- Who sends it
- Your HOA or condo association, its manager, or a collection agency or law firm it hired
- What it starts
- The deadline in the letter, then possibly a recorded lien, a lawsuit or, in some states, a foreclosure sale
- Do this first
- Ask in writing for an itemized ledger and a payment plan, and keep paying current dues
What these letters are
Homeowners and condo associations collect dues, often called assessments, to run the community. When you fall behind, the letters usually come in this order: a late or delinquency letter, a notice of intent to lien, a recorded lien (also called a claim of lien or notice of lien), and in some states a foreclosure notice.
The names change by state. Nevada uses a notice of delinquent assessment and then a notice of default and election to sell. In the District of Columbia, a condo association sends a Notice of Foreclosure Sale of Condominium Unit for Assessments Due.
What it does and does not mean
- It is not a mortgage foreclosure, but it can still cost you your home. Nevada requires the notice of default to warn, in bold type: "IF YOU FAIL TO PAY THE AMOUNT SPECIFIED IN THIS NOTICE, YOU COULD LOSE YOUR HOME, EVEN IF THE AMOUNT IS IN DISPUTE!"
- In some states, part of the HOA's lien can come ahead of your mortgage. Nevada, Washington and D.C. all give a limited amount of unpaid dues this priority.
- Your mortgage is a separate debt. Keep paying it. Federal rules generally bar your mortgage servicer from starting foreclosure until you are more than 120 days behind, but one exception lets the servicer join a foreclosure that another lienholder started.
- Federal debt collection law can apply. The Fair Debt Collection Practices Act covers debts for personal, family or household purposes, and debt collectors include collection agencies and lawyers. The CFPB says the law generally does not cover the original creditor collecting its own debt, so an HOA collecting in its own name may not be covered, while a collection agency or law firm it hires may be.
- If a covered debt collector contacts you, it must give you written information about the debt. If you dispute it in writing within 30 days of getting that notice, the collector must stop collecting the disputed part until it mails you verification.
State examples
State law decides whether an association can foreclose and how. These are examples from statutes we read. Your state may be different, so check your state's page and your community's documents.
- Nevada: before an intent to lien letter or any other collection step, and no sooner than 60 days after a payment is past due, the association must send a fee schedule, a proposed repayment plan and notice of your right to a hearing before the board, then give you 30 days to pay, agree to the plan or ask for the hearing. To foreclose, it must mail a notice of delinquent assessment, record a notice of default at least 30 days later, then wait 90 days. It generally cannot foreclose over fines, only over assessments, with narrow exceptions. Up to 9 months of budget assessments can come ahead of your first mortgage, and the law caps some collection charges, such as $165 for an intent to lien letter. After an HOA foreclosure sale, you can redeem within 60 days.
- Washington: for communities under the Washington Uniform Common Interest Ownership Act, up to 6 months of budget assessments can come ahead of your first mortgage. You can ask the association in writing for a statement of what you owe, and it must answer within 15 days. The association can foreclose through a court, or without one if the declaration allows it. Board members and their families cannot bid at the sale.
- Washington, D.C.: a condo association has a power of sale. Up to 6 months of budget assessments can come ahead of the first mortgage. You can stop the sale by paying the past due amount, late charges, interest and reasonable legal costs any time before the sale. The sale cannot happen until at least 31 days after the notice is recorded and sent to you, and the notice must break down the amount and say how to get a full account statement. You can also ask in writing for a statement of unpaid assessments, which must come within 10 days.
What to do this week
- Ask the association, in writing, for an itemized ledger showing every charge, late fee, interest charge, legal fee and payment. Keep a copy of your request.
- Find your community's governing documents: the declaration (or CC&Rs), bylaws and collection policy. They say what fees and interest the association can charge and how it collects.
- If something is wrong, dispute it in writing. If a collection agency or law firm sent the letter, dispute within 30 days of its first written notice about the debt.
- Ask for a payment plan in writing. Some states, like Nevada, require the association to offer one.
- Keep paying your current dues if you can, so the balance does not grow.
- Ask about a hearing before the board if your state or documents give you one, and go to it.
