If you live in a private community setting—whether it’s a condominium, townhouse, or single-family home—in Virginia, you’re likely responsible for paying dues and assessments to a homeowners’ association (HOA) or a condominium owners’ 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.
The Property Owners’ Association Act (Va. Code Ann. § 55.1-1800 and following) governs HOA activities in Virginia, while the Condominium Act (Va. Code Ann. § 55.1-1900 and following) applies to condominiums created after July 1, 1974 (and supersedes 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 Before Buying: How to Read the CC&Rs or Homeowners' Association (HOA) Documents.)
Most HOAs and COAs have the power to place a lien on your home if you become delinquent in paying the monthly dues 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.
In Virginia, an HOA is entitled to a lien if you don’t pay the assessments. 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. § 55.1-1833).
The HOA must mail written notice to the homeowner at least ten days before filing the lien. (Va. Code Ann. § 55.1-1833).
A COA in Virginia is also entitled to a lien if a condo owner doesn’t pay the assessments. 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. § 55.1-1966).
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, that lien is prior to all other liens and encumbrances, except for:
A common misconception is that the association can’t foreclose if you’re current with your mortgage payments. But if you default on the assessments, the HOA or COA may 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.
Preforeclosure notice. As part of the foreclosure, 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. § 55.1-1833, § 55.1-1966).
Publication requirement. The HOA or COA must advertise the time, date, and place of the sale, among other things, in a newspaper, usually once a week for four weeks. (Va. Code Ann. § 55.1-1833, § 55.1-1966).
Notice of the sale. 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 no less than 14 days before the sale. (Va. Code Ann. § 55.1-1833, § 55.1-1966).
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. § 55.1-1833, § 55.1-1966).
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. § 55.1-1833, § 55.1-1966).
If you’re facing an HOA or COA foreclosure, consider talking to a lawyer licensed in Virginia to discuss all legal options available in your particular circumstances.