Homeownership is full of joy, but it has its fair share of pains. If your home is mortgaged, the possibility of entering foreclosure can keep you awake at night. And if you're one of the 74.1 million Americans living in homeowner association communities, an HOA foreclosure can add to your worries.
Although covenants, conditions, and restrictions (CC & Rs) vary from HOA to HOA, residents are typically required to pay HOA fees and assessments. If you default on these payments, HOA foreclosure can enter the fray.
In this article, we're shedding more light on the HOA liens and foreclosures, helping you avoid unnecessary homeownership chaos.
Understand the Laws in Your State
State statutes determine whether an HOA can or cannot foreclose a home because the owner has fallen behind on HOA fees and assessments. As such, the first step is to know what the law in your state says.
Georgia is not an HOA super lien state, meaning HOA liens don't gain supremacy over other lines, such as mortgage or property tax liens.
However, this doesn't mean Georgia HOAs cannot begin the foreclosure process. If you have no other liens on your property, for example, an HOA lien is enough to make you lose your home.
The HOA Foreclosure Process
Your HOA's CC & Rs must give the HOA the power to foreclose on homes whose owners haven't paid the necessary dues. When you moved into the community, you agreed to those terms and conditions, so by the time foreclosure wheels start turning, you're running out of time to save your home.
Generally speaking, HOAs aren't in the business of foreclosing homes. Their primary goal is to improve the HOA community. To meet the community's expenses, HOA management must collect dues from every homeowner.
If you're late on your dues, the management will send you a reminder. A fine might be levied on a late payment, in accordance with the CC & Rs. However, if it's been a few months and you haven't settled your balance, the HOA can file a lien with local authorities.
An HOA lien puts limitations on your homeownership rights. You cannot rent out or sell the home before settling the HOA debts, for instance.
If you're still unresponsive after an HOA lien, your HOA may file a foreclosure notice with the county court. This usually happens after about 60 days. More often than not, this is a measure of last resort after attempts such as wage and/or bank account garnishment have failed.
Don't Fall Victim to HOA Foreclosure
Like any type of home foreclosure, an HOA foreclosure is long and tedious. Homeowners have a right to fight the foreclosure if their rights have been violated, but if everything has been done by the book, chances are you'll lose your home.
Although you can pay what you owe at any point during the process, and the foreclosure process will come to an end, it's prudent to keep up with your payments.
If you need more advice about your West Cobb, GA, HOA home or need association management services, PMI Cornerstone is only a call away.
