If you own property in a neighborhood with an HOA/COA, you’ve probably budgeted to pay your membership fees. Some people find the fees frustrating, while others are grateful for the benefits they get in return. Either way, you have to make that payment. But sometimes, life throws budgets into disarray. In the unfortunate case that you fall behind on bills, you might push the HOA fees down your list of priorities. However, your homeowner’s association has the right to collect unpaid fees. If you’re wondering what might happen in the event that you cannot pay your HOA fees, read on.
What Can the HOA Do?
If it happens that you are unable to pay your homeowner’s association fees the HOA does have the right to try to collect this debt. However, they must follow the FDCPA or Fair Debt Collection Practices Act. What this means is that the HOA is not allowed to collect the debt in an unfair, abusive, or deceptive way. At first, the HOA or COA will probably give you notifications via mail or email to remind you that your dues are owed. Next, the association will likely pursue more aggressive measures to retrieve the funds.
Take Away Your Privileges
One of the many benefits individuals find with an HOA are the amenities. Often these include things like community centers, swimming pools, gyms, and landscaping. In the event that a person neglects to pay dues, the HOA may bar them from these privileges they pay the outstanding balance.
Place You in Collections
If the issue of non-payment persists then the HOA could place you in collections. Debt collectors may dog you with persistent phone calls, mail, and emails. This also has the potential to affect your credit score.
File a Lawsuit
In the case of a large debt, the HOA may file a lawsuit. Sometimes this can be solved by making a settlement. However, if the HOA is not willing to settle the issue may go to court.
File a Lien on Your House
Typically homeowners won’t feel the burden of a lien until they are ready to sell or refinance the home. When a homeowner tries to sell or refinance the home, some of the money will go towards the debt. Filing liens is not ideal for most industries because it takes a lot of time to receive that money. Sometimes, they don’t see the money at all.
Garnish Your Wages
Another tactic an HOA may use if you can’t pay your HOA fees is garnishing your wages. The IRS can take money directly from your paycheck and send it to the entity you owe.
Foreclose on Your Home
If the problem continues the HOA could foreclose on your home. As All Law explains, “the HOA lien has priority over all liens and encumbrances recorded after the recordation of the declaration of CC&Rs except a first mortgage or deed of trust that was recorded before the date the assessment became delinquent.” As a result, the bank can evict the homeowner.
What If You Rent the Property?
Even if you no longer live on the premises and you lease the home to renters you are still required to pay your HOA fees. If the property owner does not pay, the HOA does have the right to try collecting from the tenant. NOLO states that some homeowners associations require the tenant to sign a document stating that they are responsible for paying the HOA fees if the landlord doesn’t.
What if the HOA isn’t Doing Their Job
Your homeowners association has standards that they are required to uphold. If they are not doing their part it is not advisable to quit paying your fees. If you feel like that are not doing their job and they do not deserve the money it may be better to put their money into an escrow account. Otherwise, there are other actions you can against your HOA. Should you find yourself in a legal dispute over unpaid HOA fees please contact the office of Rapier & Bowling. We will be happy to discuss how we might be able to assist you. PHOTO: CC0 Public Domain