Your homeowners’ association (HOA( helps keep your neighborhood clean and safe by maintaining common areas and adhering to laws that preserve property values. HOA payments are required for these reasons, but what happens if you don’t pay them? Here’s everything you need to know about dues, including what they cover and what happens if you don’t pay them.

What are HOA fees?

HOA fees are necessary monthly, quarterly, or annual fees paid by residents of a homeowners association to help maintain the community’s amenities and common areas. The services provided by these fees will vary depending on the community’s requirements. Hence, expenses will differ as well. 

The additional expense may be worthwhile if it means saving money on amenities like a gym membership or a swimming pool or if it allows homeowners to outsource some aspects of home maintenance, such as lawn care.

HOA dues may be utilized for the following purposes: 

Amenities and services: Some HOAs may provide residents with access to a gym or pool, as well as security services such as a doorman, security guard, or automatic gates. 

Pest control: Some condominium and townhouse communities provide pest prevention and control services. 

Lawn maintenance: In most situations, the HOA dues you pay will cover the lawn on shared areas, though the association may have guidelines you must follow for your lawn care. 

City Services: Water, sewage, and trash pickup are examples of city services that may be included in HOA costs. 

Maintenance and repairs: These services may include snow removal and maintaining and repairing shared structures and common areas, depending on the weather in your area. In communities with a clubhouse, for example, some of your HOA dues will go toward that location.

Reserve funds: A part of your HOA payments will be put into a special savings account for the association to use in an emergency. For instance, if a window in the clubhouse breaks or a piece of gym equipment wears out, the HOA may spend this reserve on replacing it.

Insurance: Homeowners are still responsible for their insurance policies, but they may also be required to pay HOA dues to cover common areas within the association’s jurisdiction. 

Every homeowner’s association is different. It would be best if you read the Covenants, Conditions, and Restrictions (CC&Rs, or the HOA’s rules and regulations) to figure out how much you’ll have to pay for what’s covered.

What happens when you don’t pay

When you miss a payment, your HOA will usually tell you that you’re late on your dues and explain the implications, which may include being charged a late fee or interest until the payment is made. If you continue to miss or remain overdue on your payments, the association may describe any legal repercussions. 

Here are some things that could happen if you don’t pay your HOA payments.

Your privileges may be revoked. 

Your HOA may also restrict or eliminate your access to shared facilities or amenities like the gym or pool as a secondary or subsequent step. The goal is to get you to pay your HOA dues, so you may reclaim your privileges.

Your bills might be sent to collections. 

If you don’t make your payments, your HOA may employ a collection agency to get the money you owe. More notices, such as phone calls and letters, may be sent to you to persuade you to pay.

You could face legal action. 

Your HOA can sue you for unpaid dues, fines, and any accumulated interest if it’s permissible. If this occurs, your HOA may be able to garnish your earnings and deduct the amount owed from your bank accounts.

Your house could be repossessed.

Depending on your state, there will be limitations on how and when an HOA can commence a foreclosure on a home within the community. Your HOA can foreclose on a home over a tiny amount, such as a few hundred dollars, in places where there are no limits. 

If this occurs, the foreclosure will be either nonjudicial, meaning it will be sold without the involvement of a court, or judicial, meaning it will be handled through the state court system. 

Furthermore, the HOA may not require the recording of a lien to proceed with the foreclosure. In some areas, a written record of the CC&Rs declaration serves as the HOA lien, which takes effect when your payment is due. 

The specific rules and regulations will vary based on the situation.

What if I can’t pay my HOA dues?

Distressed homeowners should call their HOA as quickly as possible to tell them of their financial condition, particularly those affected by the COVID-19 economic fallout. 

Given that many people have recently experienced difficulties, such as a job loss or a significant decline in income, you may be able to work out a more affordable payment plan or other arrangements to avoid falling behind on your HOA costs.