HOA Foreclosure

Falling behind on HOA dues can lead to serious consequences, including foreclosure—even if you're current on your mortgage. Here's what to expect and what your options may be:

Notice of Default and Court Order

If you've received a Notice of Default and Election to Sell from your HOA, it means they’ve started legal proceedings to collect the unpaid dues. A court date will be set, and if the judge grants the request, the HOA will receive an order to sell your property through a public auction. The money from the sale will first go toward paying off the HOA lien. If you have a mortgage, that loan doesn't go away. You may still be personally responsible for it, and in many cases, the mortgage remains attached to the property even after the HOA foreclosure.

Unlike mortgage foreclosures, HOA liens are not automatically cleared when the home is sold. This can leave the property subject to ongoing legal or financial issues unless resolved.

If you’ve received a Notice of Sale from your HOA, don’t wait. You may be able to negotiate a payment plan to stop the foreclosure and keep your home. Keep in mind that you’ll likely be responsible for attorney fees and other costs the HOA incurred. Contact the HOA or their legal representative as soon as possible to explore this option.

You also have the right to sell the property before it goes to auction. This is often the best way to prevent foreclosure and protect your credit. Selling in advance ensures that all debts tied to the property are paid and avoids the negative impact of a foreclosure.

After the Sale: Redemption Period

Once the property is sold at a public auction, some states allow a statutory right of redemption: a limited period during which you may reclaim the property by paying what’s owed.

The terms and eligibility for this vary by state. Check the Notice of Intent to Sell, or contact your county assessor’s office or visit their website for information about your specific property.