Can the Homeowners’ Association (HOA) Foreclose If I Don’t Pay My Dues?
Many people have been led to believe that a homeowners’ association cannot foreclose on their home. That is not true! Homeowners’ associations foreclose on property everyday across America and very likely everyday in North Carolina.
If your neighborhood has a homeowners’ association, you received and signed documents acknowledging the association’s rights when you purchased your lot or home. As a matter of fact, participation in the homeowners’ association was not an option for you, it was a requirement if you wanted to purchase your lot or home! Many people do not read the documents and realize the requirements and powers of the homeowners’ association when they purchase their property, since it was just one of the many documents signed the day of closing.
Your neighborhood will have bylaws and covenants that are specific to your homeowners’ association, but it is under North Carolina General Statutes Chapter 47F that all homeowners’ associations obtain their power. Under Chapter 47F-3-116 Lien for assessments, the homeowners’ association can place a lien on your home or lot if you do not pay your assessment. If the amount owed is “…unpaid for a period of 30 days or longer…” the homeowners’ association may file a lien on your property with the Clerk of Superior Court. The statute provides the timelines, procedures and notice requirements for filing the lien. If the homeowners association files a lien on our property and the assessment remains unpaid for 90 days or more, the homeowners’ association may foreclose on the property just like your mortgage companies.
Unfortunately, many homeowners ignore the letters they receive from their homeowners’ association. Most often the letters are ignored because the homeowner does not realize the power provided to the homeowners’ association. In other cases, the amount owed to the homeowners’ association seems immaterial compared with the monthly mortgage payment(s), so the homeowner does not expect the association to proceed with foreclosure. Regardless, the homeowners’ association has the right to, and often will, foreclose for what might seem like small dollar amounts. There have been many cases when the attorney’s fee associated with the foreclosure is more than the homeowners’ assessment amount. The key is to never ignore the letters from the homeowners’ association; otherwise, you may discover you no longer own your home or lot. Filing Chapter 13 bankruptcy can stop foreclosure proceedings, so you may want to see if this is an option if you find the homeowners’ association foreclosing on your property.
Can I buy my a lien against my property at a foreclosure sale (hopefully at a discount).
Darryl,
I’m not sure I completely understand your question. If your house has been foreclosed on then you can try to make an offer at the actual foreclosure. However, it may be difficult to get the appropriate financing while going through a foreclosure. Best of luck!
Duncan Law Team
I live in texas and recieved notice of foreclosure due to non payment of hoa fees can they take my home or do they place a lien on the property can i pay the amount owed before court date
Cindy,
Your homeowners association does have the right to foreclose on your property if you do not pay your dues. Typically, though, they don’t want your house…they just want the money they are owed. I would suggest contacting them and seeing if you can get set up on a repayment plan of some sort. If you do not want to stay in the house then you could continue to not pay them and see if the mortgage company will pay them off so they can sell the property to someone else. My first stop would be to contact the attorney representing the HOA and see what options you have. Good luck!
I sold my house this morning and low & behold, I owed my HOA $3500 at closing. I didn’t even think I was a member until the closing attorney showed me the documents I signed 5 years ago when I purchased the house. The HOA didn’t file a lien but expected me to pay 5 years worth of fees & finance charges. I never received one invoice because the HOA sent them to a mortgage company in Jacksonville, FL. It wasn’t my mortgage company. It wasn’t even my state. Do I have any legal recourse to get any of that money back?
Jamie,
I hate to be the bearer of bad news but I think it’s highly unlikely you get any of that money back. The mortgage company probably automatically had a lien against your property without having to actually file for one. Also, the time, money and energy you put into filing a lawsuit, etc. etc. you would recover very little money on the net end of things. Good luck Jamie!
While still in total control of our HOA, our declarant recorded an amendment to our declaration that gave a perpetual pool easement to a neighboring HOA in return for their use of our pool and sharing of the pool expenses. This arrangement has been in effect since 1990 without any issues. The neighboring HOA was also a member of our community’s master association, They recently seceded from the master but want to continue the pool-sharing arrangement with our HOA. This has caused considerable friction. Can our homeowners invalidate the 1990 pool sharing amendment, based on § 47C-3-105? We realize that amending the declaration will require a 67% affirmative vote of our owners.
Bob,
I appreciate your question but I’m not allowed to give specific legal advice. I can answer general questions but not specifics like you are asking in your case. Even if I could, I would still probably direct you to an attorney that specifically focuses on homeowners association work. You are running into contractual issues and would need an attorney that specifically focuses on those areas. Good luck!