Article – Nonpayment of Dues

Nonpayment of HOA Dues is Not the Answer to a Mismanaged Association

Homeowner’s associations (HOAs) play a crucial role in maintaining shared community spaces, enforcing rules, and managing financial matters. However, when an HOA fails to meet its obligations—such as neglecting maintenance or withholding financial reports—homeowners may feel frustrated and wonder if they have the right to withhold their dues.

The short answer is no—a homeowner’s obligation to pay HOA dues is independent of the association’s duty to fulfill its responsibilities. Here’s what you need to know about your financial obligations and the potential consequences of non-payment.

Owner’s Legal Obligation to Pay HOA Dues

When a person purchases a home or a condominium in an HOA-governed community, you enter into a legally binding agreement to pay association dues as outlined in the HOA’s governing documents, including the Covenants, Conditions, and Restrictions (CC&Rs) and bylaws. These dues are essential for maintaining community amenities, funding repairs, and covering operating expenses.

Even if the HOA is failing in its responsibilities—such as neglecting maintenance, failing to provide financial transparency, or violating its own rules, homeowners are still legally required to pay their dues. Withholding payments in protest can lead to serious financial and legal repercussions.

Consequences of Withholding HOA Dues

Refusing to pay HOA dues, even when the association is not performing its duties, can result in significant consequences for homeowners, including:

1. Late Fees and Interest – HOAs often impose penalties for late or missed payments, increasing the overall debt.
2. Fines and Legal Action – The HOA may issue fines, pursue legal action, or send unpaid dues to a collection’s agency, impacting your credit score.
3. Liens on Your Property – If dues remain unpaid, the HOA can place a lien on your home, which must be satisfied before selling or refinancing the property.
4. Foreclosure Risk – In extreme cases, an HOA can initiate foreclosure proceedings to recover unpaid dues, even if the outstanding balance is relatively small.
5. Loss of Community Privileges – Many HOAs have rules allowing them to suspend homeowners’ access to amenities like pools, clubhouses, or voting rights if dues are delinquent.

What Homeowners Can Do Instead of Withholding Dues

If an HOA is failing in its responsibilities, there are constructive steps an owner can take to address the issues:

1. Review the HOA’s Governing Documents – Understand the specific obligations the HOA has and verify whether they are in violation.
2. Submit a Formal Complaint – Document concerns and submit them in writing to the board of directors or property management company.
3. Attend HOA Meetings – Raise concerns at board meetings to push for accountability and transparency.
4. Request Financial Audits – Many state laws allow homeowners to demand an audit of HOA finances if there are concerns about mismanagement.
5. Seek Mediation or Legal Action – If the HOA remains unresponsive, mediation or legal action may be an option.
6. Elect New Board Members – If the HOA is being mismanaged, consider running for a position on the board or supporting candidates committed to enforcing the rules fairly.

Conclusion

While it may seem tempting to withhold dues when an HOA is not fulfilling its obligations, doing so can lead to severe financial and legal consequences for homeowners. Instead, it is important to pursue proper channels to address grievances while remaining compliant with homeowner financial responsibilities. Understanding an owner’s rights and taking proactive steps can help ensure that an HOA is held accountable without putting an owner’s home and financial security at risk.

Legal Ruling: Poor HOA Management Doesn’t Excuse Dues Obligations

Homeowners’ associations (HOAs) often spark controversy, especially when homeowners feel the HOA isn’t living up to its responsibilities—like holding annual meetings, electing directors, or maintaining common areas. But as the Indiana Court of Appeals made clear in Sandoval v. Willow Lake Estates Homeowners Association, frustrations with an HOA’s management don’t excuse homeowners from paying their dues and assessments.

In this case, a homeowner (“Owner”) refused to ay periodic assessments imposed by his homeowner’s association (“Association”), because of his displeasure with the Association’s management in not holding annual meetings, failing to elect new directors, failing to prepare annual budgets and failing to properly maintain common areas. The Association responded by filing liens on Owner’s property and seeking to foreclose on the property. The trial court granted summary judgment in favor of the Association and Owner appealed.

The appellate court rejected Owner’s argument that the Association’s procedural failures invalidated the assessments that the Association levied on Owner’s property. The Court held that the Association’s failures to comply with its duties under the law and governing documents did not excuse Owner from paying the assessments he was responsible for because: (i) the Association’s governing documents did not make the Association’s obligations conditions precedent to imposing assessments; (ii) Indiana law does not allow homeowners to withhold dues in protest of an association’s failure to perform its duties; and (iii) homeowners have alternative remedies for addressing the Association’s breaches of its obligations. Accordingly, the appellate court affirmed the trial court’s judgment in favor of the Association.

