HOAs Foreclose On Homes Over $500 In Late Dues Then Flip For Personal Profit

In Texas, Homeowner’s Associations (HOAs) are on a foreclosing spree, selling members’ homes on the courthouse steps for just a few thousand dollars simply because they are a few hundred dollars behind on their homeowner’s dues. Sometimes they’re even selling it to HOA board members, who turn around and sell the house for half of what it’s worth, netting a tidy profit.

It’s called nonjudicial foreclosure, and it can happen without a judge or arbitrator of any sort. Basically, they just file the paperwork. In Texas, the process only takes 27 days. The law says that HOAs can foreclose for nonpayment of dues, but thanks to a loophole, HOAs are also foreclosing for unpaid fines. Before the recession, these type of foreclosures were only 1% of all foreclosures, but since the economic downturn, that number has risen to 10%.


Solomons says HOA board members and advocates testify and say, “‘We need the power to access and fine and foreclose, and we need the money. And we look for people in violation of the rules and restrictions that we put in place.'”

“And they drive around in golf carts looking for them,” Solomons says.

The best advice for a homeowner who finds themselves behind the eight-ball like this?

“I suggest you call the association and cry,” a Houston lawyer for homeowners tells NPR.

Not So Neighborly Associations Foreclosing On Homes [NPR] (Thanks to Kai!)

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