Love them or hate them, homeowners associations (HOAs) are a fact of life for a lot of New Yorkers – and they do have some value when it comes to helping preserve a community’s way of life and maintaining property values.
They can also become a nightmare for homeowners who fall behind on their HOA dues – since an HOA can and will move to foreclose on their property.
How does an HOA gain the power to foreclose?
Essentially, HOAs collect dues and level special assessment to fund community maintenance, amenities, operating expenses and other costs laid out in the Covenants, Conditions & Restrictions (CC&Rs) that are part of a homeowner’s purchase contract.
When homeowners fail to pay up, the HOA will generally take action. What starts with the imposition of late fees and interest on overdue payments can quickly add up, and the HOA may eventually – like any other creditor – file a lien on the home. If the lien isn’t quickly resolved, the HOA can initiate foreclosure proceedings.
What can you do if you’re behind on your HOA dues? What if you disagree with an assessment?
- Communicate with your HOA directly: As soon as you know that you are experiencing an issue, contact your HOA and see if they’re willing to either work out a payment plan or offer a temporary “hold” on an assessment until the issue is sorted out.
- Ask for an explanation: If the issue is an assessment that you think is unfair, ask for a detailed explanation of how the funds will be used. That may resolve any misunderstandings – and it will definitely provide information that you may be able to use to support your position.
- Submit a formal dispute: If you believe the assessment is not warranted or there is some other dispute over your dues, follow the procedures outlined in your HOA’s governing documents to file a dispute.
Finally, you may want to consider legal guidance earlier, rather than later. Regardless of the issue, knowing more about your options can help you decide what steps to take next – and it is the best way to protect your investment.