What Is an HOA Foreclosure?

What Is an HOA Foreclosure?

Living in an HOA is a preferred lifestyle for 634,000 Utah residents who occupy the state's 3,500 HOAs. These residents enjoy several advantages as a result of these choices, including higher property values.

One of the main drawcards for HOA residents is having access to desirable amenities in their community without maintaining these facilities themselves. In return, homeowners must pay HOA fees and abide by a set of strict HOA rules.

If they disregard either of these aspects, they can face severe consequences like fines, an HOA lien, and ultimately an HOA foreclosure.

Read on to find out more about this topic.

HOA Fees, Assessments, and Fines

HOA amenities usually comprise things like swimming pools, gyms, community centers, common areas, and even golf courses. It takes time and money to maintain these facilities.

While homeowners don't need to do the work required to keep these facilities in good shape, they do split the costs. The HOA board sets a budget for maintaining the facilities each year and divides this among all the residents.

The result is an annual or monthly HOA fee that all homeowners must pay as a condition of their homeownership in the community. When you buy a home in an HOA, you must investigate these costs before you commit.

From time to time, the HOA board might need to perform extensive repairs or replacements within the community. In these cases, they charge the homeowners a mandatory special assessment.

In addition, the HOA is run according to a set of governing documents called the CC&Rs. These rules ensure that each resident benefits equally from the onsite amenities.

The HOA may levy fines against homeowners who break these rules.

What Happens If You Don't Pay Your HOA Fees?

If you don't pay your HOA fees and fines, the HOA will resort to all the usual means of fee collection, like:

  • Limiting the homeowner's use of the amenities
  • Calling them to remind them about past-due payments
  • Sending letters requesting payment

When homeowners ignore these requests, the HOA can place a lien against their property. If this doesn't have the desired effect, the HOA can foreclose on the homeowner's property.

The HOA Foreclosure Process

An HOA homeowner may face HOA foreclosure even if their mortgage payments are up-to-date. In Utah, HOA foreclosures are usually non-judicial, unless the homeowner demands a judicial foreclosure.

During a non-judicial foreclosure, the procedure is as follows:

  • The HOA notifies the homeowner of their intention to foreclose
  • The HOA records a Notice of Default at the County Recorder's office
  • The property is sold via public auction

The only way to stop foreclosure is to settle all past-due amounts in one payment.

Avoid the Complications of an HOA Foreclosure

An HOA foreclosure is an unpleasant and disruptive situation for everyone involved. An HOA management company can help you avoid this with their range of services.

PMI Reliant can assist your HOA board with efficient fee collections and proven rule enforcement methods to help your HOA homeowners stay up-to-date with their payments and avoid HOA fines. We are backed by over 20 years of experience, and our team is dedicated to helping you create a harmonious HOA community.

We can help you avoid unpleasant foreclosures and maintain your community's harmony.