Can an HOA foreclose on a home in Texas? Everything you need to know

Living in a homeowners association (HOA) or condominium owners association (COA) community in Texas can offer a wide range of benefits, from well-maintained common areas to shared amenities and consistent property values. When you buy a property in a Texas community association, you agree to abide by the rules outlined in the association’s governing documents. These guidelines can cover many aspects of property ownership, from architectural standards to fee obligations. But can an HOA foreclose on a home in Texas if a homeowner fails to pay these fees over an extended period? This question touches on the interplay between state law, the rights of community associations, and the rights of individual homeowners.

This article is not intended to and does not constitute legal advice or create an attorney-client relationship. Board members should consult their association’s attorney to discuss the legal implications of their decisions or actions prior to proceeding.
 

What is HOA foreclosure in Texas?

In Texas, if a homeowner falls behind on paying required dues or assessments to their HOA, the board may place a lien on the property. This lien gives the association a legal claim to recover the money owed. If the debt isn’t paid, the HOA can start the foreclosure process, which may ultimately lead to the sale of the home.

There are two types of HOA foreclosures in Texas: judicial and non-judicial. Most HOA foreclosures are non-judicial, meaning the property can be sold without going through a full court trial. However, even in non-judicial cases, the law typically requires an expedited court process known as a Rule 736 proceeding. This allows a judge to review and authorize the foreclosure quickly. In some situations, if the homeowner has agreed to waive this requirement in writing, the HOA can proceed without court involvement.

Foreclosure is generally considered a last resort. Before taking this step, HOAs usually make several attempts to collect the debt by sending notices, offering payment options, or working out a resolution with the homeowner. But if these efforts don’t lead to payment, and the debt continues to go unpaid, the HOA can legally move forward with foreclosure. If the homeowner doesn’t respond or resolve the issue in time, they could ultimately lose their home.
 

Can a COA or HOA foreclose on a Texas home?

Yes, both condominium owners associations and homeowners associations in Texas may have the authority to foreclose on homes within their community. However, the process can vary depending on whether it’s an HOA governed by Chapter 209 of the Property Code (the Texas Residential Property Owners Protection Act) or a COA governed by Chapter 82 of the Property Code (the Uniform Condominium Act).

Generally, for an HOA to move forward with foreclosure in Texas under Chapter 209:

• Before filing a lien, the HOA must send two notices: the first by first-class mail or email, and the second by certified mail at least 30 days later. The lien can only be filed 90 days after the second notice.
   
• The governing documents of the association must explicitly allow for foreclosure.
   
• The board must vote to authorize the foreclosure at a properly noticed meeting.
   
• A Notice of Default and Intent to Accelerate must be provided to give the homeowner a chance to pay before the debt is accelerated.
   
• If unpaid, the HOA may issue a Notice of Acceleration and Foreclosure Posting, which sets the sale date and is made public.

Unlike HOAs, condominium associations don’t follow the same two-step notice and 90-day waiting period. Instead, their ability to foreclose is guided by Chapter 82 and their own governing documents.
 

Can an HOA or COA put a lien on your home?

Yes, when a homeowner fails to pay assessments or other required charges, the HOA or COA may be able to record a lien against the property. This lien gives the association a legal claim to a portion of the property’s value equivalent to the debt owed.

Under Chapter 209, HOAs are not required to go to court to record a lien, but they do have to meet certain pre-lien requirements. Once recorded, that lien can:

• Appear in public property records
   
• Impact the homeowner’s ability to refinance or sell the home
   
• Accumulate interest, late fees, and legal costs
   
• Lead to foreclosure if the debt remains unpaid

Unlike a foreclosure, a lien doesn’t immediately result in an owner losing their home. Instead, it provides the association with a legal avenue to collect the debt if and when the property is sold or refinanced. A lien can, however, be a prerequisite for foreclosure.

To avoid a lien, many homeowners work out a payment plan with the association once they know they’re behind on dues. Texas law may require an HOA to offer certain payment plans under specified conditions, so it’s often wise for an owner to communicate with the board or property manager at the earliest sign of difficulty.

FirstService Residential works with boards across Texas to help communicate these policies clearly to homeowners, set up payment plans when appropriate, and avoid escalation. While liens and foreclosures are legal tools, they are generally viewed as a last resort.
 

Causes for HOA foreclosure

While every association is different, there are common reasons why foreclosures might occur in a Texas HOA or COA community:

• Chronic nonpayment of dues or assessments: This is by far the most common cause. If a homeowner consistently fails to pay monthly assessments or special assessments, the association may act to recover the debt.
   
• Special assessment defaults: Sometimes associations levy special assessments for large projects. A homeowner who doesn’t make these required payments may face collection efforts.
   
• Failure to follow payment plans: If an association has agreed to a written payment plan and the homeowner breaks it, the association may resort to further legal action.

Associations are not quick to foreclose. The process typically involves careful board deliberation, legal review, and extensive documentation. In many cases, the goal is simply to bring the homeowner current, not to take the property.
 

How to avoid Texas HOA foreclosure

If you’re a homeowner facing financial hardship, there are practical steps you can take to prevent an HOA or COA foreclosure. The earlier you reach out to your board or property management company, the more options you’ll likely have. Many associations are willing to discuss payment plans or offer temporary relief. Double-check your CC&Rs, bylaws, and any relevant policies your association uses to collect assessments. Knowing the specific guidelines can help you prepare a plan.

If foreclosure does occur, Texas law may provide a post-sale redemption period. For HOAs governed by Chapter 209, the homeowner may have the right to redeem the property within 180 days after the post-foreclosure notice of redemption rights is mailed. For COAs under Chapter 82, the redemption period is 90 days from the foreclosure sale.

It’s also worth noting that homestead protections under the Texas Constitution may affect whether an HOA can foreclose on a home in Texas, depending on whether the assessment lien attached before the owner took title. The specific language in your association’s declaration can impact this, so it’s essential to seek legal advice.

At FirstService Residential, we help boards develop fair and transparent assessment collection processes. We also provide communication tools and 24/7 resident support that make it easier for homeowners to stay informed, get help, and avoid falling behind. If your association needs guidance around assessments, payment policies, or foreclosure procedures, contact us today.