The Power of an HOA: When a Small Debt Can Put a Very Valuable Home at Risk

Most homeowners understand that a homeowners association can regulate paint colors, landscaping, parking and architectural changes.

Far fewer understand the financial power an HOA can have over the home itself.

You may own a multimillion-dollar property with substantial equity. Yet an unpaid HOA assessment can become a lien against that property—and, if the delinquency progresses far enough, that lien can ultimately become the basis for a foreclosure action.

The value of the home does not eliminate the HOA's enforcement rights.

That is why a recent Homes.com report caught my attention.

According to Homes.com News, 6,376 HOA and condominium “assessment foreclosure” filings were recorded nationally during the first quarter of 2026—28% more than during the same period a year earlier. That followed an 18% year-over-year increase in 2025, when 23,104 assessment foreclosure cases were filed.

Those numbers are interesting, but the number of foreclosures is not really what concerns me.

It is the amount of leverage an HOA can have over a homeowner.

A $50 Dispute Can Become a Very Expensive Problem

Miami attorney Erik Perez, who represents homeowners in disputes with community associations, told Homes.com that he has seen foreclosure proceedings involving debts as small as “$50, for $80.”

That example should not be interpreted as Arizona's current foreclosure threshold; HOA laws vary significantly by state.

But it illustrates an important point:

The original amount of the disagreement can be almost irrelevant compared with what happens next.

An unpaid assessment can lead to collection notices, late charges, attorneys, court filings and eventually a fight over a lien against the property.

And once attorneys become involved, a dispute that may have begun over a relatively insignificant amount can become anything but insignificant.

Homes.com reported that homeowners challenging these cases may watch the amount claimed continue to increase as legal fees, collection expenses, interest and other charges accumulate. Perez described assessment foreclosure cases as particularly difficult for homeowners to fight and said he has seen people ultimately lose their homes because they could no longer afford to continue defending the case.

That is the part homeowners should pay attention to.

Arizona Gives an HOA Significant Power—But There Are Limits

Arizona law provides an important example of both the power of an HOA and the protections legislators have been putting in place for homeowners.

Under Arizona law, an association has a common expense lien against a property for an assessment from the time the assessment becomes due.

In other words, this is more than an unpaid bill.

It potentially affects the property itself.

However, Arizona does not currently allow a planned-community HOA to immediately foreclose over a $50 unpaid assessment.

As of August 2026, a planned-community association may foreclose its assessment lien only after the owner remains delinquent for 18 months or reaches $10,000 in unpaid assessments, whichever occurs first.

The association also must make reasonable efforts to communicate with the homeowner and offer a reasonable payment plan before filing a foreclosure action. Arizona law additionally requires prescribed notice before an account is turned over to an attorney or outside collection agency.

There is another important change coming.

Effective September 12, 2026, Arizona's newer law extends essentially the same $10,000/18-month protection to condominium associations. Until then, condominiums remain subject to the prior threshold of one year or $1,200. The new legislation also contains a special rule for large special assessments.

The Arizona Legislature has therefore been strengthening homeowner protections.

But it has not eliminated the underlying power of the association lien.

Not Every HOA Fine Is the Same as an Assessment

This distinction is also important.

Arizona law treats assessments differently from many other HOA charges or penalties.

A violation fine for something such as landscaping, parking or an architectural dispute does not automatically carry precisely the same foreclosure rights as an unpaid common assessment.

That is another reason homeowners should ask for a complete accounting when an HOA claims money is owed: What is the charge? Is it an assessment, a fine, a late charge, a collection expense or an attorney fee?

Those distinctions matter.

The Real Danger Is Allowing a Small Dispute to Grow

In my view, one of the biggest mistakes a homeowner can make is ignoring an HOA letter because the amount seems trivial—or because the homeowner is convinced the association is wrong.

Being right about a $100 disagreement does not necessarily make spending thousands of dollars proving it a victory.

And ignoring the correspondence can be considerably worse.

If you believe an assessment is incorrect, ask for the association's accounting and documentation immediately. Keep copies of payments and correspondence. Make certain the association has your correct mailing address, particularly if the home is a second residence.

If a lien, attorney demand or foreclosure notice arrives, that is the time to obtain qualified legal advice—not months later.

HOA Due Diligence Should Begin Before You Buy

For buyers, especially those purchasing luxury property, an HOA deserves considerably more attention than simply asking:

“How much are the monthly dues?”

Before purchasing, I want my clients to understand what they are joining.

That means reviewing the CC&Rs and rules, but also looking at assessments, reserve funding, pending special assessments, litigation, capital projects and the financial condition of the association.

A beautiful community with meticulously maintained landscaping and substantial amenities requires money to operate. Associations have a legitimate responsibility to collect assessments because every homeowner ultimately shares those expenses.

But homeowners should understand the other side of that equation:

An HOA is not simply a neighborhood committee. It is a legal entity with enforceable rights against your property.

That remains true whether the home is worth $400,000 or $10 million.

The lesson from the recent rise in HOA foreclosure filings is therefore not that homeowners should fear their HOA.

It is that they should never underestimate it.

A small assessment deserves attention because the balance may be small.

The lien behind it is not.

This article is provided for general real estate information and is not legal advice. HOA and condominium laws vary by state and circumstance. Property owners facing a lien, collection action or threatened foreclosure should consult qualified legal counsel.

Sources: Homes.com News, “HOA foreclosures are rising. Why they're so difficult for homeowners to stop,” August 7, 2026; Arizona Revised Statutes §§33-1807 and 33-1256; Arizona Laws 2026, Chapter 162.