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  • Writer's pictureJoseph Dragon

What is an HOA Foreclosure?

What is an HOA? An HOA, or “Homeowners Association,” is an organization consisting of community members. A Board of Directors, usually volunteers elected into the position, head the HOA. The purpose of an HOA is to help enforce community regulations and rules, maintain property areas and make sure things are overall cohesive in the communal area. What are HOA Fees? When you purchase a home in a community within a homeowners association, you must pay HOA dues each month separate from your mortgage. These fees are used for the maintenance and upkeep of common areas. Sometimes utilities, such as water, trash, and sewage, are also included in the HOA Fee. The fee can vary based on the location of your community and the amenities that are offered. What Happens if I Don’t Pay the HOA Fee?

Even if you pay your mortgage on time, there can be severe consequences for not paying your HOA Fees.

Initially, the HOA will likely use traditional means to collect the debt. For example, they may reach out to you via letter or take away privileges to use common community facilities. They may also file a lawsuit to get a money judgment placed against you.

If you remain delinquent, the HOA can place a lien on your property. Such a lien can block the property title, disabling your ability to refinance or sell your home, and you could be evicted from your home. In addition, overdue assessments can be accompanied by penalties, late charges, fines, as well as interest.

What is an HOA Foreclosure?

If the preceding tactics don’t work, your home could go into what is known as an HOA Foreclosure. An HOA Foreclosure is the legal process of the Homeowners Association taking ownership of your property and selling it to recover any amounts owed to them.

What can I do if I am threatened with or have received a Notice of Foreclosure?

The best thing to do would be to obtain legal counsel from a Real Estate Attorney. However, each situation is different, and various options may be available to stall or avoid HOA Foreclosure altogether.

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