HOA Fees: What Happens When Homeowners Fail to Pay as Required?

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Homeowners living in HOA Communities face a variety of requirements, regulations and rules by choosing to live in a community governed by a Homeowners’ Association.  One of the requirements for members of an HOA is the payment of HOA fees.  This article is designed to give members of HOAs basic information concerning HOA Fees and many of the issues that come along with them.

Contractual Obligation to Pay HOA Fees

The obligation for members of an HOA to pay the fees assessed by the HOA primarily comes as a contractual obligation which is created by the Covenants, Conditions, and Restrictions (CC&Rs), as well as the Bylaws and Operating Rules of the HOA.  The obligation to pay such fees runs with the land/property/condo and as such, the contractual obligation continues on until an HOA property is transferred to the next owner.  Depending on the HOA, the obligation to pay fees can be based on the CC&Rs, the Bylaws of the Association or potentially other types of governing documents depending on what state the HOA is situated in.

The CC&Rs Provision That Owners Need to Read

HOA fees are the costs assessed to property owners in HOA governed properties for items such as lawn care, snow removal, utilities, property maintenance, common area maintenance, security and similar items.  Some of the more expensive common area maintenance items can include swimming pools and equipment that is located in community building.  The amount and type of items that are included in HOA fees will vary depending on the nature of the property, its location, and how extensive the services are that are provided within the context of the HOA.  In general, CC&Rs provide that Homeowners are not permitted to offset anything owed to the HOA for fees in exchange for items that the homeowner believes should have been provided by the HOA. Here is an example of the language this provision provides:


NO OFFSET. The obligation of every Owner to pay assessments levied by the Association is absolute and shall not be affected by any claim the Owner may have, or believes he has, against any other Person, including Declarant or the Association, nor shall such obligation be affected by any irregularity in the manner or timing in which notice of assessment is given.


Based on the above, homeowners cannot escape the contractual obligation to pay HOA fees due to an alleged mismanagement or failure to act allegation by the homeowners’ association or its agents.

Are HOAs required to adopt a Collection Policy?

The question of whether HOAs are required to adopt a fee collection policy will vary based upon applicable state law.  In many states, while the HOA is not required to adopt a fee collection policy, if the HOA Board of Directors does so, it does make things simpler and provides both the HOA members and Board members with a road map as to how the policy should be used in instances where an HOA member has failed to pay the fees.

What are the Primary Functions of an HOA?

In general, the primary function of the HOA is to provide for maintenance and upkeep of the community and enforcement of the CC&Rs as well as rules in place to help to ensure the long term viability of the community and the value of the property owners’ investments.  Thus, the function of the HOA is to determine what services are needed to do so, contract for those services and then collect sufficient fees for the services needed while maintaining reserve funds to deal with unexpected maintenance issues that may arise.

What Steps Do HOAs Take to Collect Delinquent Fees?

When an HOA is faced with a homeowner who has not paid the required fees when due, it can be a difficult process.  This is where it is important for an HOA to have a standard process or protocol to follow to also ensure that issues of discrimination do not arise. In other words, all homeowners who have not paid fees at the same interval should be given the same notifications and opportunity to correct the failure to pay the fees assessed.  This is also important so that HOAs do not open themselves up to claims of discrimination for failing to have a consistent collection policy.

Friendly Reminder (Late Notice)

Generally, HOAs start the collection process by sending the defaulting owner a friendly dues reminder notice.  Sometimes things get lost in the mail or simply overlooked and in the a good portion of the cases of late payment, a simple friendly reminder can get the job done.  If that doesn’t work, then associations take more formalized procedures to collect the fees.

Initial HOA Collection Demand Letter

After the initial friendly reminder notice, if the homeowners fails to respond or take action, the next step HOAs generally take is a formal demand letter which must meet the requirements of the Fair Debt Collection Practices Act.  That statute is beyond the scope of this article but suffice it to say that before embarking on initial formal demand letters for collection, it is wise for the HOA to obtain good legal advice to ensure compliance with the Fair Debt Collection Practices Act.  As noted in one of the cases mentioned below, failure to follow the requirements of the Fair Debt Collection Practices Act can lead to problems for HOAs and their lawyers.  This can also be a potential basis for a homeowner to challenge a collection action.

