If you own a rental condo in a development overseen by a homeowners association (HOA), be on your guard. One missed bill could land you in a heap of trouble.
The Wall Street Journal reports HOA-instigated foreclosures are on the rise—and fast. Citing real estate data and analysis company ATTOM’s findings, there were 6,376 properties with foreclosure activity—from default notices to completed sales—tied to HOA actions in the first quarter of 2026. This marks a 40% rise from two years prior.
“Aggressive Collections”
“HOAs are being forced into more aggressive collections to avoid their own financial collapse,” Brian Fox, co-founder of real estate technology firm Benutech, which tracks HOA delinquency trends and foreclosures, told the Journal.
The primary legal mechanism driving the rapid increase in enforcement is a “super-lien” status, which half the U.S. states have in their legal arsenal. It allows an HOA’s lien to take precedence over other recorded instruments, including the primary mortgage holder. Something as small as a delinquent HOA bill, when escalated, can end up as a public auction.
100% Increase in General Liability Insurance for HOAs
For HOAs, the costs for condo and home maintenance of public spaces, including staffing and lawn care materials, have been rising precipitously. Citing the Foundation for Community Association Research, the Journal reports that general liability insurance for HOAs rose for 91% of community associations, with some seeing jumps of more than 100%.
The pressure on HOAs has been no more apparent than in Florida since Senate Bill 4D was passed in 2022, following the deadly Surfside condo collapse, with HOAs mandated to maintain sufficient reserve funds to carry out essential repairs—the expense of which was passed onto cash-strapped owners, already dealing with rising insurance costs.
A condo and co-op reform bill, HB 913, has helped to offset those expenses. However, the escalation of premiums remains with many HOAs. The Journal cites the case of a Long Island HOA where the annual premium increased from $60,000 to $360,000.
For HOAs, the lack of money means the whole community suffers, and property values, along with the ability to carry out maintenance, decrease—thus the need to pursue expedited legal action.
HOA Foreclosures Exist Outside of Standard Channels
Investors need to be aware that these legal mechanisms operate outside of standard judicial foreclosure channels in many jurisdictions. A simple misplaced letter of default by a management company, or one sent to the wrong address, could trigger a lien, leading to a foreclosure. When a condo board, motivated to move at an expedited pace, starts turning the legal wheels for foreclosure, it’s often hard for a homeowner to catch up.
“It’s a very difficult thing to fight,” attorney Erik Perez, co-founder of Perez Mayoral P.A. in Miami, told Homes.com News. Perez’s firm represents homeowners in challenges against community associations.
The cost-of-living crisis, along with the end of COVID-19 pandemic moratoriums, are among the main reasons Perez attributed to the rise in condo foreclosures—an opinion shared by the Community Associations Institute, a national advocacy organization.
Inflation, Insurance, and Maintenance are Causing Costs to Spiral for Landlords
A spokesperson for the Community Associations Institute said in an email to Homes.com:
“CAI believes the increase in community association foreclosures reflects the broader rise in housing costs and financial pressures affecting homeowners across the country. Inflation, rising insurance premiums, higher maintenance and utility costs, and aging infrastructure have increased the cost of housing generally, including in community associations.”
The Dangers for Investors Who Own Condos
Many landlords start their investment journey with a condo. Often, it was a property they once lived in, which they then used as a rental after moving into a larger property. For investors who own condos and do not live in the same development, there are many ways bills can fall through the cracks, triggering a foreclosure action.
Off-site mail delivery, third-party property management communication, or online owner portals are particularly vulnerable. An outdated billing file, unpaid P.O. box fee, or mail the tenant didn’t pass on can mean an investor remains completely unaware of a bill that could trigger a legal action with a ticking clock. The simple act of going on vacation and not having a secure system to check mail could result in a missed HOA bill.
Ways for Landlords to Ensure They Do Not Fall Behind on HOA Bills
Automate HOA payments
By putting regular assessments on autopay from a dedicated account that has enough cash to cover increases, a landlord has no reason to miss a payment.
Monitor all property-related communications remotely
Having all mail go to a PO box or mail collection system that scans all envelopes and sends them to your e-mail address ensures that you know who is sending you mail. These services, such as iPostal.com, will also forward the mail to another address with expedited delivery if needed.
Have someone keep an eye on the property
Should the HOA decide to pin a violation notice to your door or put one in your mailbox, having someone routinely check on the premises will ensure you receive it before any action can commence.
Budget for assessments and fee increases
It’s tough being a landlord these days amid escalating costs, but budgeting beyond monthly HOA dues can save you a lot of hassle. Put money aside for special assessments such as maintenance, insurance, and infrastructure costs, all of which continue to rise.
Act immediately if a balance or notice appears
Should you receive an unexpected balance or notice, request an itemized account from the HOA’s records. Verify that the charges are accurate. Challenge errors quickly, and document communication. Late fees, interest, and legal costs can inflate a small initial debt.
Ensure your tenant is adhering to all HOA bylaws
Your tenant could be your weakest link. If they are parking incorrectly, making unapproved alterations or additions (adding swing sets or posting signs or flags), or leaving a trash receptacle on the street, they may be the cause of mounting HOA fees, unbeknownst to you, the landlord.
Make sure you communicate clearly with your tenant and with the HOA management company so you are aware of all liens and actions against you at all times.
Final Thoughts
For an absentee landlord, the biggest area of vulnerability is a missed default notice. But setting up a system that makes this impossible to happen while ensuring you are well financed for unforeseen fines, bills, and dues increases will help keep the HOA wolves at bay. Each state has different foreclosure proceedings, so make sure you know what yours are.
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