Written by Spectrum AM

In a time of inflation and rising costs, most people are currently looking for ways to cut costs and make their budget work. When it comes to your budget, you may be tempted to put any payments to your HOA for regular assessments or fines at the bottom of your priority list. But what happens when HOA fees get ignored or if you fail to pay your regular HOA assessments?

In this article, we’ll cover the impact of skipping payment and why it is important to address any fees or violations as they occur.

HOA Assessments and Fines

HOA boards put a lot of thought into the total amount to charge homeowners each month. The regular and special assessments that they collect determine the HOA’s budget, which is used to help maintain and run the community. Since the budget is dependent upon homeowners making their payments, it’s vital to the running of your community that assessments be paid on time.

Another type of charge you may see from your HOA is for fees tied to violations. If the HOA finds that you have broken the community’s rules, also known as the CC&Rs, they will issue a violation. Most violations will allow you time to resolve the issue before any additional action is taken. However, if you fail to resolve the issue within the allotted time frame, the HOA may charge fines.

So, What Happens If I Don’t Pay?

Whether it is a skipped assessment payment or an HOA fine that has been ignored, your HOA will take action to ensure that it receives the full payment it is owed. While each HOA will have a different process based off its governing documents and local state law, it may take one or more of the following actions to escalate missed payments.

The first step would likely involve the HOA charging late fees and interest for missed assessment payments or unpaid fines. You will likely receive communications from the association during this period as they attempt to collect your missed payment.

When you have missed payments on record, you will likely also see a loss of community privileges, like utilizing the community pool or clubhouse.

The next step of the escalation process would be for the HOA to take legal action . The type of legal action an association may take against you can include the following:

Filing a lawsuit against you . Should your payment issue remain unresolved, the HOA may file a lawsuit to assist them in collecting payment.

Placing a lien on your property . A lien is a legal claim placed on a property that gives the holder the right to obtain said property if debts are not paid. As a homeowner, you would be required to settle the lien prior to selling your property. For more information on property liens, check out our guide on liens when purchasing in an HOA .

Foreclosing on your property . The last, and often final, step your HOA may take to pursue payment is to foreclose on the lien that has been placed on your property.

If your payment issue escalates to the point where your HOA does take legal action, this could increase the amount of money you will ultimately have to pay due to court costs and the chance that you are required to pay for the HOA’s legal fees.

How Can I Tell Which Steps My HOA Will Follow?

As you can see, the price for avoiding HOA payments can become costly, especially if legal action is required. The specific steps that your HOA will take will depend on the process outlined in the association’s governing documents, which is set up based on local law. Some states won’t allow an HOA to file foreclosure, while others have no limitations.

While the process of collecting missed payments and fines may seem harsh, it is to ensure the effective running of your community. Without assessment payments from homeowners, your HOA wouldn’t be able to accomplish its main goal—maintaining your community and protecting property rates.

If you find yourself facing financial hardship, do know that your HOA will likely be able to work with you, whether it be allowing more time for making your payment or helping you set up a payment plan. By communicating with your HOA early, you can easily avoid any additional costs and any escalation on your account.

The post HOA Fees and Fines: What Happens If You Don’t Pay first appeared on Spectrum Association Management.

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