- Call a free HUD-approved housing counselor at (800) 569-4287. If you got a lien, lawsuit or foreclosure notice, call legal aid or a lawyer now. See lawyers by city.
Scams tied to HOA debts
Liens and HOA foreclosure notices are public. Watch for:
- Anyone who asks for a fee before you have signed an agreement with your servicer. A company that is not your lawyer cannot charge for mortgage relief until then.
- Anyone who tells you to stop talking to your servicer, your housing counselor or your lawyer.
- Anyone who wants payment by wire, cashier's check or a payment app, or who asks you to sign over your deed.
- Anyone who says they are with the government or your lender without proof. Call the number on your own statement or letter to check.
- Anyone who offers to pay off your HOA lien if you sign over your home or a share of it.
- A letter that says a new company now collects your dues and gives new payment instructions. Check with your association's manager at a number you already have before you pay.
See foreclosure rescue scams. Report debt collection problems to the CFPB and scams at ReportFraud.ftc.gov.
How much time do you have? It depends on your state.
See the foreclosure timeline, deadlines and free local help for the state where the home is.
Common questions
Can my HOA foreclose even if my mortgage is paid up?
In some states, yes. Nevada, Washington and the District of Columbia all let an association enforce its lien by a foreclosure sale. Each has its own steps and limits, such as Nevada's required repayment plan offer and 90-day wait. Check your state's law and get legal help quickly.
Can the association foreclose over fines?
It depends on the state. Nevada generally allows it only for unpaid assessments, not fines, with narrow exceptions. Ask for a ledger that separates assessments from fines.
Does the Fair Debt Collection Practices Act protect me?
It can, when a collection agency or law firm collects your HOA debt. The CFPB says the law generally does not cover the original creditor collecting its own debt. If a covered collector contacts you, you can dispute the debt in writing within 30 days of its notice.
Can I get my home back after an HOA foreclosure sale?
In some states. Nevada gives 60 days to redeem after an HOA sale. Other states have their own rules. See certificate of sale and your state's after the sale page.
Keep reading
- Late notice and early intervention letterThis letter is a warning, not a foreclosure. Federal rules make your servicer reach out early and tell you about help. In most cases a foreclosure cannot start until you are more than 120 days behind, so this is the best time to act.
- Breach letter (demand or notice of intent to accelerate)A breach letter says you are in default and gives you a date to catch up. If you do not, the lender can call the whole loan due and move toward foreclosure. Many standard mortgages and deeds of trust require at least 30 days to cure.
- Notice of defaultIn many states that foreclose without a court, a recorded notice of default is the official start of the foreclosure. It is not a sale and not an eviction. It starts a waiting period before a sale can be set, and you can usually still catch up or apply for help.
- Notice of intent to forecloseMany states make the lender send a warning letter before it can start a foreclosure. These letters often give you a set number of days, a cure amount and a list of free counselors. The deadline in the letter matters, so act on it now.
- Lis pendens (notice of pendency)A lis pendens is a public notice, filed in the land records, that a lawsuit or foreclosure affecting your home is pending. It does not mean the home is sold or that you must move. It usually means the court papers are coming or have already been served.
- Foreclosure summons and complaintA summons and complaint means the lender has sued to foreclose. You have a short, firm deadline to respond in writing, often 20 to 30 days from the day you were served. Missing it can let the lender win without your side being heard.
Sources
- NRS chapter 116, including NRS 116.3116, 116.31162 and 116.31166 (Nevada Legislature)
- RCW 64.90.485, association liens (Washington Legislature)
- D.C. Code § 42-1903.13, condominium assessment liens (Council of the District of Columbia)
- 15 U.S.C. § 1692a, FDCPA definitions of debt and debt collector (govinfo)
- 15 U.S.C. § 1692g, validation of debts (govinfo)
- CFPB: What laws limit what debt collectors can say or do?
- 12 C.F.R. § 1024.41, loss mitigation procedures (eCFR)
- HUD: Avoiding foreclosure
- CFPB: Find a housing counselor
- CFPB: Submit a complaint
- FTC: Mortgage relief scams
- FTC: ReportFraud.ftc.gov