Over six million families choose to live in one of Texas' 22,300 HOAs. They choose these communities to enjoy benefits like high home values, shared amenities, and a sense of neighborliness.
These perks come at a high price for homeowners, who must contribute to annual HOA fees to retain their place in the community. Those who fall behind on their fees or break the community's rules could find themselves facing an HOA foreclosure.
Does that seem like an extreme measure to you? Read on to find out more about how it works.
What Is an HOA Foreclosure?
The availability of shared amenities is one of the biggest contributors to an HOA's success. Homeowners' HOA fees contribute to the upkeep of these facilities.
Residents must use these amenities in line with the HOAs CC and Rs. If they break these homeowners association rules, they may also face fines.
Failure to pay these amounts on time means the HOA can place a lien on your home. If that doesn't prompt you to pay the outstanding fees, they can pursue an HOA foreclosure, even if your mortgage payments are up-to-date.
The HOA Lien Process
Under Texas law, all conditions for foreclosure must be documented in the HOA's CC and Rs, and the HOA may only proceed with foreclosures when these conditions are met.
When HOA dues and fees remain unpaid, the HOA board must request payment from the homeowner via mail, email, or telephone. They must allow the homeowner three months to set up a payment arrangement for the past-due amount.
If these collection tactics are ineffective, the HOA can contact a collections agency to take the matter further. HOA liens and foreclosures are always the last resort.
Before placing a lien on the homeowner's property, the HOA board must send two notices, thirty days apart, to the homeowner. They can send the first notice by first-class mail or email, but the second must be delivered by certified mail.
After that, the homeowner has 90 days to respond before the HOA can place a lien on their property.
The HOA Foreclosure Process
Once the homeowner's fees are over 120 days past due, the HOA board can foreclose on their property.
The judicial procedure is as follows:
- The HOA files a lawsuit against the homeowner
- The court sets a date for the hearing
- The judge decides on a verdict
If the judge rules in favor of the HOA, the property is sold via public auction, and the proceeds are used to pay the balance on the homeowner's mortgage, plus any money owed to the HOA.
How to Prevent HOA Foreclosure
You can prevent HOA foreclosure by paying the amounts you owe any time before the home is sold. You may also choose to defend yourself against foreclosure if you can prove that the HOA's records are inaccurate, or if they didn't follow the above procedure correctly.
It's always best to get legal advice when facing an HOA foreclosure.
Avoid Foreclosures in your HOA
An HOA foreclosure is a time-consuming and unpleasant occurrence that rarely benefits either party. It's best to avoid this drawn-out process by acting swiftly in cases where homeowners have past-due fees.
An HOA management company can help you implement efficient fee collection and accurate record-keeping to promote prompt payments.
PMI Fort Bend is here to assist you with every aspect of managing your HOA, including fee collections. We have an excellent record in terms of fee collection and promoting community harmony.
Talk to us today about getting your HOA on the right track.
