If you’ve fallen behind on your condo or homeowner association (HOA) fees, this might be a shocker for you: Your HOA or condo association might have the right to foreclose on your property.
And even for the vast majority of homeowners who never face foreclosure, the ripple effects of this little-noticed legal development could eventually be costly — in the form of higher interest rates and fees on your mortgage.
The number of Americans who live under the rules of a homeowners’ association has been steadily growing; by one estimate, nearly 80% of new construction is now governed by an HOA or condo association, and as many as 65 million Americans live in such properties. HOA fees, which can amount to $300 or $400 a month, typically pay for services that developments provide, such as landscaping, grass cutting and snow removal, as well as other capital improvements. And during tough economic times, it’s fairly common for squeezed homeowners to fall behind on those fees.