I haven't paid my HOA fees for a while. They are threatening to foreclose. is that possible?

In times of economic down-turn, the question of which is more important to pay, your mortgage payment or your HOA dues, the answer seems to be pretty obvious. The unfortunate truth, however, is that by signing the HOA agreement, you have signed a legal document promising to pay the fees in order to remain a resident in good standing. With this in mind, as impossible as it might seem, since you are paying your mortgage, you can have your house foreclosed upon if you fail to pay those HOA dues.

It does depend upon which state you live in whether this is a possibility. There are many states that have what is referred to as "non-judicial foreclosures" which allows Homeowner's Associations to foreclose on property where the owner has failed to make timely payments.  The process proceeds as follows:

1. The homeowner fall behind in paying HOA dues
2. The HOA files a lien against the owner's property for back dues not paid
3. A sheriff is hired by the HOA to sell the property so that the HOA can collect the dues owed them

This process is like a traditional foreclosure only in this case it can happen even if the person is current on his/her mortgage payments.

The state of Connecticut is one such state that has these laws. If a person falls more than 2 months behind on HOA dues, the Association can foreclose on the property, forcing the sale of the property. As they do so, they are also given the legal right to collect back dues, as well as taxes and penalties as well as lawyer fees, all before the first and/or second mortgage holders are paid. They in essence receive priority as a creditor in states with these laws.