What happens if I don't pay my HOA dues?

A concerned homeowner in California who lives in a deed restricted community recently asked me what happens if he does not pay his HOA dues.

To begin, this is a serious matter and there are several important consequences to consider if you don't pay your assessment on time. Depending on the rules of your HOA, you could lose your voting rights since you would not be considered a member in good standing. This means that you are not allowed to vote with regard to all decisions impacting you as a homeowner within the community. Furthermore, the Association's annual budget would not be fully funded and the potential for a shortfall could arise which could cause a hardship for the community.

Another serious result of not paying your assessment is that you could incur late fees and interest. Some HOAs may even report you to the credit reporting bureaus and then hand over your account to the Association's attorney for resolution.

In the worst case scenario, depending on the laws of your state, you could possible loose your home to your HOA in the most serious circumstance. You should consult the covenants or governing documents of your HOA (the bylaws, the Deed Restriction, Rules, etc.) to learn more about your rights and responsibilities as a homeowner.