Can my HOA foreclose on my house in North Carolina?
Yes. A North Carolina homeowners association can foreclose on a house for unpaid dues — even when the mortgage is current. But there are limits on when, and for what.
The rules
The lien
Unpaid assessments become a lien on the house after 30 days. The association has to mail you a statement at least 15 days before filing it.
When it can foreclose
Once assessments are 90 days or more past due. Before starting, it must give you notice of its intent to foreclose and a chance to discuss a payment plan.
What it cannot foreclose for
A lien made up only of fines, interest on fines, or attorney fees tied to fines cannot go through the Clerk. The association has to sue instead.
How it runs
For assessments, the same way as a mortgage foreclosure: a hearing before the Clerk, a public auction, then a ten-day upset bid period.
N.C.G.S. 47F-3-116 (planned communities), 47C-3-116 (condominiums)
Why it is dangerous
An HOA can sell a house over a few thousand dollars in dues, and the auction buyer takes it subject to the mortgage. You can lose all of your equity over a small debt. If the sale brings more than is owed, the extra goes through the Clerk as surplus funds.
How to stop it
Pay the assessments, fees and costs, or agree to a payment plan in writing. Paying everything owed before the upset bid period ends also ends the proceeding. If you cannot afford the house at all, selling on your terms keeps the equity that an HOA auction would take. Selling before foreclosure.
Frequently asked questions
Can an HOA foreclose if my mortgage is paid?
Yes. The HOA lien is separate from the mortgage, and the association can foreclose it on its own.
Can my HOA foreclose over fines?
Not through the Clerk. A lien made up only of fines and fine-related fees requires a lawsuit.
How much does an HOA have to be owed to foreclose?
There is no minimum dollar amount in the statute. The trigger is assessments being 90 days or more past due.
General information for North Carolina homeowners. It is not legal, tax or financial advice. Terri Lombardo is a licensed real estate broker, not an attorney or tax adviser.
Free HUD-approved housing counseling is available to North Carolina homeowners through the NC Housing Finance Agency on 1-888-442-8188.
Got a letter from your HOA?
Tell us what it says and what you owe. We will tell you how much time you have and the fastest way out.
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