Can an HOA Force You to Pay Dues?

When a mortgage becomes too expensive, you may feel tempted to default on homeowner association dues, but unpaid HOA dues can cost you your home. The HOA can force you to pay dues, but this depends on what actions the HOA takes against the debt. Bankruptcy can eliminate HOA dues but not always.

Identification

An HOA can force payment on a debt just like any other creditor. For instance, the HOA can file a lawsuit in small claims court and obtain a salary garnishment order or a levy against your bank account. Whether the HOA actually files a lawsuit is another story, because the legal expenses may exceed the value of the debt or come close to it, making a lawsuit prohibitively expensive.

Potential

The HOA can file a lien against your property. You must satisfy the debt to remove the lien, but the HOA can foreclose on your property. Although foreclosures because of unpaid HOA dues are rare, this tactic became more common after the 2008 housing bubble caused a rapid increase in HOA delinquencies. In 2009, for instance, the HOA of the South Side community forced foreclosure on 21 percent of the homes in the area due to unpaid HOA debt, according to The Consumerist website.

Bankruptcy

Bankruptcy allows you to discharge HOA dues as long as the association does not have a lien against your property. This means you must file before the HOA takes you to court. Also, you cannot include in a bankruptcy petition unpaid HOA dues incurred after you file bankruptcy. However, states have some control over federal bankruptcy law, so your state may have stronger or weaker protections for an HOA.

Tip

When one homeowner goes delinquent on his HOA dues, the other residents have to pick up the tab, so you should try to pay off the debt. The HOA will probably agree to an arrangement that results in you paying your dues. For instance, you can ask to pay off the debt in installments over the next six months. Also, warn the HOA as soon you know you cannot pay dues to prevent the association from filing a lawsuit.

References

• SunSentinel.com; Not Paying Your HOA Fees? Don't Invite Guests Over to Visit; Daniel Vasquez; March 2010
• Lawyers.com: Garnishment and Forcing Debt Payment
• The Consumerist; Homeowners Association Will Foreclose On Your House If You Don't Pay $267.58; Meg Marco; March 2009
• "Herald-Tribune"; Bankruptcy Won't Excuse HOA Dues; November 2008
• KomoNews.com; Neighbors Foreclose on Neighbors Over Unpaid HOA Dues; Paul Weber; June 2009