Rental condominium owners should be aware of an alarming rise in foreclosures initiated by homeowners associations (HOAs). According to data from ATTOM, over 6,300 properties faced foreclosure actions related to HOAs in the first quarter of 2026, an increase of 40% compared to two years earlier.
The surge in HOA foreclosures is attributed to heightened financial pressures on these organizations, compelling them to adopt aggressive collection practices. Many HOAs are contending with rising costs for maintenance and insurance, with general liability premiums increasing for 91% of community associations, and some experiencing increases exceeding 100%. Legislation in Florida, enacted after the 2022 Surfside condo tragedy, mandates that HOAs maintain sufficient reserve funds for essential repairs, further straining budgets already burdened by rising expenses.
Brian Fox, a co-founder of a real estate technology firm, noted that the "super-lien" status in many states allows HOAs’ liens to take precedence over primary mortgage holders, making it easier for them to initiate foreclosures for unpaid dues. This legal mechanism raises the risk for absentee landlords who may miss bills due to various factors, including mail delivery issues or reliance on third-party property managers.
Industry experts emphasize that inflation, rising insurance premiums, and the expiration of pandemic-related moratoriums contribute significantly to this trend. The Community Associations Institute acknowledges that increased costs are impacting homeowners nationwide, creating financial strains that can lead to foreclosure.
To mitigate risks, condominium owners are encouraged to automate payments, monitor property communications, budget for unexpected fees, and ensure tenant compliance with HOA rules.
Why this story matters
- The increase in HOA-induced foreclosures can significantly impact property values and community stability.
Key takeaway
- Owners should implement proactive measures to avoid missed payments that may lead to foreclosure actions.
Opposing viewpoint
- Some argue that aggressive HOA collections are necessary to ensure community maintenance and financial health.
