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Defending an HOA foreclosure

Foreclosure crises
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Did you know that If you owe dues or assessments to your homeowners’ association, they have a right to foreclose on your property? Many homeowners are unaware that an HOA can foreclosure on their home even if mortgage payments are made to the mortgage lender. The good news, a seasoned foreclosure defense attorney can help you save your home.

A homeowners’ association is the governing body of a real estate subdivision that enforces covenants, conditions, and restrictions of that subdivision. Those covenants, conditions and restrictions dictate the rules that HOA members must comply with as residents of the subdivision. The covenants, conditions, and restrictions may also provide for the collection of dues, or assessments, that the homeowner must pay to the HOA to take care of the subdivision’s common areas. Generally, there are two types of assessments that a homeowner must pay: regular assessments and special assessments.

Homeowners should be aware of all possible ramifications of falling behind on HOA payments, as an HOA can be a very powerful entity. A Homeowners’ Association has certain tools at their disposal which include liens for HOA Assessments and the ability to foreclose for unpaid assessments.

Under Florida law, when a property owner becomes delinquent on fees, a lien automatically becomes attached to the homeowner’s property as of the date the assessment became due. The lien often includes, late charges, penalties, interest, and the reasonable costs of collecting the debt.

The lien prevents the homeowner from selling or refinancing their property. The HOA then has 90-days in which to file a foreclosure action to enforce the lien. However, they must wait a mandatory period of 45-days, after the owner has been provided substantial notice of the association’s intent to foreclose, and collect any unpaid amounts. After 90-days if the HOA has not filed a lawsuit the lien becomes void.

The following are defenses a foreclosure attorney can use against an HOA to defend a home:

  • The HOA overstated charges or had incorrect accounting records
  • HOA failure to follow the assessment lien foreclosure status
  • Right of redemption
  • Unreasonable charges
  • Assessment is not authorized by governing documents
  • Misapplication of payments
  • Improper recording of assessment lien
  • The HOA is not authorized by its governing documents to foreclose

Of course, there are more than just those defenses, thus it is best to meet with a foreclosure attorney to evaluate your individual case and explore the legal options available. HOA laws vary widely from state to state and can be rather complicated, it is best to retain legal counsel.

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