Homeowners have been falling behind on their HOA and Condo dues with more frequency lately. When money is tight and you are juggling bills the HOA or Condo dues can be tempting bill to let slide, partly because they don't report to credit agencies. Some have the misperception that the only consequence will be a late fee. It's a trap many fall into. Letting your HOA dues pile up can be very expensive and even cause you to lose your home in foreclosure. This can happen whether you own your home free and clear or have a mortgage.
Florida is a "Super Lien" state. One of 18 states where Condo and HOA liens have superiority to any other liens. This gives them the ability to foreclose in order to collect back payments.
How long does it take for the HOA to foreclose?
First you have to fall behind at least $2500. Then the HOA or Condo will have their attorney subject your property to a lien which will include not just missing payments, but
- Late fees
- Interest up to 18% per month unless the HOA by-laws have a lower amount.
- Attorney and court fees. These can be substantial.
In Florida the first step is a lien. Then a Lis Pendens notice is served. Both of these become public record. A lien will certainly have a negative affect on your credit. After the Lis Pendens notice is served a hearing is set where a Judge will determine the Final Judgement amount approving court and attorney fees. Then a foreclosure auction date is set at least 45 days later. From the time a lien is levied to the auction can be 3 to 4 months.
At the auction anyone can bid on the property. The high bid wins. The HOA will only bid as much as they are owed. If there is excess equity and investor will likely win the auction. Then they are the new owner and can force an eviction. I have seen Condo Associations win the auction. Force the owners out and rent the unit out while they wait for the mortgage holder to foreclose on them. It can get wacky. Don't let this happen to you.
How to prevent a HOA foreclosure
Before you end up with a lien on your property try to work out a payment plan with your association. Most of them will work with you to get you up to date. You can also pay off the lien anytime up to the foreclosure auction. Always consult an attorney. If your financial situation is temporary they can likely get the foreclosure auction delayed. Lastly it may be best to sell your home before your credit is further damaged and it doesn't look like you will be able to continue to make the payments. I see too many homeowners go through a constant cycle of having liens levied, then getting it all paid off, only to fall behind again and suffer the same huge expenses needlessly.
I have been helping South Florida homeowners in distress since 2007. If you need help avoiding foreclosure contact me for a confidential consultation.
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Serving The Greater Fort Lauderdale area since 2006
You can reach me 954-895-2431
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