Can an Indiana HOA Foreclose Over Dues?

Indiana puts HOA assessment liens and foreclosure in their own chapter, separate from the Homeowners Associations Act. Knowing how that chapter works is what separates a manageable problem from a crisis. For your specific situation, a licensed Indiana attorney is the right resource. This is general information, not legal advice.

The lien framework: IC 32-28-14

The Indiana Homeowners Association Lien Act governs the lien process. Under IC 32-28-14, an HOA's lien "attaches to real estate upon the recording of a notice of lien by the homeowners association in the office of the recorder of the county in which the real estate is located." Recording is the lien-creating event — not merely sending a demand letter.

The HOA's authority to lien generally has to be grounded in the recorded CC&Rs. The CC&Rs are what give the association the contractual right to charge assessments and to secure them with a lien; IC 32-28-14 provides the procedural framework for recording and enforcing that lien.

The 90-day waiting period

Indiana attaches a real homeowner-facing protection: the HOA must wait at least 90 days before initiating foreclosure on the lien. That window gives the owner an opportunity to:

• Verify what is actually owed
• Pay or set up a payment plan
• Contest a disputed amount (especially fines that may not properly belong in the assessment account)
• Obtain counsel before litigation begins

Judicial foreclosure — no power-of-sale shortcut

Indiana is a judicial foreclosure state for HOA liens. The act provides that the HOA "may enforce a homeowners association lien by filing a complaint in the circuit or superior court of the county where the real estate that is the subject of the lien is located." If the court enters judgment for the HOA, "the court rendering judgment shall order a sale to be made of the real estate subject to the lien."

That matters because judicial foreclosure means:

• The owner is served with a complaint and has time to answer
• Disputed amounts and lien validity can be litigated before any sale
• The protections of Indiana's general foreclosure procedure apply

There is no non-judicial power-of-sale fast track for Indiana HOA liens. Every foreclosure runs through the courthouse.

A five-year deadline, and limits the chapter builds in

The same chapter sets two further limits worth knowing. First, the lien does not last forever. Under IC 32-28-14-8, the HOA's enforcement complaint "must be filed not later than five (5) years after the date the statement and notice of intention to hold a lien was recorded." A recorded HOA lien that is never foreclosed within that five-year window lapses by operation of the statute. Separately, under IC 32-28-14-9, an owner or other interested party (including a mortgagee) can give the lienholder written notice to foreclose; if the association then fails to file a foreclosure action within one year after receiving that notice, the lien "is void."

Second, the chapter is not a super-priority lien that survives a senior mortgage. Under IC 32-28-14-7, when "the mortgagee of a first mortgage of record or other purchaser of real estate obtains title to the real estate as a result of foreclosure of the first mortgage," that acquirer "and the acquirer's successors and assigns are not liable for the share of common expenses or assessments by the homeowners association chargeable to the real estate that became due before the acquisition of title." The unpaid pre-foreclosure share instead becomes a common expense spread among all the owners. In other words, an Indiana HOA lien is generally cut off by a first-mortgage foreclosure rather than jumping ahead of it — the opposite of the limited "super-lien" priority some other states give condominium associations.

What people generally do

In an Indiana assessment-debt situation, a few points commonly matter:

• A written payoff and the association's financial records show what is owed and how it was calculated.
• The 90-day window between the recorded notice and a foreclosure action is the period owners typically use to resolve the debt or arrange counsel.
• Disputed fines and undisputed assessments are treated differently, so they are often looked at separately.
• Whether the CC&Rs actually authorize the lien for the charges being claimed is worth confirming.
• A licensed Indiana attorney is the resource once a notice of lien is recorded — well before the 90 days run.

Sources

• IC 32-28-14 — Homeowners Association Liens
• IC 32-28-14-7 — Liability for unpaid assessment (first-mortgage cutoff)
• IC 32-28-14-8 — Time limit for enforcing lien (five years; lien void)
• IC 32-25.5-3-3 — Records and budget meeting