HOA and condo association foreclosure in Indiana

HOA and condo collection rules in Indiana, step by step

• Which law covers your community

  Check your recorded declaration

  Condominiums are governed by the Horizontal Property Law, Ind. Code article 32-25. Subdivision homeowners associations are covered by the lien chapter, Ind. Code chapter 32-28-14, and by the Homeowners Association Act, Ind. Code article 32-25.5. That Act fully applies to associations formed after June 30, 2009 and to older ones whose members voted to join it, but some sections, including the account statement and fine rules below, apply to every HOA.

  Ind. Code §§ 32-25.5-1-1, 32-28-14-2

• Condo lien starts when dues are assessed

  As soon as an assessment goes unpaid

  Unpaid condo assessments are a lien on your unit from the time they are assessed. The lien comes ahead of other liens except property tax liens and the first mortgage of record. The association can also sue you for a money judgment without foreclosing.

  Ind. Code § 32-25-6-3(a), (d)

• HOA lien starts only when it is recorded

  On the date the notice of lien is recorded

  A subdivision HOA lien attaches only when the association records a notice of lien in the county recorder's office, and it does not reach back to when the dues were assessed. The notice must give the association's name and address, the property address and legal description, your name and the amount, and must be signed by an officer and acknowledged. Its priority dates from the recording.

  Ind. Code §§ 32-28-14-5, 32-28-14-6

• Foreclosure only through the courts

  HOA: no sooner than 90 days and no later than 5 years after recording

  An HOA must file a complaint in the circuit or superior court of your county, and generally cannot file until 90 days after the lien was recorded. If it does not sue within 5 years, the lien is void, and if the court rules for the HOA, it orders the home sold. A condo association forecloses by lawsuit too, and if the bylaws say so you may have to pay reasonable rent during the case.

  Ind. Code §§ 32-28-14-8, 32-25-6-3(b)

• You can force the HOA to act or drop the lien

  1 year after the HOA receives your written notice

  You, or anyone with an interest in the home such as your lender, can send the lienholder written notice to file a foreclosure action. If it does not file within 1 year after receiving the notice, the lien is void, though the HOA can still try to collect the debt in other ways. After sending the notice by registered or certified mail and waiting the year, you can record an affidavit to release the lien.

  Ind. Code § 32-28-14-9

• Fines, optional fees and your free account statement

  Before any fine is charged

  An HOA can fine you for a covenant violation only after its board adopts a written schedule of fines with a maximum for any one violation and gives you notice of the violation, amount and date. Unpaid fees for optional services you chose are not a lien on your home. The HOA cannot charge you for a statement of what you owe and must give you one when you ask.

  Ind. Code §§ 32-25.5-3-12, 32-25.5-3-3(n), (o)

• If the first mortgage forecloses first

  After a first mortgage foreclosure sale

  The lender or buyer who takes title through a first mortgage foreclosure does not owe the dues that came due before it took title. Those unpaid dues are spread across all owners as a common expense. That rule is the same for condos and HOAs.

  Ind. Code §§ 32-25-6-3(e), 32-28-14-7(c)

Common questions in Indiana