Subsequent HOA Collection Demands

After the initial demand letter, additional collection letters can be sent.  If that does not work, then some of the other options available to homeowners associations are enforcement of a lien, a personal money judgment lawsuit and even a foreclosure lawsuit. The options available will vary by state law and also will depend on the terms and conditions including in the CC&Rs.  From a homeowner’s perspective, it does not make a great deal of sense to allow a dispute over fees to get to this extent because at this point, it has a serious impact on an individual’s credit and potentially his or her investment over what sometimes is not a huge amount of money.

Can Homeowners Withhold HOA Payment due to an HOA’s Alleged Failure to Perform?

In general, Homeowners cannot offset payment of dues for the HOA’s failure to perform on its obligations.  This is typically where there is a no offset clause included in the HOA’s CC&Rs.

Are Homeowners Liable for Attorneys’ Fees?

In many states, Homeowners can be held liable for attorneys’ fees and related collection costs if they fail to pay their HOA fees as scheduled.  This varies depending on the state law involved. If a homeowner reads the community’s CC&Rs, under the “Obligation to Pay Maintenance Assessments” provision, you will find language relating to a homeowner’s default of payment and the association’s right to enforce payment. Generally, the CC&Rs provide that if a homeowner defaults on the HOA fee payment and compels the association to commence collection procedures, if the association prevails in court, the homeowner would be liable for the association’s legal fees and costs it incurred attempting to collect the past due fees.

What Steps Can Homeowners Take to Resolve Collections Matters?

If homeowners are facing collection matters initiated by the HOA, the first place to start is by discussing the issue with the Board of Directors for the HOA or its managing agent.  If there are reasons why the Homeowner is not paying (unaddressed maintenance issues, etc) then those can be discussed.  It is also possible that an alternative arrangement can be worked out if the Homeowner is experiencing a financial hardship.  Rather than spending thousands of dollars on litigation, there are very often ways in which homeowners can address the issues without ending up with a personal money judgment lawsuit, foreclosure or other legal remedies being utilized.  It is also important for HOA members to understand their legal rights and the procedures HOAs are required to follow when collecting HOA fees.  This will vary by state most generally but information on these topics is available to HOA members on this website.

Case Examples

In a 2017 case, a court found in favor of a homeowner because the notification processes and demand letter were not consistent with the requirements of the Fair Debt Collection Practices ActMashiri v. Epsten Grinnell & Howell, 845 F.3d 984 (2017).  This case hits home the point that if you are on an HOA Board or responsible for collecting fees, there are many legal protections that apply to HOA members, the Fair Debt Collection Practices Act being one of them.  This is also an important case from the standpoint that HOA members need to know that HOAs need to properly follow applicable laws and procedures when attempting to collect unpaid HOA fees from homeowners.

In a 2014 case, a California Court found that HOAs are required to accept partial payments made by a delinquent homeowner and to allocate them as provided in California law, even after the association has filed an assessment lien.  Huntington Continental Townhouse Association, Inc. v. Miner, 230 Cal.App.4th 590 (2014).  While this case is somewhat specific to California law, it demonstrates that sometimes external laws and regulations will require HOAs to provide different options to HOA members (accepting partial payments in this case) then perhaps what the association’s bylaws provided for.  This type of issue also demonstrates that it is important for HOA members to understand what the rights of the HOA are in terms of collecting fees from HOA members.


At the end of the day, HOA members do have a contractual responsibility to ensure their fees are paid.  When the failure to do so happens, it is generally a much better practice for HOA members to find ways to resolve those issues short of litigation.  Litigation can be costly and frankly can result in adverse consumer credit consequences to the HOA member.  In most cases, that is simply not worth the risk nor hassle involved.  It is also important that HOA members not become viewed with contempt by their fellow members.  A continued failure to pay fees can result in great frustration by other members of the HOA and is something HOA members also need to consider.