Homeowners’ associations in Texas have the right to foreclose on properties for unpaid assessments. The process differs from a standard deed-of-trust foreclosure in an important way. For a residential subdivision association governed by Chapter 209, Section 209.0092 generally requires the association to obtain a court order through an expedited foreclosure proceeding before it can foreclose an assessment lien, unless the owner agrees in writing at the time to waive it. Condominium associations operate under Chapter 82 and may foreclose under a power of sale. HOA liens also carry their own rules and priority problems that make them a distinct area of practice.
We represent homeowners’ associations pursuing delinquent assessments, and we also represent lenders and other creditors who need to understand how HOA liens interact with their own security interests.
How HOA Liens Work in Texas
When a homeowner falls behind on HOA dues, fees, or assessments, the association can file a lien in the county records for the property’s location. Once that lien is filed and the notice requirements are met, the association has the right to foreclose, meaning it can force the sale of the property to recover the unpaid amounts.
The rules governing this process are found in the Texas Property Code and, for residential subdivisions, in the recorded Declaration of Covenants, Conditions, and Restrictions (CC&Rs) that govern the particular development. The specific procedures the HOA must follow depend on what those documents say.
How Lien Priority Works
The priority rules are where this gets complicated. An HOA assessment lien that was recorded after a first mortgage deed of trust is junior to the first mortgage. That means if the HOA forecloses its lien, the first mortgage lender is not harmed, because the lender’s lien survives. The buyer at the HOA foreclosure sale takes the property subject to the first mortgage.
On the flip side, if the first mortgage lender forecloses, the HOA’s assessment lien, being junior, is generally extinguished by the sale.
Understanding this priority relationship is important for both HOAs and lenders. An HOA foreclosure that produces a buyer who then stops paying the first mortgage can create a cascade of problems. And a first mortgage lender who forecloses without accounting for accumulated HOA assessments can face an angry association and an unhappy buyer.
Notice Requirements Before an HOA Can Foreclose
Texas law places restrictions on when an HOA can foreclose for unpaid assessments. There are minimum threshold amounts and notice requirements that must be satisfied before the foreclosure process can begin. The HOA must give the homeowner proper written notice and an opportunity to cure. Skipping these steps can expose the association to a wrongful foreclosure claim.
We ensure that every HOA foreclosure we handle is preceded by the required notices and documentation. Cutting corners in this area is not worth it.
The Right of Redemption After an HOA Sale
Unlike an ordinary mortgage foreclosure, an HOA sale does not end the owner’s rights on the courthouse steps. In a residential subdivision, the owner or a lienholder of record may redeem the property within 180 days after the association mails written notice of the sale. In a condominium, the owner may redeem within 90 days after the date of the sale. The redeeming party must pay what the statute requires, including assessments due, costs, and interest. A buyer at an HOA foreclosure sale therefore takes subject to that redemption window and cannot transfer the property to anyone other than a redeeming owner while it is open.
We Can Help Both Sides
If you represent a homeowners’ association with delinquent members, we can help you collect through the lien and foreclosure process. If you are a lender whose collateral is subject to an HOA lien and you want to understand your exposure, we can analyze the priority questions and advise you.
Contact us to discuss your specific situation.
In this section: ABCs of Foreclosure · Step 3: Lien Search · Step 4: The Sale
Frequently Asked Questions
Can an HOA foreclose even if the homeowner is current on their mortgage?
Yes. An HOA lien is independent of the mortgage. If a homeowner is current on their first mortgage but delinquent on HOA assessments, the HOA can foreclose its own lien without the mortgage lender's involvement. The foreclosure sale will produce a buyer who takes the property subject to the first mortgage; meaning the first mortgage lender is not harmed by the HOA's action, but the homeowner loses the property.
What happens to an HOA lien when the first mortgage lender forecloses?
In most cases, an HOA assessment lien that is junior to the first mortgage is extinguished by the first mortgage lender's foreclosure sale. However, some HOA declarations give the HOA a "super-lien" for a limited number of months of assessments that has priority even over a first mortgage. Whether your HOA has a super-lien provision depends on the specific declaration and applicable Texas law. We analyze priority questions like this as part of our pre-foreclosure review.
How much does a homeowner have to owe before an HOA can foreclose in Texas?
Texas law places restrictions on HOA foreclosure for residential properties, including minimum threshold amounts and mandatory notice and cure periods before the foreclosure process can begin. The specific requirements depend on whether the property is in a residential subdivision governed by Chapter 209 of the Texas Property Code or in a condominium association governed by the Texas Uniform Condominium Act. We identify the applicable rules for each HOA matter we handle.
I am a mortgage lender and one of my borrowers has an HOA lien on the property. What should I do?
Contact us. An HOA lien that is junior to your deed of trust can generally be extinguished by your foreclosure sale. However, if the HOA has a super-lien provision or if there are significant accumulated assessments, understanding the priority and the amount is important to your bid strategy. We analyze the HOA lien situation as part of the lien search we conduct on every foreclosure.