Behind on HOA Dues in Texas: Can the HOA Foreclose?

Falling behind on homeowners association dues feels minor next to a missed mortgage payment, right up until a letter from the association's attorney mentions foreclosure. In Texas that threat is real, but it comes wrapped in far more procedure than most owners realize. Chapter 209 of the Texas Property Code spells out what an association has to do first, and most of those steps take months rather than weeks.

Can a Texas HOA really foreclose for unpaid dues?

Yes, if the association's recorded declaration gives it a lien and a right to foreclose. Texas homestead protection, strong as it is, does not stop it. The Texas Supreme Court held in 1987 that a valid assessment lien created before a property became the owner's homestead can be foreclosed, and because a subdivision's declaration is usually recorded before any house in it is sold, that reasoning reaches most subdivision homes.

Chapter 209 applies to residential subdivisions where membership in the association is mandatory and the declaration authorizes assessments. It does not apply to condominiums, which are governed by a different chapter with different foreclosure rules, so condo owners should not rely on what follows. Owners can vote to remove foreclosure authority from the governing documents, but it takes 67 percent of the total votes.

What has to happen before the HOA files a lien?

Two written delinquency notices, and then a wait. The first notice can go by regular mail, or by email to an address you gave the association. The second must go by certified mail, return receipt requested, no earlier than 30 days after the first. The association then cannot file the lien in the county records before the 90th day after that second notice was sent.

Those dates matter because a recorded assessment lien is, by statute, an instrument affecting title. Once it is filed it shows up in any title search, and it has to be dealt with before the house can be sold or refinanced. When you count days on a notice, count from the dates the statute uses, not from the day you finally opened the envelope.

Are you entitled to a payment plan?

In most cases, yes. An association with more than 14 lots must adopt guidelines for an alternative payment schedule that lets you pay delinquent amounts in installments without accruing additional monetary penalties, although reasonable costs of administering the plan and interest can still be charged. The minimum term is three months, and the association does not have to stretch a plan past 18 months from your request.

There are limits worth knowing. The association can refuse a plan to an owner who defaulted on a previous plan within the past two years, and it does not have to offer more than one plan in any 12-month period. It also does not have to offer one after the cure period in the collection notice described below has expired, which is the deadline people most often miss.

What happens before the account goes to collections?

You get a certified letter and at least 45 days to cure. Before an association can make you liable for a collection agent's fees, it must send written notice by certified mail listing each delinquent amount and the total needed to bring the account current, describe any payment plan available to you, and give you at least 45 days to pay before further collection action is taken.

Payments are also applied in a fixed order: delinquent assessments first, then current assessments, then attorney's fees and collection costs tied to assessments, then other attorney's fees, then fines, then anything else. That order keeps a payment from being swallowed by fines while the assessment balance, the part that can support foreclosure, keeps growing. It stops applying if you are in default on a payment plan.

Which debts can an HOA not foreclose on?

Fines on their own. An association may not foreclose its assessment lien if the debt consists solely of fines, attorney's fees connected only to those fines, or certain records and vote recount charges added to an account. An owner who has piled up fines over an unmowed lawn but is current on assessments cannot lose the house to foreclosure over that balance.

That does not make fines harmless. They remain a debt owed to the association, and they will appear on the resale certificate when you sell. But when an association's letter threatens foreclosure, the first question to ask is how much of the stated balance is actually unpaid assessments, because that is the only part that can carry the threat.

Does the HOA need a court to foreclose?

Yes. Unlike a mortgage lender, a Texas association cannot simply post a notice and sell. It must either obtain a court order through an expedited foreclosure proceeding under rules adopted by the Texas Supreme Court, or file an ordinary lawsuit and obtain a judgment ordering the sale. The exception is an owner who agrees in writing, at the time foreclosure is sought, to waive the expedited process.

Before filing either, the association must send written notice of the delinquency by certified mail to any lender holding a deed of trust recorded behind its lien, and give that lender 61 days to cure. In practice that means your mortgage lender may hear about the HOA problem whether or not you have told it, and it has the option to pay the delinquency to protect its own position.

Can you get the house back after an HOA foreclosure sale?

Yes, for a limited time. After an association foreclosure, it must send the owner and each lienholder of record written notice of the sale within 30 days, by certified mail. The owner then has a right of redemption that runs until the 180th day after that notice is mailed. A mortgage lienholder can also redeem, but not before 90 days have passed and only if the owner has not already done so.

Redeeming is not cheap. The owner pays everything owed to the association at the time of the sale, interest at the declaration's rate or 10 percent a year if none is stated, the association's foreclosure costs and attorney's fees, later assessments, and the price paid at the sale, among other items. Until the period runs, the buyer at the sale cannot transfer the house to anyone but a redeeming owner.

Can you sell a house with an HOA lien on it?

Yes, and it is often the cleanest way out. The lien is normally paid from your proceeds at closing like any other lien, because the title company will want it paid or released before it insures the buyer. What everyone relies on is the resale certificate, which the association must deliver within 10 business days of a proper written request from the owner, the buyer or the title company.

The certificate has to state the regular assessment amount and frequency, any approved special assessments still coming due, the total of all unpaid amounts attributable to your lot, any conditions the board knows to violate the restrictions, every fee tied to the transfer, and whether the restrictions allow foreclosure of the association's lien. The balance it shows is the number everyone will expect cleared, so order it early and dispute any error before a buyer is waiting on it.

What should you do first if you are behind?

Get the numbers in writing and check them against the statute. Ask the association for an itemized balance, identify which part is assessments and which is fines and fees, and request a payment plan if you are still inside the cure period. If an expedited foreclosure application or a lawsuit has already been filed, a real estate attorney is worth calling the same week.

If keeping the house no longer makes sense, selling before the association reaches the courthouse protects whatever equity you have built. We buy houses in HOA subdivisions across the area, and if you need to sell your house fast in Arlington with a balance still open, or want to compare options to stop a foreclosure in Texas, the resale certificate is the first document to request.

House Buyers Texas buys houses; we are not attorneys and this is not legal or tax advice. The rules turn on facts specific to your situation, so an attorney or CPA is worth the consultation before you commit to a route.