Homeowners Associations are created to enforce the rules and regulations of a community and to maintain any common areas. By doing so, they protect the property values of individual homes. To achieve their purpose, HOA’s collect money from the homeowners to cover the various expenses associated with their day-to-day operations or emergencies which may arise. But what can happen if a homeowner fails to pay these fees?
Arizona law provides that, when a homeowner becomes delinquent in paying HOA dues or assessments, an assessment lien is automatically created. The lien benefits the HOA, giving it a legal claim against the property in much the same way as a mortgage. The HOA can then record the lien, giving public notice of their claim. This will have the effect of clouding the property’s title, making it difficult to sell until the debt has been satisfied.
HOA’s are not limited to delinquent dues when it comes to assessment liens. Late payment charges may be added, as well as collection fees, attorney fees and other associated costs incurred as a result of the delinquency. The HOA must give notice to the homeowner at least 30 days prior to beginning collection proceedings on the lien.
Can the HOA foreclose on the home?
Since the assessment lien operates similarly to a mortgage, homeowners associations also have the ability to foreclose the property under certain conditions. If the owner has been delinquent for at least one year, or if the total delinquency is $12,000 or greater, the HOA may legally initiate foreclosure proceedings. However, failure to follow the statutory requirements for an assessment lien, improper accounting and improper recording of the lien may create defenses for the homeowner.