Can your HOA initiate foreclosure proceedings if you’re behind on payments?

For those who live in planned neighborhoods, subdivisions, or condo complexes, HOAs and COAs are common organizations, as are the associated fees, often referred to as dues in Texas. Usually paid monthly or quarterly, the purpose of these dues is to cover costs related to maintenance of common areas and shared spaces, such as community pools.

These dues are generally mandatory, meaning property owners can’t opt out of paying them. Property owners also cannot simply decide not to pay them if they disagree with the HOA or COA. HOAs and COAs have the power to enforce payment, up to and including initiating foreclosure for non-payment.

HOA Foreclosures

Foreclosures are generally a last resort after other methods of recouping the unpaid dues have failed. Each HOA or COA should have written procedures and notice requirements about how the association will pursue unpaid dues and any related penalties, such as interest or late fees.

If a homeowner ignores requests from an HOA or COA to become current on dues, an association’s next step is to put a lien on the property. With a lien, the HOA or COA can collect the unpaid fees if the owner sells the property.  

HOA and COAs may also send unpaid dues to a collection agency. They may report the failure to pay to credit bureaus.

In some cases, the HOA or COA may initiate foreclosure proceedings against the property when other avenues have been unsuccessful. With foreclosures, HOAs, and COAs must follow notification and time requirements before selling the property. This is to give the property owner time to pay the outstanding balance to avoid foreclosure proceedings.

Foreclosures can be judicial or non-judicial, although the majority of foreclosure cases in Texas are non-judicial. The courts aren’t officially involved in non-judicial foreclosures, which are sometimes called expedited foreclosures.

Hire a Skilled Lawyer Who Knows Texas

If you have questions about foreclosures and when HOAs and COAs can foreclose on properties, the attorneys at Manfred Law can help. Call us at 713-547-5460 or contact us online to schedule your consultation.