Assessment Update

To people who see their HOA assessments as “club dues”–an optional payment they choose to pay or not–the reality can be jarring.  In Idaho, and many other states, the association has a forecloseable lien on each homeowner’s property.  While foreclosing on houses is not profitable right now, it still remains an option for an association with few other enforcement choices.

An association’s lien is usually subordinate to a mortgage.  That means the mortgage would have to be paid first.   But, homeowners who head into a negotiation with an association threatening to foreclose ought to be aware that the HOA has different motivations than a lender.

While a lender may be interested in keeping a person in the home in hopes of future payments, when an HOA finally (and hopefully after many other attempts at enforcement) resorts to foreclosure, it is interested in getting a new owner into the property that can pay his share of the common expenses.  Keeping someone in the house who has proven not capable of meeting those burdens is not a priority, as it might have been for a lending bank.  Of course, other consideration also may come in to play, but it is good to understand these different dynamics.


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