Can You Lose Your Home if You Stop Paying Your HOA Fees?

Falling behind on those payments could have lasting consequences.

If you own a home that's part of a homeowners association, or HOA, you're in good company. In 2021, more than 82% of newly constructed homes sold were part of an HOA, as per iPropertyManagement. And an estimated 53% of all homeowners live in an HOA community.

HOAs can really be a mixed bag. On the one hand, the monthly dues can be expensive. And if you happen to have a larger mortgage loan to contend with, those fees can be especially burdensome.

On the other hand, your HOA fees are designed to pay for different amenities you get to enjoy. These could include a community swimming pool, tennis courts, and a fitness center, depending on where you live.

When you buy a home that's subject to ongoing HOA fees, it's important to make sure those dues fit within your budget. But what if money gets tight or your income decreases and you start to fall behind? Not paying your HOA fees could have unfortunate consequences, so it's important to avoid that situation to the greatest extent possible.

The repercussions could be severe

You might miss an occasional HOA payment due to human error or being short on funds for the month. Usually, if you pay that bill upon getting a reminder notice, nothing too bad will come of it (though you may be assessed a late payment penalty or fee).

It's when you stop making those payments altogether that more severe repercussions can arise. Those will hinge on your HOA's rules, and in some cases, the state you live in. At a minimum, you might face late fees, penalties, and different restrictions. For example, your HOA's rules might dictate that you can't use common facilities like the gym or pool if you're delinquent on your dues.

In other cases, your HOA could sue you for unpaid dues, and from there, it may have the right to garnish your wages to get paid. And in an even more extreme situation, your HOA might be able to move forward with foreclosure proceedings on your home.

What to do if you can't pay your HOA fees

If you're having trouble keeping up with your HOA fees, don't ignore the problem. One of your first steps should be to reach out to your HOA board, discuss your situation, and see what help they can offer. In some cases, you may be eligible for a grace period of sorts, or you may be able to work out another arrangement.

That said, you generally can't expect to keep on living in your home without paying your HOA dues for an extended period of time. So if you're experiencing a financial hardship and don't expect your circumstances to change for quite some time, you may want to consult a legal professional to find out what your options are.

You should also know that if you fall behind on your HOA fees, your homeowners association could make it difficult to sell your home. So consulting a legal professional is a good way to protect yourself and help you emerge from that unfortunate situation with the best outcome possible.