Before I get into all the details, let me backtrack a moment to give some background information on HOA dues. If you’re looking to buy or if you own a home with no HOA dues, you most likely are responsible for mowing your lawn, shoveling your driveway and general upkeep. If you live in an establishment such as a condo that has monthly HOA dues, the association is most likely responsible for the general upkeep. That’s where the HOA dues come into play. As with most things in life, there’s a price to pay. Each association has different policies. Some HOA dues even include city services such as trash removal, while insurance could also be part of the equation.
So, back to the original question. What happens if you don’t pay your HOA dues? First off, I’d recommend not taking this route. However, I get that there are certain extenuating circumstances that give people little to no options. While different states have different laws, there are some fundamental steps that will most likely take place.
For starters, HOA boards don’t typically wait around. If you miss a payment, you can expect to receive a letter stating that you have an outstanding debt. There may even be details about the next steps the board will take to recoup the dues. As with other missed payments, you can also expect to be charged a late fee plus interest.
That’s only the beginning, though. Your rights as a homeowner can be suspended in the community. If your association has common areas such as a pool or clubhouse, your right to use such areas could be revoked, along with your right to vote on HOA matters.
If you have a vacation property that you rent out, you can expect to have the money you thought you’d be getting for rent go directly to your unpaid dues. However, once you’re caught up on your HOA dues, you’ll start receiving your money again.
The above consequences are serious, yes. As you’ll find out, though, it can get a whole lot worse. For example, the association can file a lien on your property. If you sell the property, the lien and any other fees will be deducted before you get your money.
As I mentioned earlier, different states have different laws. In some states, you can be evicted from your property, although this only occurs in drastic situations. In this case, the association would rent out your unit or home until you are all caught up on your payments. In rare instances, your property can also be foreclosed on. Associations typically try to avoid this route, as the responsibility for all taxes and utilities falls to the HOA.
To avoid any consequences, there are steps you can take. The first thing you can do is keep an open line of communication between you and the association. If you know you’re going to be late or miss a payment, let your board know ASAP. Some boards will work with you to come up with some sort of payment plan.
Now, we want to hear from you. Do you have any other tips when it comes to dealing with HOA dues? Let us know in the comments below! If you’re in a market for a home with or without HOA dues, talk to a Home Loan Expert today!
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