HOA Foreclosure is becoming a more and more common experience for both HOAs and homeowners. HOA foreclosure occurs when a homeowner does not pay all that an HOA charges for the property. In this section, we will explain the common triggers for HOA foreclosures and the process both HOAs and homeowners can expect when an HOA foreclosure starts.

HOA Foreclosure Causes

There are two main causes of HOA foreclosures. Unpaid annual assessments are the most common cause of HOA foreclosures. HOA fines, less commonly, can lead to an HOA foreclosure. Both main causes of HOA foreclosures move forward through the court system in the same way.

HOA Annual Assessments

HOA assessments are the most common causes of an HOA foreclosure. HOAs assess their operating costs to their members through an annual budget. Typically, the annual budget is passed by the board of directors after notice to the homeowners in the community. Once the annual budget is passed, the association sends out the bills to the homeowners. Sometimes, the homeowners’ bills are sent out monthly. Sometimes the bills are sent out just once a year. Each homeowners association does this differently. When the bills are not paid, most HOAs send out a letter telling the owner the bill is late. But, this is not always done. If the HOA is not not, then the HOA foreclosure process begins.

HOA Fines

HOA fines are imposed by an HOA on a homeowner when the HOA believes a homeowner did not complied with the rules. Common causes of HOA fines are landscape issues, failing to maintain the exterior of the home, or parking rule violations. There is an extensive process required under Florida law governing how an HOA imposes fines. HOAs often get the fining process wrong.

Once an HOAs fine is imposed, it can be the basis of an HOA foreclosure process if it goes unpaid. HOA fines that become foreclosure cases are dangerous for HOAs to bring. They are often done wrong.

HOA Foreclosure Process

The HOA foreclosure process has two main stages. First, there is a pre-suit period that involves giving notice and warning to a homeowner. In this stage, the process requires letters and a lien following a form that comes from Florida law. After this, the case moves into a lawsuit. In the lawsuit suit, the process becomes even more formal. In nearly all HOAs, the attorneys fees and costs add to the amount owed by the homeowner.

HOA Foreclosure letter

Presuit Lien Letter

The presuit lien letter is the first required step in the HOA foreclosure process. This letter needs to be issued by a lawyer. Sometimes, an association prefers to give an extra step of warning by issuing a reminder letter prior to the presuit lien letter, but it is not a requirement. The presuit lien letter must be sent to the address on file with the association and the property address. Once the presuit lien letter is sent, the homeowner has 45 days to address the money owed or the HOA can put a lien on the property.

HOA foreclosure mail

Presuit Pre-forclosure Letter

The next step in the HOA foreclosure process is the issuance of a pre-forclosure letter. This letter is a “last chance” notice to the homeowner to pay the amounts demanded to avoid the filing of a lawsuit. Just as with the pre-lien letter, the pre-forelosure letter gives the homeowner 45 days to address the money owed.

HOA Foreclosure lawsuit papers

HOA Foreclosure Lawsuit

The next in step in the HOA foreclosure process is the dreaded lawsuit. A lawsuit is filed by the lawyer and then served on the homeowner. Service of the lawsuit is a formalized process in which the lawsuit papers are hand delivered to the homeowner. If the homeowner cannot be located, sometimes the service of the lawsuit is done by publishing a notice in a local newspaper.

Once the lawsuit is served, the case progresses quickly. A foreclosure case can often move from start to finish in under 120 days!

HOA Foreclosure Summary Judgment

Most HOA foreclosure cases resolve in summary judgment. Summary judgment is a legal tool that lawyers use to complete a case without a formal trial. Basically, summary judgment means that a case does not have any facts that matter to the case in dispute. Because of this, the judge handling the case will rule in favor of one party or the other.

HOA Foreclosure Property Sale

After summary judgment or a trial, the next step is the sale of the property “on the courthouse steps.” In the old days before the internet, the sale literally took place on the courthouse steps. Today, the sale takes place on the internet. If the homeowner does not act, they will lose the house. If there is a mortgage, the homeowner usually stills owes the bank money on the mortgage. Losing a house to foreclosure is a terrible outcome for a homeowner and there are many ways to avoid losing a house, but these usually require the help of an experienced lawyer.