Can you lose your home for not paying HOA dues? Yes!

The Raleigh News and Observer had an article today, “When Paying the Mortgage is Not Enough.” It tells of a family who nearly lost their home due to a $137 unpaid HOA dues balance.

It is a rude news flash to many people to learn that their Home Owners’ Association may be able to foreclose on their home for unpaid dues and assessments.
Yes. It happens.

It is imperative that Home Buyers recognize this fact, that dues are usually not voluntary, and that the HOA Bylaws typically have teeth in them allowing foreclosure for unpaid dues.
With some townhome and condo dues in the Raleigh Cary NC area in the $200/month range, this is a significant ongoing expense that must be met routinely.

And, if you have a home loan, the bank or investor will also be watching and may press foreclosure to protect their interests. Your ultimate responsibility to maintain your dues payments is spelled out in your Deed of Trust.

This is not meant as a screed against HOAs, which are commonly required in new construction communities. Cary is replete with them, although I live in a neighborhood that does not have one.
This blog post is just a “Heads Up” to people who may not recognize the gravity of falling behind in paying dues and assessments.

3 thoughts on “Can you lose your home for not paying HOA dues? Yes!”

  1. Only the bank that holds the mortgage can foreclose on your property. Only the government can place a lien on your property without court intervention. The bank will not be too worked up if you are paying your mortgage.

    HOA fees are not much different than any other bill- except they have a lot of paperwork to show a court and can get your wages garnished faster than some other collectors. They can also make your life difficult with postings on your home…etc. But all the talk about an HOA foreclosing on your home is not true- and a court will not place a lien for a few thousand dollars.

  2. Hi, Jim,
    Thanks for dropping in with a comment.

    I think the facts indicate that homeowners can lose a home to foreclosure for not paying their Association dues.
    Here’s one example, a foreclosure deed recorded by Breier Creek HOA who foreclosed due to non-payment:
    http://services.wakegov.com/booksweb/DocView.aspx?DocID=108282629

    And another publicized example, again in Brier Creek:
    http://abclocal.go.com/wtvd/story?section=news/abc11_investigates&id=7669730
    The recorded deed indicating foreclosure:
    http://services.wakegov.com/booksweb/DocView.aspx?DocID=108203191

    It’s my understanding that the good people in Raleigh are trying to amend the situation:
    http://abclocal.go.com/wtvd/story?section=news/abc11_investigates&id=8056790

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