Texas Ct Says HOA Has Right to Foreclose Its Lien on the Homes of Delinquent Owners

Texas Appellate Court decision (May 14, 2015).

In this case, a homeowners association (“Association”) filed suit against a homeowner seeking to recover unpaid assessments and attorney’s fees. The action filed by the Association also sought a judgment for the foreclosure of its lien on the homeowner’s property along with an order directing that the property be sold to satisfy the judgment pursuant to rights granted to the Association under the Association’s governing documents. The trial court granted the Association a summary judgment that awarded the Association $5,911 in unpaid assessments together with interest and attorney’s fees. The trial court judgment did not include an order of foreclosure of the Association’s lien or an order directing the sale of the property. The Association appealed the trial court decision, contending that it was also entitled to orders allowing the foreclosure of its lien and a sale of the subject property.

The appellate court reversed the portion of the trial court’s decision that did not allow for the foreclosure of the Association’s lien and a sale of the homeowner’s property. The appellate court stated that the remedy of foreclosure is an inherent characteristic of the rights granted to homeowners associations when there are governing documents granting a contractual lien on the interests of delinquent homeowners and a trial court may not refuse to enforce an association’s right to foreclose when the association has demonstrated its entitlement to judgment as a matter of law.

See case decision:Gateway_Estates_Homeowners_A