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, and it runs through the courts. This is general information, not legal advice — for how it applies to your specific situation, a licensed Vermont attorney is the right resource.

The assessment lien

Unpaid sums owed to the association can attach to the unit as a lien under § 3-116. The pressing question for a worried homeowner is how that lien can actually reach the home.

Foreclosure goes through the courts

VCIOA does not let the association seize or privately sell the home. The statute provides that the lien:

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

Title 12, chapter 172 is Vermont's judicial foreclosure process — the same statutory framework used to foreclose mortgages. That means a court proceeding, with notice and an opportunity to be heard, rather than a quiet administrative sale. It also means a forum where a homeowner can raise defenses, dispute the accounting, or point to procedural defects.

The lien's priority — and Vermont's six-month super-priority

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.

VCIOA's built-in brakes on foreclosure

Beyond requiring a court process, § 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 take a recorded vote aimed at 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.

Why the distinction matters

For a homeowner reading this, the practical points are:

• A lien is not the same as losing the home — it generally has to be foreclosed through court to reach the property.
• Because foreclosure runs through 12 V.S.A. chapter 172, there is a court proceeding where defenses and accounting disputes can be raised.
• Foreclosure cannot begin at all 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