in place. So, if you live in a super-lien state, the HOA might initiate a foreclosure because it knows that if you don't pay, the first-mortgage lender probably will.

How to Prevent an HOA Foreclosure

If your HOA is foreclosing due to unpaid fees, you might be able to stop the process. You could, for example, pay off the full amount you owe or settle the debt for a lesser amount.

What Are the Consequences of an HOA Foreclosure?

Clearly, the most severe consequence of an HOA foreclosure is that you could lose your home. If you let the foreclosure go through all the way to a sale, you'll lose your ownership rights, and the buyer at the foreclosure sale, which could be the HOA or a third party, such as an investor, gets ownership of the property. You could potentially lose the equity you've built up in the property, which might be a significant financial loss.

In addition to losing the home, a foreclosure can negatively impact your credit for years, making it more difficult to get credit or loans in the future or you might have to pay a higher interest rate to borrow money.

After an HOA Forecloses on a Property

You might be able to reclaim ownership of your home after an HOA foreclosure if your state provides a right of redemption. Redemption laws covering HOA foreclosures vary from state to state.

Even if your state law doesn't provide a specific right of redemption after an HOA foreclosure, your state might have another law providing a redemption period following the foreclosure of a mortgage lien, which could also apply to an HOA foreclosure.

But some states don't provide a right of redemption at all.

Recent Legal Updates on HOA Foreclosure

Many states are amending or adding new laws governing HOAs and restricting their ability to foreclose on homeowners. For example, in 2024, Florida passed a Homeowner's Bill of Rights that covers HOAs. As of July 1, 2024, HOAs can't make certain types of rules, such as prohibiting residents from parking in their own driveway, fining residents for leaving garbage cans out on trash day, restricting the use of reasonably hidden clotheslines, and more. Another Florida law that became effective July 1, 2024, HB 59 (2024), requires HOAs to provide copies of all association rules and covenants to every current and new member.

In 2024, a new Colorado law (House Bill 1337) limited the attorneys' fees an HOA can charge to 50% of the assessments and any money owed to the HOA or $5,000, whichever is less. (The limitation amount will be adjusted each year for inflation.) (Colo. Rev. Stat. § 38-33.3-123 (2024).)

To find out if your state passed any similar laws, talk to your state's agency or ombudsman dedicated to handling HOA-related questions (if there is one) or a lawyer.

Talk to a Lawyer If You're Facing an HOA Foreclosure

If you're behind in your HOA fees, consider contacting the HOA to arrange a payment agreement or another workout option before it initiates a foreclosure against you.

Consider talking to a lawyer if you need help negotiating with your HOA or if the HOA has already started a foreclosure. A lawyer can tell you about potential defenses to the foreclosure or help you work out a resolution with the HOA.