Homeowners associations (HOAs) across the United States are experiencing significant financial pressure, leading to a surge in foreclosures on residents who fall behind on payments. This trend is driven by escalating insurance premiums, depleted reserve funds, and increased expenses for safety measures implemented following the 2021 Surfside condominium collapse. Consequently, HOAs are adopting more aggressive collection tactics, including skipping grace periods and immediately engaging legal counsel.
Housing data indicates a nearly 40% increase in HOA foreclosures over the past two years, reaching 6,376 properties in the first quarter. This rate outpaces overall mortgage foreclosure trends, according to real estate analytics firm Attom. These foreclosure sales are typically conducted as auctions. If a property is sold at auction, the homeowner retains a 90-day right of redemption to repurchase the home by paying all delinquent amounts, plus collection fees and costs. Should there be no bidders, the HOA may take ownership and subsequently sell the property.
Attorneys representing homeowners in HOA disputes note that missed dues often represent only a portion of the total debt. The substantial burden frequently comes from ballooning collection costs, as HOAs often outsource delinquencies to specialized firms. These firms, sometimes owned by the same corporate attorneys advising the HOA, have a financial incentive to pursue foreclosures aggressively. This practice has led to concerns about whether HOAs are prioritizing debt recovery over assisting residents in resolving their financial obligations.
Beyond delinquencies, HOAs face rising costs for insurance, staffing, property maintenance, and materials. For example, one HOA on Long Island saw its annual insurance premium jump from $60,000 to $360,000. The implementation of stricter safety measures, mandated in response to the Champlain Towers South tragedy, has further contributed to these increased operational expenses.
In some states, "super priority" laws empower HOAs to initiate foreclosures on unpaid dues even before banks holding senior liens can. This financial strain is not only impacting individual homeowners, who can lose their homes if unable to clear back dues, legal fees, and collection costs within the redemption period, but it also poses a risk to neighborhood property values due to delayed upkeep and legal battles.
Reports show that in 2025, HOAs filed over 285,000 liens, an increase of approximately 8.8% from the previous year. The financial challenges have led some communities, like Fairview Condo 1 in Middle Island, New York, to levy special assessments and postpone necessary upkeep as a significant percentage of units fall behind on payments. In one instance, former boxer Floyd Mayweather Jr. faced an HOA foreclosure action in Las Vegas for nearly $25,000 in unpaid dues, interest, and legal fees, which his attorney attributed to an accounting oversight that has since been resolved.
While some HOAs are compelled to pursue foreclosures to prevent financial collapse, the Community Associations Institute, an HOA representative body, states that many associations do offer payment plans to assist homeowners facing financial difficulties.