Conroe, Texas real estate attorney explains HOA foreclosure procedures

A Texas homeowners’ association (HOA) may foreclose on a property if the homeowner falls behind on HOA assessments. Before January 1, 2012, HOAs could foreclose on homes without going to court.  Now, an HOA may not foreclose an assessment lien unless it obtains a court order.  Here’s an overview of the procedure.  Your Conroe, Texas real estate attorney can provide you with further details.

Expedited foreclosure

To foreclose an assessment lien, an HOA must follow an “expedited” court procedure that is quicker than a regular judicial foreclosure.  This is the same procedure used by lenders to foreclose home equity loans and tax loans.

Before the HOA can begin the foreclosure procedure, it must give all subordinate holders of deed of trust liens written notice and 60 days to cure the delinquency. If the delinquency is not cured, the HOA then must file an application with the court.  The application is mailed to the homeowner who has 38 days from the date of mailing to file a response.

If the homeowner responds, the court schedules a hearing at which the HOA has to prove it is entitled to foreclose. If the homeowner does not respond, the HOA must file a motion with the court requesting a foreclosure order, which the court must grant within 30 days.

Even if a court grants the application, a homeowner may be able to prevent the foreclosure by filing a separate lawsuit contesting the assessment.  The suit can be filed up until the day before the foreclosure sale.  In that case, the expedited foreclosure case will be dismissed and the issues will be resolved in the homeowner’s suit.  Filing a bankruptcy case before the sale is another possible alternative for the homeowner to prevent the foreclosure sale.

If the home is sold at a foreclosure sale, the homeowner can redeem the property within 180 days of the date that the HOA mailed the owner notice of the sale. The purchaser cannot transfer the property to anyone else during the redemption period.

A homeowner can agree in writing to waive the expedited foreclosure procedure, but the waiver may not be required as a condition of the sale or transfer of the property.

Removal of HOA’s right to foreclose

HOA members may now vote to remove an HOA’s right to foreclose an assessment lien. The right to foreclose will be removed if at least 67 percent of the total votes allocated to property owners in the HOA vote in favor of removal.  Owners holding at least 10 percent of all voting interests in the HOA may require the HOA to hold a special meeting to take the vote.

Contact a Conroe, Texas real estate attorney

For assistance with homeowners’ association foreclosures or other Texas real estate matters, call a Conroe, Texas real estate attorney at the Peterson Law Group.  We can be reached at 936-33704681 or 979-703-7014.

About Chris Peterson

Chris Peterson is an attorney and the owner and founder of Peterson Law Group, a Texas law firm with offices in Bryan/College Station and Kingwood. He mainly practices in the areas of Estate Planning and Business Planning. Chris is also a Certified Estate Planner. Besides his law practice, Chris is a serial entrepreneur and community volunteer. He is known for his cutting edge law practice that utilizes technology to deliver efficient, excellent work.