HOA and condo association foreclosure in Delaware

HOA and condo collection rules in Delaware, step by step

• Which law covers your community

  Depends on when the community was created

  The Delaware Uniform Common Interest Ownership Act covers condos, cooperatives and planned communities created after September 30, 2009. Its lien and collection rules in section 81-316 also apply to older communities for events after that date, except small older planned communities and cooperatives (20 or fewer units, or very low average dues). Older condos are also under the Unit Property Act, which makes assessments a personal debt with interest of up to 18% a year.

  25 Del. C. §§ 81-116, 81-119, 81-120, 2233

• The lien is automatic and covers more than dues

  From the day an assessment is due

  The association has a lien for assessments and fines without recording anything new, because the recorded declaration perfects it. Unless your declaration says otherwise, late charges, fines, interest (up to 18% a year), court costs and reasonable attorney's fees can be collected the same way. You can ask in writing for a statement of what you owe; it must come within 10 business days and costs no more than $25 unless your account was sent to the association's lawyer.

  25 Del. C. § 81-316(a), (d), (h)

• Limits before a foreclosure case

  Before the case is filed

  The association cannot file to foreclose unless you owe at least 3 months of assessments under the current budget and the board expressly votes to foreclose on your specific home. If you owe only fines, it must first sue, win a judgment and record a judgment lien. Payments you make go first to assessments, then late charges, then legal fees and costs, then everything else.

  25 Del. C. § 81-316(m)

• How the association forecloses

  A court case, like a mortgage foreclosure

  For a condo or planned community, the lien is foreclosed in the same way as a mortgage, which in Delaware means a lawsuit in Superior Court and a sheriff's sale. The association must give reasonable notice to other lienholders and to everyone who would get notice in a mortgage foreclosure. The court can appoint a receiver to collect rent from a unit during the case. Delaware has no statutory payment plan right for HOA debts, so ask the board in writing for one.

  25 Del. C. § 81-316(j), (l)

• Up to 6 months ahead of your first mortgage

  At a sheriff's sale

  Up to 6 months of regular budget assessments can be paid ahead of a first or second mortgage. To get that priority, the association must have recorded a contact document and, at least 30 days before the sheriff's sale, a sworn statement of lien showing the amount due. Each recorded statement expires after 60 months.

  25 Del. C. § 81-316(b)

• No homestead shield, but a 3-year limit

  Within 3 years after the full amount is due

  The association's lien is not subject to the homestead or other exemptions. But the lien ends unless the association starts proceedings to enforce it within 3 years after the full amount becomes due. A bankruptcy filing pauses that clock until 30 days after the automatic stay is lifted.

  25 Del. C. § 81-316(b), (e)

• Free help from the Attorney General's ombudsperson

  Any time, before or during a dispute

  The Delaware Department of Justice has an Office of the Ombudsperson for the Common Interest Community. It explains rights under the law and your community's documents, takes complaints and can offer meetings or mediation. Call (302) 683-8836, or (800) 220-5424 outside New Castle County.

  29 Del. C. § 2544

Common questions in Delaware