Forced Foreclosure

SherriH1 (Georgia)
Posts: 1

Posted:

I am on the BOD in my subdivision in Georgia. We joined the POA a year ago. My President says that now we can force a foreclosure on homeowners that owe back dues. (We are targeting the ones that owes over $2,000, and yes we send collection letters and liens have been filed.) I have searched the web and cannot find this rule. Was my President wrong?

Thanks,
Sherri

JC3
Posts: 290

Posted:

That depends on your state law--search your statutes. HOWEVER, there are OTHER ways to collect that money. What all have you done? What steps have you taken to collect? You've sent collection letters. Why have you not collected?

Be sure to let those foreclosed on that they can probably buy the place back within a certain timeframe.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Sherri,
Try Google: Enter: Foreclosure by HOA Board.

Lots of good stuff there.

NancyD1 (Florida)
Posts: 447

Posted:

Your documents will state how and when the HOA can foreclose on a property. Check your state laws also. Some states specify that a HOA can only foreclose when there is a certain amount of money owed not less. Also, check the county records for any other liens on the home. If there are IRS or state property tax liens it may not be worth it to fill for a foreclosure.
The foreclosure will cost the HOA and you may not be able to recoup these fees if the state law does not allow it. These liens come before any HOA dues. Some states do allow a foreclosure and whomever buys the home has to pay the HOA lien off before there is a clean title.

The first action is normally a late letter, then so many days later a lien is filed. At this point it should be handled by an attorney. He should send a letter saying a lien is filed and the homeowner has so many days to have the lien released. Whatever the costs for the attorney they should be included with the action by the attorney and will be the homeowners responsibility. If payment or payment arrangements are not made the attorney will file a foreclosure in court. If granted, a date will be set for the sale.

If it gets to this point, and the homeowners have a mortgage that they are not late on, the bank will normally try to work a pre=foreclosure deal, with either the homeowner or the HOA. If not and a sale goes through, the home is auctioned. Most likely the bank will by the home if there is a mortgage. They will not let a home with a $200,000 mortgage go for $3,000 in HOA fees. The only way a homeowner can buy back thier home after a foreclosure is, if there were no mortgage on the property and it was a county or city tax sale. It's unlikely any mortgage holder will allow a homeowner to buy back the home.