As pointed out by a recent HBO episode of Last Week Tonight (viewer discretion), a homeowners association (HOA) has the potential to separate homeowners from their real property interests in certain situations, as outlined by the governing documents and local laws. This happens first, upon purchasing a home governed by an HOA, and second it can happen through various other harsh enforcement of rules and regulations, though imposition of fines, or the initiation of foreclosure proceedings. Below are a few of the second ways in which an HOA can affect a homeowner’s real property interests:
- Enforcement of CC&Rs and Rules:
HOAs enforce the Covenants, Conditions, and Restrictions (CC&Rs) and other rules outlined in the governing documents of the community. These rules and regulations may place restrictions on the use of a homeowner’s property, including limitations on home modifications (exterior and sometimes interior), landscaping, parking, and pet ownership. Failure to adhere to these rules can result in fines by the HOA. In some cases, continued non-compliance with the rules can lead to legal action, including the possibility of a lien being placed on the homeowner’s property and imposition of the HOA’s legal fees in prosecution of you.
- Fines and Assessments:
If a homeowner does not pay the required fees and assessments in time, or if they violate the community’s rules and regulations, the HOA may impose more fines. Unpaid fines can accumulate and, if left unresolved, may result in legal fees being added, and a lien being placed on the homeowner’s property. It has been reported this lien could ultimately lead to the homeowner being separated from their real property interests if the debt remains unpaid (foreclosure).
- Foreclosure Proceedings:
In some cases, an HOA may have the authority to initiate foreclosure proceedings against a homeowner who has failed to pay their dues, assessments, or fines. This might occur when the homeowner’s debt reaches a certain threshold and remains unpaid. The governing documents and local laws will dictate the specific foreclosure process and the rights of the homeowner.
The foreclosure process may result in the homeowner’s property being sold at auction to satisfy the outstanding debt. In this case, the homeowner would be separated from their real property interests, as they would lose ownership of the property.
- Restrictions on Sale or Transfer of Property:
In some communities, the HOA may have rules in place that restrict the sale or transfer of property within the community. These rules may require the potential buyer to be approved by the HOA or mandate that certain conditions be met before the sale or transfer can be completed. In such cases, the homeowner’s real property interests may be limited or constrained by the HOA’s requirements.
