Homeowners’ Associations (HOAs) can be difficult to deal with. They are typically known for enforcing rules and regulations and handing out fines for violations. Dealing with an HOA be especially difficult if they’re threatening you with an HOA foreclosure.
It’s important for homeowners to know that some HOAs can force a foreclosure if you’re behind on your HOA fees. While an HOA foreclosure depends on the specific rules of your HOA, it is common for HOAs to be able to foreclose on properties.
If your HOA is threatening you with foreclosure, it’s a good idea to contact an attorney. A foreclosure attorney can help keep you informed of all your rights and options while helping you explore options to defend your home. Contact Denbeaux & Denbeaux Law today to learn more about how we may be able to help you protect your home from foreclosure by your HOA.
How Do HOA Agreements Work?
An HOA is a body that enforces the community’s rules; they’re common in certain neighborhoods and developments. When you move into an area or neighborhood that has an HOA, you agree to join the HOA by signing an agreement. HOAs usually have annual fees, and when you join the HOA, part of your agreement is that you will pay the regular fees.
HOAs have Covenants, Conditions, and Restrictions (CC&Rs). This is the actual agreement you sign that outlines what they can and can’t do or enforce. Some HOAs have clauses in their CC&Rs that allow them to pursue foreclosure due to HOA fees. CC&Rs typically outline when a homeowner association can foreclose and how they should proceed with the foreclosure process.
HOA Fees and Foreclosure
A homeowner association fees foreclosure can be triggered by a failure to pay assessments and fees. Even if you’re only behind by a few hundred dollars and your mortgage payments are up to date, you could still lose your home to a past-due HOA fees foreclosure.
When you fail to pay HOA fees, the HOA can file to place a lien on your property. A lien is used to discourage the sale of a property by informing anyone who looks into your property, including mortgage companies or potential buyers, that there is a debt issue with your property.
Once the lien is filed, the HOA can pursue foreclosure to force the sale of the property to recoup the debt you owe them. In order to remove the lien from your house, you will need to settle your debt with the HOA.
If you are unable to pay your past due HOA fees and your home is foreclosed on, you may have the opportunity to buy your home back. Some states may let you repurchase your home by settling your HOA debt by paying the amount you owe plus fees.
In New Jersey, an HOA foreclosure takes precedence over a mortgage foreclosure. This means if there is a mortgage foreclosure already underway on your home and your HOA forecloses, the mortgage foreclosure will become secondary. It can get very complicated if you have multiple foreclosing parties on your property at the same time, so we highly recommend contacting our experienced foreclosure attorney to help.
HOA Foreclosure Defenses
There are a variety of defenses that you may be able to use against a homeowners association dues foreclosure. Working with an experienced foreclosure attorney can help you find the best defense for your particular case.
Unsanctioned Assessments
An unsanctioned assessments defense claims that the HOA is imposing an assessment, such as foreclosure, that the CC&Rs don’t authorize them to take. In this situation, if you fail to pay your fees and the HOA pursues a foreclosure, both the lien and the foreclosure are nullified.
Erroneous Accounting
If a homeowners association foreclosure is proceeding due to a failure to record your payments correctly, your lien may be voided. If inaccurate accounting led to the HOA foreclosure, once the inaccuracy is brought to the attention of the HOA, they should stop the foreclosure process and void your lien.
Non-Compliance
States may have laws outlining how an HOA can go about foreclosure. You can use this to fight foreclosure if your HOA doesn’t comply with these state laws. Using non-compliance with foreclosure statuses can be a difficult defense because you need to fully understand the state law surrounding HOA foreclosure. If you plan on using this foreclosure defense, it’s a good idea to consult an attorney before starting your defense. In New Jersey, we have more complex foreclosure laws than in other states, including in HOA foreclosures.
Inaccurate Recording
In some states, HOAs are required to record the lien when pursuing a foreclosure. If your HOA does not follow this correctly, you can raise a wrongful lien claim against your HOA. This has the potential to invalidate the HOAs foreclosure on your home.
Contact an Attorney Today
HOA foreclosures are serious. If your HOA is threatening to foreclose, it’s important that you treat it like a legitimate foreclosure with the same weight as a foreclosure from a mortgage company.
Foreclosures are detailed and nuanced. Working with an attorney can help make the process less stressful while also giving you a better chance at success. If you are facing foreclosure, don’t wait to contact an attorney.
Joshua Denbeaux is an experienced New Jersey foreclosure attorney who fights to protect your rights and keep you in your home. Contact us today to learn more about how we may be able to help you.
