Wisconsin HOA and COA Foreclosures

If you default on HOA or COA payments in Wisconsin, the association can generally foreclose on your home.

If you own a condominium, single-family home, or townhome that’s part of a common-interest community in Wisconsin, you probably pay dues and assessments (collectively called "assessments") to a condominium association (COA) or homeowners' association (HOA). If you don’t make the payments, the association can most likely get a lien on your property that could lead to a foreclosure of your home.

Read on to learn more about COA and HOA foreclosures in Wisconsin.

Finding Wisconsin’s COA and HOA laws

In Wisconsin, the Condominium Ownership Act (Wis. Stat. §§ 703.01 through 703.38) governs COAs.

HOAs in Wisconsin are often incorporated as nonprofit corporations and are subject to the state statutes that govern such corporations, including Wis. Stat. § 779.70, which governs maintenance liens by nonprofit corporations. HOAs are also controlled by their governing documents, which include the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and bylaws.

How COA and HOA Liens Work

In most cases, a COA or HOA has the power to place a lien on your property if you become delinquent in paying the assessments. Generally, the lien will automatically attach to the home from the time that the assessments come due.

COA Liens

In Wisconsin, a COA is entitled to a lien if the association files a statement of lien in the county records within two years after the date the assessment becomes due. Once the lien is recorded, it is effective as of the date the assessment became due, regardless of when the claim is filed within the two-year period. (Wis. Stat. § 703.165(3)).

HOA Liens

If an assessment remains unpaid for a period of 60 days from the date of the levy, an HOA may file a claim of lien. The HOA must file its lien in the county records within six months of the due date. (Wis. Stat. § 779.70(4)(a)).

If you’re part of an HOA, check the association’s governing documents to learn more about the association’s right to place a lien on your home if you don’t pay the assessments.

Charges the COA or HOA May Include in the Lien

State law and the COA or HOA’s governing documents will usually set out the type of charges that may be included in the lien.

Under Wisconsin law, unless the governing documents provide otherwise, a COA is permitted to include the following in its lien:

  • past due assessments
  • fines
  • actual collection costs, and
  • interest at a rate set by the COA, but no more than the legal rate. (Wis. Stat. § 703.165(3),(6)).

To find out which charges a Wisconsin HOA may include in its lien, check the association's governing documents.

Lien Priority

Lien priority determines what happens to other liens, mortgages, and lines of credit if a COA or HOA lien is foreclosed. (To learn more about lien priority and HOA foreclosures, see What happens to my mortgages if the HOA forecloses on its lien?)

Priority of COA liens. In Wisconsin, a COA lien is prior to some other kinds of liens, including:

  • tax liens
  • construction liens filed before the assessment became due, and
  • a first mortgage lien recorded before the assessment became due. (Wis. Stat. § 703.165(5)).

Priority of HOA liens. An HOA’s governing documents often address lien priority, and typically state that HOA liens are subordinate to a first mortgage. To find out the priority of an HOA lien in Wisconsin, check the association’s governing documents.

COA and HOA Foreclosures in Wisconsin

If you default on the assessments, the COA or HOA may foreclose. A common misconception is that the association can’t foreclose if you’re current with your mortgage payments. But the association’s right to foreclose has nothing to do with whether you’re current on your mortgage payments.

COA Must Provide Notice Before Foreclosing

A COA must mail written notice to a condo owner ten days before starting a foreclosure. (Wis. Stat. § 703.165(7)).

How COA and HOA Foreclosures Work

In Wisconsin, a COA may foreclose its lien in the same way that a mortgage on real property is foreclosed. (Wis. Stat. § 703.165(7)). Because mortgage foreclosures in Wisconsin are judicial, this means the COA will file a lawsuit to begin the foreclosure.

To find out about an HOA’s right to foreclose if you become delinquent in paying the assessments, read the association’s governing documents.

Statute of Limitations for COA Liens

A COA must start the foreclosure within three years after recording the lien, otherwise it loses the right to foreclose. (Wis. Stat. § 703.165(7)).

Talk to a Lawyer

If you’re behind in assessments and facing a COA or HOA foreclosure in Wisconsin, consider consulting with a local attorney to discuss all legal options available in your particular circumstances.

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