A foreclosure on a home in the homeowners association usually happens due to one of two main reasons that are usually shared on the neighborhood website. Either the homeowner has failed to make mortgage payments or they neglected to pay their HOA fees or assessments. The homeowners association may foreclose on your home despite keeping mortgage payments current if HOA fees and assessments are not paid. What defenses can you use should you ever go through a foreclosure process?
Fully Understand The Governing Documents
A foreclosure is the last event any homeowner wants to encounter but the economic situation is unpredictable over the last few years. The possibility of a company downsizing is more likely than ever which means you could be without a source of income. Know the governing documents of the homeowners association prior to buying a home so you understand your possible defenses and the rights of the HOA board.
HOA fees or assessments may only account for a thousand dollars or less but the HOA board may choose to foreclose on your home anyway. There should be a part in the governing documents that talks about how and when the homeowners association may pursue a foreclosure.
If not then the association may not be authorized to start the foreclosure process. As well, there could be a limit on the amount of fees owed or a time limit before the board can take action depending on your state. Premature foreclosure allows a homeowner to use the defense that the association failed to follow state statutory requirements.
Are There Errors In Your Process?
Errors are possible in the accounting of your HOA fees and the application of your payments. Any foreclosure process that has incorrect records may be considered invalid and prevent the board from foreclosing on your home. Follow the neighborhood website so you remain aware of your defenses but remember HOA laws vary widely from state to state!