If you live in a planned development, you’re probably part of a homeowners' association (HOA) or condominium owners’ association (COA). The HOA or COA is typically a nonprofit corporation responsible for managing and maintaining the community. The association has a lot of power over the residences and homeowners in a planned community. It creates and enforces the rules of the community, as well as determines how much members have to pay in dues and assessments (collectively referred to as “assessments”).
Residents who live in this kind of a community setting—whether it’s a condominium, townhouse, or single-family home—in Oklahoma usually have to pay assessments to their HOA or COA. If you fall behind in those 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 HOA and COA foreclosures and related laws in Oklahoma.
The Real Estate Development Act (Okla. Stat. tit. 60, §§ 852 through 858) governs owners' associations in general and Oklahoma’s condominium law is primarily contained in the Unit Ownership Estate Act (Okla. Stat. tit. 60, §§ 501 through 530).
Rules regarding the HOA or COA, including those regarding assessments liens, can also be found in the association’s governing documents, like the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) or Declaration of Condominium.
Generally, an HOA or COA has the power to place a lien on your property if you become delinquent in assessments. Once a homeowner becomes delinquent on the assessments, a lien will usually automatically attach to that homeowner's property.
An association must inform homeowners in writing at the time they become a member about the rules, restrictions, and the amounts they must pay—or potentially pay—to the association. Otherwise, the association isn’t entitled to a lien for unpaid assessments. (Okla. Stat. tit. 60, § 852(C)).
Lien priority determines what happens to other liens, mortgages, and lines of credit if an 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?)
Based on Oklahoma law, a COA’s lien is prior to all other liens, except for:
(To find out the priority of an HOA lien, check the association’s governing documents.)
Under Oklahoma law, a COA is entitled to include all unpaid common assessments in its lien. (Okla. Stat. tit. 60, § 524(a)). The governing documents might permit other types of charges as well.
For HOAs, typically, the association's governing documents will describe any charges that may be included in the lien. Generally, an HOA is permitted to include the following in its lien:
If you default on the assessments, the HOA or COA may foreclose. (Okla. Stat. tit. 60, § 524(b), § 852(C)). A common misconception is that the association can’t foreclose if you’re up to date with your mortgage payments. But the association’s right to foreclose has nothing to do with whether you’re current on your home loan payments.
If you’re behind in assessments and facing an HOA or COA foreclosure in Oklahoma, consider consulting with a local attorney to discuss all legal options available in your particular circumstances.