When homeowners pay their $200 to $300 per month in homeowners association (HOA) dues, they contribute to their local communities. When homeowners go through tough times, paying those dues gets difficult.
Homeowners don't always know what the HOA can do in response. How does an HOA get those fees back? Will skipping HOA dues in the owner portal lead to foreclosure?
While an HOA can foreclose on a home, this only happens under specific circumstances. Keep reading for more information on HOA foreclosure.
I Missed a Payment in My Owner Portal
Don't panic. An HOA will take several steps before initiating a foreclosure.
If you miss a single payment, you can pay as soon as possible or negotiate with your HOA for an extension. Your HOA has its own responsibilities set out by Austin, Texas, and won't leap to crush you beneath late fees and take your house. The association management won't take your home for that.
The first step of the process involves placing an HOA lien on your home. This indicates that the HOA has a creditor interest in your home that must be satisfied before you can collect money from the sale of the home.
HOA liens take precedence over many other types of creditor interests. While a mortgage stands above them, other creditors have to wait until the HOA lien is settled.
How Does HOA Foreclosure Start?
Homeowners who avoid paying their HOA dues for a long time will enter HOA foreclosure. Texas has both judicial and non-judicial foreclosure proceedings, but an HOA foreclosure will always proceed as a judicial foreclosure.
In a judicial foreclosure, the lienholder files a civil lawsuit against the homeowner. In some cases, the HOA can initiate an expedited process that proceeds more like a non-judicial foreclosure.
Either way, this process terminates when the creditor gets permission to sell or take ownership of the house.
HOA Foreclosure Redemption
If your fortunes change within six months of mailed notice of the foreclosure sale, you can initiate a process called foreclosure redemption. If you can pay off everything including attorney's fees and interest, you can get your house back.
Do HOAs Want Your Home?
Most HOAs don't want the hassle of dealing with a foreclosure. Association management companies and HOA boards have their own services to provide and duties to execute. Selling a home takes time and effort, as does renting the home out to recoup those dues.
Manage Your Finances
If you're at risk of HOA foreclosure, contact your HOA. Most HOA managers will want to find a way to keep you in your home rather than go through the complex and costly process of putting a lien on your home and foreclosing.
If you're part of an HOA looking for logistical assistance with liens, foreclosure, or other administrative tasks, contact PMI Austin Metro. Many of our team members have been part of the Austin community for two decades or more, and our knowledge of the laws and duties involved in Austin HOA management is second to none.
