Homeowner's associations can be a pain in the behind, but can they really take your home if you don't abide by their rules? We've all heard of HOA horror stories. Sometimes you pay your HOA fees and they do absolutely nothing to make the neighborhood better or enforce basic rules to keep the neighborhood beautiful and property values up. On the other hand, there are those overzealous associations. I just read one about a person who bought a home and the previous owner had beef with HOA. They seized the parking spaces and were making life hell for the residents. Unfortunately, the new owner inherited the headache.
Let's quickly dive into what a HOA and Condominium Owner's Associations are:
When you buy a single-family home, townhome, or condominium that's part of a planned community with covenants, you'll most likely pay fees and assessments, often collectively called "assessments," to a homeowners' association (HOA) or condominium owners' association (COA).
So, what happens if you fall behind on your HOA or COA fees? There are a few steps before we get to the question of the HOA being able to take your home.
First, according to Nolo.com, the association may send you an email or letter reminding you that your fees are due. The next step is more extreme. The HOA may restrict your use of common areas like the pool, clubhouse, or other shared amenities. They could also file a lawsuit to get payment. Now to the worst-case scenario...
In New York State, an HOA can get a lien on your home. Yes, they can technically, legally take your home. It's not a 100% guarantee, because you may have an attorney and a legit defense. However, you'll be fighting a battle in court. According to Nolo.com,
The COA or HOA can usually get a lien on your home if you become delinquent in paying the assessments. After you default on the assessments, the COA or HOA may foreclose. Lien priority determines what happens to other liens, like mortgages and judgment liens if a COA or HOA lien is foreclosed.
Charges the HOAs and COAs can include in the lien include,
- Late Fees
- Court Costs
- Attorney Fees
The bottom line is, even in New York, a state that offers lots of legal protections to residents, you are basically at the mercy of the HOA or COA. Unless you have a great attorney and a solid reason for not paying your assessments, you may be risking your home!