Taylor Sanders of North Carolina learned a devastating lesson about HOA power when a missed $400 payment cost her everything.
After allegedly never receiving multiple notices about her unpaid dues, Sanders discovered the Weddington Hills HOA had placed a lien on her property. By the time she received a letter indicating she owed approximately $1,200, foreclosure proceedings were already underway. Her 3,300-square-foot home was sold for just $49,000 — then flipped for $850,000 five months later.
“It’s devastating for my children,” Sanders told Action 9 News. The HOA’s actions were entirely legal under North Carolina law, leaving Sanders with no recourse but to become an advocate for homeowner rights.
Understanding HOA Foreclosure Laws
In North Carolina, homeowners’ associations derive their powers from Chapter 47F of the state’s General Statute Code, according to the courts. Under current law, an HOA can place a lien on a property if assessments remain delinquent for 30 days. After 90 days of delinquency, the association can initiate foreclosure proceedings following a vote by the executive board.
An HOA’s lien power extends beyond unpaid dues to include late charges, rule violation fines, interest, collection costs, and attorneys’ fees, explaining how Sanders’ initial $400 debt ballooned to $1,200 so quickly.
There are some legal constraints. HOAs must send property owners notice of the debt 15 days before filing a lien claim. Once filed, the claim must be properly served on the homeowner. HOAs cannot include attorneys’ fees without notifying the homeowner of their intent to collect such fees, after which the owner has 15 days to pay the initial balance.
North Carolina legislators have been considering a bill that would provide homeowners with increased protections, requiring HOAs to meet stricter criteria before obtaining property liens. However, this bill has been stalled in the Legislature since May 2024.
Protecting Your Property
Set up automatic payments for HOA dues to avoid missed payments, according to attorney Jim White of JC White Law Group.
Keep detailed records and request annual statements to verify your payment history. Ensure the HOA has your current contact information to prevent missed notices.
If you receive a notice about unpaid dues, don’t ignore it — even if you believe it’s in error. Communicate proactively with your HOA board about payment difficulties and request a payment plan if needed. Pay the original assessment amount within the 15-day window after receiving notice to avoid additional attorneys’ fees.
Contest the foreclosure if the HOA failed to comply with procedural requirements. Review your HOA’s governing documents to ensure they’re acting within their authority.
Consider whether the HOA has violated North Carolina’s Unfair Debt Collection Statute, which prohibits deceptive collection practices. Consult with an attorney specializing in HOA law immediately — the foreclosure process moves quickly.
The National Crisis
Homeowners associations now govern communities where an estimated 74 million Americans live. In 2023, approximately 357,000 homes in the U.S. were in some stage of the foreclosure process, with over 270,000 having lenders start foreclosure activities — about 0.26% of all homes in the country, Newsweek reports.
The Sanders case is far from unique. Across the country, homeowners have lost properties worth hundreds of thousands of dollars over relatively small HOA debts. In some instances, homes have been foreclosed for debts as low as $200-$500, with the properties then sold for a fraction of their market value.
Several states are considering legislation that would limit an HOA’s ability to foreclose based on the debt size or require judicial oversight of the foreclosure process. Critics argue that the current system creates perverse incentives, with some HOAs and their law firms potentially benefiting financially from aggressive foreclosure actions.
HOA Reform Laws
Until stronger HOA reform laws are in place, your best defense is staying informed and proactive.
If a lien or foreclosure threat arises, don’t wait — get legal help from an attorney who knows HOA law. With the right strategy, you can protect your home and push back against overreach.