If you fail to pay your homeowners’ association (HOA) or condominium owners’ association (COA) assessments, the association might sell your home at a foreclosure sale and use the proceeds to repay the amount you owe. But there’s a chance you could get your home back after the sale. Some states have a law that allows foreclosed homeowners to repurchase or “redeem” their home following an HOA or COA foreclosure.
Right to Redeem After an HOA or COA Foreclosure
Homeowners in a few states get the right to buy back (redeem) their property after an HOA or COA foreclosure during what’s called a “redemption period.” The amount of time a foreclosed homeowner gets to redeem the home, if state law provides a redemption period, varies from state to state.Factors affecting the amount of time to redeem.State law sometimes sets out different redemption periods based on the circumstances. A few factors that might affect the length of the redemption are:
- whether the property is part of an HOA or COA
- whether the foreclosure is nonjudicial or judicial, and
- whether the homeowner abandons (permanently moves out of) the property before the foreclosure ends.
Cost to redeem.Typically, in order to redeem the property, a foreclosed homeowner has to pay:
- the overdue assessments or the price the buyer at the foreclosure sale paid
- interest, and
- attorneys’ fees and costs.
Right to Redeem After Foreclosure in General
Even if state law doesn’t provide a specific right to redeem after an HOA or COA foreclosure, many states have a law that allows homeowners to redeem following a mortgage or deed of trust foreclosure. That general law might apply to HOA and COA foreclosures too.
How to Avoid Foreclosure in the First Place: A Payment Plan
If you’re behind in paying assessments to an HOA or COA and can’t afford to get caught up, you might be able to negotiate a payment plan with the association. That way, you can pay the amounts you owe in installments and avoid a foreclosure. It’s a good idea to contact your HOA or COA as soon as you fall behind in assessments—before a foreclosure begins—to arrange a payment plan.
HOA and COA laws are different in each state. If you lost your home to a foreclosure because of unpaid association assessments, consult with an attorney in your state to find out whether state law provides a redemption period in your circumstances. If you need information about various ways to avoid a foreclosure, consider talking to a HUD-approved housing counselor.