Article I: The Right to Security Against Foreclosure

An association shall not foreclose against a homeowner except for significant unpaid assessments, and any such foreclosure shall require judicial review to ensure fairness.

The Ultimate Power of Article I

The first thing that this does is place a limit on the power they have to create foreclosure. The association cannot foreclose on a homeowner with express authority granted by the declaration. This foreclosure power cannot be added by any amendment except if it is dictated by a unanimous vote by the homeowners.

The association cannot foreclose against a homeowner unless it complies with all the laws set forth and the association also obtains a court order that specifics three different things. First it must by specific on the assessment that is due, it must also state that the association followed the proper procedure and it allows three months for the homeowner to pay the debt.

In judicial foreclosure the association may not seek a foreclosure order unless they are in compliance with all the laws set and out and the following three aspects are in play. The first is that the lien secured a debt for an assessment that is authorized by a declaration that was recorded before the home was purchased. The second is that the directors approve the foreclosure by a two-thirds vote. Finally the assessment that is past due on the day of the vote is over $2,500.

The Handling of Debt

The homeowners have a right to cure debt. This means that homeowners can make a full or partial payment at any time towards the amount due. The payment made will always go towards the amount needed to avoid foreclosure. Any homeowner who has a job loss, disability, medical expenses, or divorce shall be allowed 30 days, without penalty, to come up with a payment plan. When the proposal is in the directors will form a committee to meet with the homeowner. If the request is denied then the homeowner will have 15 days after to pay without occurring any fees. If the directors seek to foreclose then the homeowner will be alerted within 5 days which include the Notice of Foreclosure Rights. Even if the homeowner then pays the fees the foreclosure may still got through if the homeowner has still not paid attorney fees and the declaration authorizes this foreclosure to make up for nonpayment.

Association Issues

If the association forecloses, and then puts the home up for sale, the price must be below 75% of the equity appraised at fair market value. Within 30 days upon completion of the sale, the association will provide the buyer with the homeowners notice. Within 10 days of sending out this notice the association will then record the property in the county records.

This article stresses that the association wants to help out the homeowners as best as possible. This is why they allow them to come up with some sort of payment plan in order to try and allow them to retain the property. The association does not overreach their power, which is evident by the need for votes to foreclose. An installment plan can go great lengths to actual save a home that could possibly be foreclosed.