Foreclosure for Delinquent HOA Dues and Assessments
Question: In our homeowners’ association in North Phoenix there are several “deadbeat” homeowners who have not paid their monthly dues for several months, and who also have not paid the special assessment for our new roads. We have written numerous letters to these homeowners, but these homeowners are still delinquent. The result is that the other homeowners have to pay more than their share to make up for these delinquent homeowners. I know that these delinquent homeowners will probably have to pay the delinquent payments when they sell their homes, but is there anything else that we can do now to collect the delinquent payments? Can we initiate foreclosure for delinquent HOA fees and Assessments?
Answer: Monthly dues and special assessments can become liens against a home. Thus, if a homeowner is delinquent in paying these monthly dues and assessments, the homeowners’ association can eventually foreclose on the home. The homeowners’ association will need to pay an attorney to file and serve on each of the delinquent homeowners a foreclosure lawsuit. If a delinquent homeowner still does not pay the monthly dues and assessments, plus attorneys’ fees and other costs of the foreclosure, any successful bidder at the sheriff’s sale conducted on the courthouse steps will become the owner of the home. The successful bidder will have to pay the homeowners’ association all of the delinquent payments, plus attorneys’ fees and other costs. If there are no bidders at the sheriff’s sale, the homeowners’ association will become the owner of the home.
Note: When served with a foreclosure lawsuit, most homeowners pay the delinquent payments, plus attorneys’ fees and other costs. On the other hand, a $250,000 home owned by an inattentive out-of-state owner was lost to foreclosure at a sheriff’s sale for failure to pay delinquent monthly dues of originally less than $700.