HOA Foreclosures in Texas
HOA Foreclosures in Texas
Information, not legal advice. Laws change; check the current statute or rule and talk to a Texas attorney before you act.
A homeowners' association in Texas can foreclose on a house for unpaid assessments. That surprises many people, because Texas guards homesteads closely. The Supreme Court of Texas held in 1987 that homestead protection does not block foreclosure of an HOA assessment lien created by covenants recorded before the owner bought and made the house a homestead (Inwood North Homeowners' Ass'n v. Harris, 736 S.W.2d 632). The Legislature has since added layers of protection for owners. The result is a slow, paper-heavy process that leaves a clear trail of records.
For investors, an HOA collection or foreclosure case points to an owner under stress. Often the mortgage is current and only the HOA dues are behind. That combination can mean real equity.
Which law applies
- Subdivisions with a mandatory HOA: Property Code chapter 209, the Texas Residential Property Owners Protection Act. It applies to residential subdivisions where the declaration allows the association to collect assessments and membership is mandatory (§209.003).
- Condominiums: Property Code chapter 82, the Uniform Condominium Act. Chapter 209 does not apply to condos (§209.003(d)). A condo association's lien carries a statutory power of sale. Unless the declaration says otherwise, it is exercised under the ordinary first-Tuesday procedure of §51.002, and the association may foreclose judicially or non-judicially. It may not foreclose a lien that consists only of fines (§82.113(d), (e)).
The rest of this article covers chapter 209 subdivisions.
The steps before an HOA can foreclose
| Step | Rule | Statute |
|---|---|---|
| Payment plan | An association with more than 14 lots must adopt guidelines for a payment plan. The minimum term is 3 months. It does not have to offer more than 18 months, or a plan to an owner who defaulted on one in the past two years, or more than one plan in 12 months. | §209.0062 |
| Pre-collection notice | Before the owner can be charged a collection agent's fees, the association must send a certified-mail notice listing the amounts owed, describing payment-plan options, and giving at least 45 days to cure. | §209.0064(b) |
| No foreclosure for fines alone | An HOA may not foreclose if the debt is made up only of fines, attorney's fees tied only to fines, or certain amounts added under §209.005(i) or §209.0057(b-4). | §209.009 |
| Notice to the mortgage lender | Before filing to foreclose, the HOA must send notice of the delinquency by certified mail to any junior lienholder with a recorded deed of trust and give it until the 61st day to cure. | §209.0091 |
| Court order | The HOA must get a court order, either through the expedited Rule 736 process or through a regular lawsuit and judgment. The owner can waive the expedited process in writing at the time foreclosure is sought, but a waiver can't be made a condition of buying the house. | §209.0092 |
Because of the court-order requirement, a chapter 209 HOA foreclosure almost always shows up first as a court filing, not as a notice of sale. After the order, the sale is posted and held like other first-Tuesday sales, or a constable sells the property under a judgment.
After the sale: the 180-day redemption right
This is the biggest difference from a mortgage foreclosure. A Texas mortgage foreclosure has no redemption right. An HOA foreclosure does.
- Notice. Within 30 days after the sale, the association must send the former owner and each lienholder of record a certified-mail notice of the sale date and time and of the right to redeem. Within 30 days after sending it, the association must record an affidavit saying when the notice was sent (§209.010).
- Window. The owner or a lienholder of record may redeem until the 180th day after the association mails that notice. A lienholder may not redeem before the 90th day, and only if the owner has not already redeemed (§209.011(b)).
- No resale during the window. The buyer at the sale may not transfer the property to anyone except a redeeming owner during the redemption period (§209.011(c)).
- Possession. A buyer of occupied property must file an eviction (forcible entry and detainer) suit to get possession (§209.011(a)).
- Price to redeem. It varies with who bought. If the association bought, the owner pays everything owed at the time of sale, interest at the declaration's rate or 10 percent a year, foreclosure costs and reasonable attorney's fees, later assessments, the association's reasonable costs such as mortgage payments and repairs, and the purchase price less amounts already satisfied. A third-party buyer is repaid on a similar formula (§209.011(d), (e)).
What this means for a bidder: buying at an HOA sale ties up money for at least six months with no right to resell, and the deal can be undone. An HOA sale is also usually subject to the first mortgage, because most declarations make the HOA lien junior to a first-lien deed of trust. Your bid buys the owner's equity, not a free-and-clear house.
Where to look for the signal
- District or county court filings: the HOA's Rule 736 application or lawsuit. The style usually names the association against the owner.
- Notices of sale after the order, posted and filed with the county clerk like a mortgage sale.
- Recorded affidavits of post-sale notice (§209.010(c)), which start the redemption clock.
- Tax rolls: HOA trouble often travels with property tax delinquency. One stack worth watching is tax delinquency plus an HOA suit on an owner-occupied home.
Talking to owners
An owner behind on HOA dues may not know that a payment plan is available, or that the HOA cannot foreclose over fines alone. An investor who explains the options honestly builds trust. Being honest also guards against claims of unfair dealing. Don't present yourself as working for the association or its law firm.
How this shows up in Agentix Data
In the Kaufman and Rockwall foreclosure-sale postings we read, HOA lien sales are labeled separately from mortgage sales so you can treat the redemption window differently. HOA lawsuits and expedited applications filed in Harris County district courts show up among the civil and pre-foreclosure suit filings, depending on how the clerk codes them. Matching tax delinquency for the same parcel is available in the counties where we carry tax rolls. We don't carry recorded HOA lien notices or redemption affidavits.
Sources
- Texas Property Code ch. 209 (§§209.003, 209.0062, 209.0064, 209.009, 209.0091, 209.0092, 209.010, 209.011): https://statutes.capitol.texas.gov/Docs/PR/htm/PR.209.htm (mirror: https://tcss.legis.texas.gov/resources/PR/htm/PR.209.htm)
- Texas Property Code §82.113 (condominium assessment lien): https://statutes.capitol.texas.gov/Docs/PR/htm/PR.82.htm
- Texas Property Code §51.002 (first-Tuesday sale procedure): https://texas.public.law/statutes/tex._prop._code_section_51.002
- Texas Rules of Civil Procedure 735-736 (expedited foreclosure, including property owners' association liens): https://www.stcl.edu/lib/TexasRulesProject/TRCP735-755/rule736.12012.htm
- Inwood North Homeowners' Ass'n v. Harris, 736 S.W.2d 632 (Tex. 1987): https://www.casemine.com/commentary/us/foreclosure-rights-of-homeowners'-associations-over-homestead-protections-in-texas/view (case summary); Texas Attorney General Opinion GA-0279 discusses it: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2004/ga0279.pdf
General information, not legal or financial advice.