As a lawyer with a track record of taking-on homeowners associations in a variety of lawsuits and collection efforts, I am frequently asked whether Texas HOAs have the right to conduct private foreclosure sales on the courthouse steps.
The answer is "YES, but only after Court permission has been obtained, or the owner of the property being foreclosed agrees in writing (at the time the foreclosure is sought) to waive judicial process." However, this hasn't always been the case.
It wasn't until the Texas Legislature added Section 209.0092 to the Property Code in 2011 that property owners' associations were required to foreclose their assessment liens exclusively through judicial foreclosure.
Prior to enactment of this section, HOAs frequently foreclosed their liens by and through private sales that were conducted solely under the contractual authority granted to them under restrictive covenants ("CCRs"). These sales were sometimes conducted without sufficient notice to property owners or other lienholders. Abuses in non-judicial foreclosures conducted by HOAs and their attorneys led to widespread criticism, and ultimately to the adoption of Section 209.0092.
Despite the new requirement for Judicial Foreclosure of HOA Assessment Liens, there still exists an expedited timeline and somewhat complicated set of rules applicable to the process. Property owners who find themselves defending a foreclosure lawsuit filed by their HOA should promptly seek legal representation.
