How to Stop HOA Foreclosure in Florida 

It’s a common belief that only banks can foreclose on a home, but in Florida, homeowners' associations (HOAs) also have the legal authority to initiate foreclosure proceedings for unpaid dues. This means that even if your mortgage payments are current, falling behind on HOA assessments can put your property at risk. Grasping what triggers and how to stop HOA foreclosure in Florida is key for homeowners facing financial difficulties. It helps you take informed steps to protect your home and financial well-being.

What Triggers an HOA Foreclosure in Florida?

When a homeowner fails to pay HOA assessments, dues, or fines in Florida, the association can place a lien on the property. If the delinquency exceeds $1,000, the HOA has the authority to initiate foreclosure proceedings. This process is separate from mortgage foreclosures and can occur even if mortgage payments are current. The legal basis for this is outlined in Florida Statute § 720.3085(1)(c), which allows HOAs to foreclose a lien for assessments in the same manner as a real property mortgage. 

The Legal Process of HOA Foreclosure in Florida

Florida requires a judicial process for HOA foreclosures, meaning the HOA must file a lawsuit in court. The process involves several steps:

1. Notice of Intent to Lien: The HOA sends a written notice to the homeowner, providing 45 days to pay the outstanding assessments before filing a lien.

2. Filing of the Lien: If the homeowner does not pay within the 45-day period, the HOA records a claim of lien in the public records of the county where the property is located. The lien secures all unpaid assessments, interest, late charges, and reasonable attorney fees incurred by the association. 

3. Notice of Intent to Foreclose: At least 45 days after recording the lien, the HOA must send a notice of intent to foreclose to the homeowner. This notice must also be sent by registered or certified mail, return receipt requested, and by first-class mail. 

4. Court Proceedings: If the homeowner still does not pay, the HOA can file a lawsuit to foreclose the lien. The court process involves filing a complaint, serving the homeowner, and potentially going through a trial. If the court rules in favor of the HOA, the property can be sold at a foreclosure sale to satisfy the debt.

Homeowners need to respond promptly to any notices received from the HOA. Ignoring these notices can lead to the loss of your home, even if your mortgage payments are up to date. If you receive a notice, consider contacting a qualified real estate attorney to discuss your options and protect your rights.

Read: What You Should Know About Homeowners Association

How to Stop HOA Foreclosure in Florida

Facing the possibility of losing your home due to unpaid HOA dues is daunting, but there are concrete steps you can take to prevent foreclosure.

1. Open Communication with Your HOA

Upon receiving a notice, promptly contact your HOA to discuss payment options. Many associations are willing to work with homeowners to set up payment plans or negotiate a settlement, especially if you can demonstrate a genuine effort to resolve the outstanding debt.

2. Consider Legal Defenses

If foreclosure proceedings have begun, there are several legal defenses you might consider:

• Improper Notice: Florida law requires HOAs to provide specific notices before filing a lien or foreclosure. Failure to adhere to these requirements can be a valid defense.

• Errors in the Amount Claimed: Discrepancies in the amount the HOA claims you owe, including unauthorized fees or incorrect calculations, can be challenged in court.

• Violations of HOA Procedures: If the HOA did not follow its own procedures as outlined in the governing documents, this could be a defense against foreclosure.

Successfully contesting the foreclosure may also allow you to recover attorney's fees.

3. Opt for Bankruptcy as a Strategy to Halt Foreclosure 

Filing for Chapter 13 bankruptcy can halt HOA foreclosure proceedings through an automatic stay. This legal action stops all collection activities, including foreclosure, allowing homeowners to reorganize their debts and propose a repayment plan that may include HOA dues. Bankruptcy is a complex process, so you should consider it with professional legal advice.

4. File a Notice of Contest of Lien

As a homeowner, you can challenge the validity of an HOA lien by filing a Notice of Contest of Lien. This action forces the HOA to initiate foreclosure proceedings within 90 days, otherwise, the lien becomes void. This strategy can be effective in cases where the HOA is not prepared to proceed with foreclosure.

5. Review HOA Governing Documents

It's important to review your HOA's governing documents, including the Declaration of Covenants, Conditions, and Restrictions (CC&Rs), bylaws, and rules and regulations. These documents outline the procedures the HOA must follow for assessments and foreclosures. Identifying any procedural errors can provide a basis for legal defense.

6. Explore Refinancing Options

If you have equity in your home, refinancing your mortgage to pay off the HOA debt might be an option. This can consolidate your debts into a single payment and lower your overall interest rate.

7. Seek Guidance from Legal and Real Estate Professionals

Consulting with a real estate attorney can clarify your legal rights and potential defenses. Additionally, experienced real estate professionals can assess your property's value and explore options like refinancing or selling. Their combined expertise provides a comprehensive approach to protecting your home.

Protect Your Home Investment with Florida Realty Marketplace

Dealing with the threat of HOA foreclosure is a complex and stressful experience. Whether you're trying to prevent foreclosure or considering purchasing a property that has been foreclosed upon by an HOA, having knowledgeable real estate professionals on your side is invaluable.

At Florida Realty Marketplace, we connect clients with seasoned real estate experts who are well-versed in the intricacies of HOA-related issues. Unlike many in the industry, our team comprises only experienced professionals dedicated to providing informed and reliable guidance. If you're facing HOA foreclosure or exploring opportunities in the real estate market, our experts are here to support you every step of the way.

To gain insight into your property's value, See What Your Home Is Worth. Contact Us to connect with our real estate professionals.