What Happens If My HOA Forecloses on My House in Indiana?
Most homeowners are surprised to learn that their homeowners association can foreclose on their property for unpaid dues and assessments — even if their mortgage is current. HOA foreclosure in Indiana is a real and serious risk. Understanding how it works, what your rights are, and how to stop it gives you the information you need to protect your home.
Call (317) 495-3440 — Free ConsultationCan an HOA Really Foreclose in Indiana?
Yes. Under Indiana's Homeowners Association Act (IC 32-25.5) and the Indiana Nonprofit Corporation Act, HOAs have the authority to place liens on properties for unpaid assessments and, in some cases, to foreclose on those liens. The HOA's authority to foreclose is typically spelled out in the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) that you agreed to when you purchased the property. HOA foreclosure is separate from mortgage foreclosure — your mortgage can be current while your HOA forecloses.
How HOA Foreclosure Works in Indiana
HOA foreclosure in Indiana follows the same judicial process as mortgage foreclosure. The HOA must file a complaint in the circuit or superior court, serve you with the complaint, obtain a judgment, and then conduct a sheriff sale. Before filing, the HOA must typically follow its own internal collection procedures — sending notices, imposing late fees, and providing an opportunity to cure. The entire process from first missed assessment to sheriff sale can take 12–24 months.
The HOA Lien and Its Priority
When you fail to pay HOA assessments, the HOA records a lien against your property. HOA liens are generally junior to mortgage liens — meaning the mortgage lender is paid first from the sale proceeds. However, some HOA declarations provide for a 'super lien' that has priority over the mortgage for a limited number of months of assessments. Indiana does not have a statutory super lien for HOAs, but the CC&Rs may create one. Review your CC&Rs carefully.
What Happens to Your Mortgage During HOA Foreclosure
If the HOA forecloses and the property is sold at sheriff sale, the mortgage lender's lien survives the HOA foreclosure sale (because the mortgage lien has priority). The buyer at the HOA foreclosure sale takes the property subject to the mortgage. This means HOA foreclosure sales often produce low bids — buyers are taking on the mortgage obligation. Your mortgage lender will likely accelerate the loan and begin their own foreclosure if the HOA forecloses.
Stopping HOA Foreclosure: Your Options
You can stop HOA foreclosure by: (1) paying the delinquent assessments, late fees, and attorney fees in full; (2) negotiating a payment plan with the HOA; (3) selling the property before the sheriff sale — proceeds pay off both the HOA lien and the mortgage at closing; (4) filing for bankruptcy to trigger an automatic stay. Bartolini Cash Buyers can evaluate your property and make a cash offer that allows you to pay off the HOA lien and mortgage at closing.
Indiana Legal References
The following Indiana statutes are referenced on this page. Links go directly to the Indiana General Assembly website.
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