When someone falls severely behind in their homeowners' association fees or assessments, then the association can place a lien on that person's property. This lien could result in a judicial or non-judicial foreclosure, even if a homeowner has kept up all their mortgage payments. Read on to learn more about how these situations could develop, and how you could defend yourself from an HOA foreclosure.

A homeowner's association (HOA) is present in a covenanted community, and it can require fees on a monthly basis from members in order fund landscaping, maintenance, etc. in the community. An HOA can also exact special assessments, one-time payments, such as when a big construction project crops up. Most HOAs are able to get a lien on a property if the owner fails to pay monthly dues or special assessments. This means the homeowner could be on the hook not only for these fees, but also for late charges and interest, and other costs, such as legal fees. With this lien in place, a homeowner cannot sell the property or refinance. If the lien is not dealt with, the homeowner could also face foreclosure.

According to an HOA's terms, the association can proceed with a judicial or non-judicial foreclosure on that lien. In a judicial HOA foreclosure, the association will seek to pay off the lien by selling the property, and it has to get a court to allow it to do so. To accomplish this, the association sues the homeowner. In a non-judicial foreclosure, no court process is necessary. The HOA simply has to follow the directions outlined in its own laws and to abide by the state's laws as well.

Of course, this whole process cannot be triggered the moment a homeowner misses a payment. State laws set boundaries for HOA foreclosures. A Californian homeowner, for instance, has to go $1,800 in debt or more, and for at least a full year, until a homeowner's association can foreclose on the property.

So what can a homeowner do if they find themselves facing an HOA foreclosure? You could have several options. One of the first things you can do is go back over the numbers. Unfortunately, an HOA might start foreclosure because they did their math wrong. Maybe they left out one of your payments, or overcharged you for something. Perhaps an HOA is asking unreasonable fees of you. If a judge sees that you owe the HOA $500, but the other costs being charged you for the foreclosure are listed at $10,000, then a judge could see this for the insanity it is.

Also, if debt is due to a fee that the HOA could not legally ask for, according to its own CC&R rulebook (the Declaration of Covenants, Conditions, and Restrictions), then the lien or foreclosure could be eliminated. In fact, there are some CC&Rs that prohibit the HOA from foreclosing on a property. In that instance, the foreclosure would have to be eliminated.

The next thing to check would be your state's laws. If your HOA breaks one of these laws, the foreclosure could be cancelled. In the above example, if a homeowner in California was only $1,000 behind, or if they had $2,000 of debt for only six months, but the HOA started the foreclosure process anyway, the homeowner could point out that state law was broken. This could defend against a foreclosure in spite of the fact that the homeowner is indeed in debt. There are even states where a possible defense is that the HOA did not record the lien as it should have according to state law. In fact, in these states, if an HOA incorrectly records the lien, then the homeowner could take the HOA to court.

The good news is, there could be many other HOA foreclosure defenses available in your case. Do not wait to learn what these defenses are. Contact a local real estate attorney today!