Can a Vermont HOA Foreclose Over Unpaid Dues?

The threat of losing a home over unpaid HOA dues is the kind of thing that keeps people up at night. In Vermont, an association does have a lien for unpaid assessments — but the Vermont Common Interest Ownership Act (VCIOA), Title 27A, channels how that lien is enforced, pointing to Vermont's mortgage-foreclosure chapter. This is general information, not legal advice — for how it applies to your specific situation, a licensed Vermont attorney is the right resource.

Can a Vermont HOA put a lien on my home?

Yes. Under 27A V.S.A. § 3-116, part of the Vermont Common Interest Ownership Act (Title 27A), unpaid sums owed to the association can attach to the unit as a lien. A lien alone is not a foreclosure, though; the pressing question for a worried homeowner is how that lien can actually reach the home.

Does a Vermont HOA need a court order to foreclose?

Generally, yes, for a home owned by an individual. Under 27A V.S.A. § 3-116(j), the lien may be foreclosed under 12 V.S.A. chapter 172, which provides for strict foreclosure or judicial sale in the Superior Court. The chapter's nonjudicial power of sale excludes a "dwelling house owned by a natural person" (§ 4961). Entity-owned units raise separate questions.

VCIOA ties enforcement to an existing statutory process. The statute provides that the association's lien:

"may be foreclosed pursuant to 12 V.S.A. chapter 172" — 27A V.S.A. § 3-116(j)

Title 12, chapter 172 is Vermont's mortgage-foreclosure chapter ("Foreclosure of Mortgages"). It provides for foreclosure in court, by strict foreclosure (subchapter 2) or judicial sale (subchapter 3), and those actions "shall be brought in the Civil Division of the Superior Court" (12 V.S.A. § 4932(a)). The chapter also contains a nonjudicial power-of-sale process for mortgages (subchapter 4), but that process excludes "farmland or a dwelling house owned by a natural person" (§ 4961), and a "dwelling house" includes a one-to-four-unit residential structure or an individual condominium unit "used or intended to be used as a residence" (§ 4931(2)). VCIOA itself speaks of "an action by an association ... to foreclose a lien," in which "the court may appoint a receiver" (27A V.S.A. § 3-116(l)). So for a home owned by an individual, foreclosure generally means a court proceeding, with notice and a forum where a homeowner can raise defenses, dispute the accounting, or point to procedural defects. The chapter is written in mortgage terms, and how it applies to an association lien on a particular unit, including one owned by an LLC or other entity, is a question for a licensed Vermont attorney.

Does a Vermont HOA lien outrank my first mortgage?

Only in part. Under 27A V.S.A. § 3-116, a first mortgage recorded before the assessment became delinquent generally outranks the association's lien, but Vermont gives the association a six-month super-priority ahead of it: the lien is prior for the common expense assessments that would have become due, absent acceleration, in the six months before an action to enforce it.

Section 3-116 also addresses where the association's lien stands relative to other claims on the property. The lien is generally prior to other liens and encumbrances, with important exceptions — notably liens recorded before the declaration and a first mortgage recorded before the assessment became delinquent.

But Vermont, as a true Uniform Common Interest Ownership Act state, gives the association a narrow slice of priority even ahead of that first mortgage. The lien is prior to a first security interest "to the extent of the common expense assessments ... that would have become due in the absence of acceleration during the six months immediately preceding institution of an action to enforce the lien." This six-month "super-priority" is the portion of the association's claim a first mortgage lender cannot simply leapfrog — a detail that matters in how a foreclosure is paid out, and one that is squarely attorney territory in any specific case.

How far behind before a Vermont HOA can foreclose?

At least three months of common expense assessments, where 27A V.S.A. § 3-116(m) applies. The owner must also have failed to accept or comply with a payment plan the association offered, and the executive board must vote to foreclose on that specific unit. Separately, the lien is extinguished unless enforcement begins within three years after the full amount becomes due.

Beyond pointing to chapter 172, § 3-116 sets concrete conditions an association must satisfy before it may even start a foreclosure. The statute provides that an association "may not commence an action to foreclose a lien on a unit unless":

• the owner, when the action is commenced, "owes a sum equal to at least three months of common expense assessments" and has "failed to accept or comply with a payment plan offered by the association"; and
• "the executive board votes to commence a foreclosure action specifically against that unit."

In plain terms: a single missed payment is not enough, the association must have offered a payment plan the owner turned down or broke, and the board has to vote to foreclose on that specific unit — a general "authorize foreclosures" policy does not satisfy it. Separately, the statute extinguishes the lien itself "unless proceedings to enforce the lien are instituted within three years after the full amount of the assessment becomes due," so stale claims fall away.

The payment-plan and board-vote conditions are in § 3-116(m), which was added by 2009, No. 155 (Adj. Sess.), effective January 1, 2012. Section 1-201(a) provides that "Amendments to this title apply to all common interest communities that contain 12 or more units that may be used for residential purposes and are created after January 1, 2011, or are subject to this title by amendment of their declaration," so for a community created on or before January 1, 2011, whether these conditions apply can be a question worth putting to an attorney.

Why the distinction matters

For a homeowner reading this, the practical points are:

• A lien is not the same as losing the home — it has to be foreclosed under 12 V.S.A. chapter 172 to reach the property, and for a home owned by an individual that generally means a court proceeding.
• In a court foreclosure under chapter 172, the proceeding is "before the Superior judge alone" (12 V.S.A. § 4932(d)), and defenses and accounting disputes can be raised there.
• Where § 3-116(m) applies, foreclosure cannot begin unless the owner is at least three months behind, has declined or broken a payment plan, and the board has voted to foreclose that specific unit.
• The amounts, interest, and fees the association adds are governed by the statute and the declaration, and are reviewable.

What homeowners commonly do

People facing collection often request a full ledger of what is owed and how it was calculated; a records request under § 3-118 can reach those documents. For anything approaching actual foreclosure, the timeline and available defenses are something a licensed Vermont attorney should review promptly.

Sources

• 27A V.S.A. § 3-116 — Lien for sums due the association; enforcement
• 12 V.S.A. Chapter 172 — Foreclosure of mortgages
• 12 V.S.A. § 4961 — Power of nonjudicial sale
• 27A V.S.A. § 1-201 — New common interest communities