The takeaway for owners is to understand that when you buy a property in a subdivision governed by a homeowner’s association, you agree to abide by its rules, including paying regular assessments. These financial obligations are typically enforceable by liens and foreclosure if unpaid. Thus, even if your homeowner’s association isn’t functioning properly, courts won’t reward self-help tactics like withholding dues. You must keep paying and pursue other remedies separately. If your homeowners association fails to comply with its duties you can take various actions, including but not limited to: (i) filing a petition to compel meetings or elections; (ii) requesting inspection of financial records; and (iii) bringing an action for breach of fiduciary duty– but such actions must be done through appropriate legal channels—not by refusing to pay assessments.

This case serves as a critical reminder: even when an HOA falls short of its duties, homeowners must stay current on their financial obligations and pursue other remedies through proper legal channels.

Indiana Appellate Court decision (March 12, 2025).

See case decision:Sandoval_v._Willow_Lake_Estates_Home_Owners_Assn

Owner’s Refusal to Pay $280 in Assessments Results in $28,000+ Judgment Against Him

Case Summary

This case involved a legal battle between a homeowner and his Homeowners Association (HOA) over unpaid HOA assessments and the HOA’s authority to collect attorney fees. Homeowner disputed the HOA’s ability to levy fees against him and challenged a lien placed on his property for unpaid dues. However, after contentious litigation and multiple judicial recusals, the Court of Appeals ultimately upheld the HOA’s right to recover legal costs, leaving homeowner responsible for $28,372.06 in attorney fees.

Background & Dispute

• Homeowner purchased his home in 2014, subject to the Declaration of Covenants, Conditions, and Restrictions (CCRs) of the Brunswick Forest HOA.
• Under the CCRs, homeowners were required to pay annual assessments, which Homeowner refused to pay in 2015 and 2016.
• The HOA sent multiple notices informing him of his delinquency, requesting $280 in unpaid assessments plus $100 in attorney fees.
• When Homeowner still refused to pay, the HOA filed a lien on his property and warned him of further action if he did not settle the balance.

Homeowner responded by suing the HOA in 2016, arguing that:

• The HOA failed to properly calculate the assessments as required by its governing documents.
• The lien on his property was invalid and should be removed.
• The HOA committed breach of fiduciary duty and intentional harm by attempting to collect the disputed assessments.

The HOA counterclaimed against Homeowner for breach of contract, asserting that his refusal to pay assessments violated the CCRs and that it was entitled to attorney fees for enforcing the rules.

Litigation & Trial Court Decision

The case quickly became highly contentious:

• The first trial judge recused himself due to a conflict of interest.
• The second judge also recused himself after Homeowner accused him of bias and harassment.
• Parker initially represented himself (pro se), filing numerous motions, which the HOA argued prolonged and complicated the case.

At trial, Homeowner admitted he had purchased his home subject to the HOA’s governing rules but maintained that the assessments were improperly levied. The HOA, however, provided evidence that the fees were set based on historical financial data and in compliance with the CCRs.

The trial court ultimately ruled in favor of the HOA, finding that:

• The assessments and lien were valid, and Homeowner failed to prove any wrongdoing by the HOA.
• The lawsuit was initiated primarily to avoid paying assessments, rather than due to legitimate claims.
• The HOA had to defend against Homeowner’s legal challenges, incurring significant legal fees in the process.

Attorney Fees Dispute & Appeal

Following the trial, the HOA sought attorney fees, citing provisions in the CCRs that allowed for collection of legal costs in enforcement actions. Homeowner objected, arguing that:

• The CCRs only allowed attorney fees for lawsuits initiated by the HOA—not for defending against homeowner-initiated claims.
• The majority of the HOA’s legal fees came from defending against his claims, rather than pursuing their counterclaim.
• He should only be responsible for $1,500 in legal fees, which he estimated covered the HOA’s costs in bringing the counterclaim.

The trial court rejected Homeowner’s arguments, ruling that:

• The HOA’s legal battle to collect assessments and defend itself was part of the same dispute, and therefore, attorney fees applied.
• Homeowner’s numerous filings prolonged the case, increasing the HOA’s legal expenses.
• The HOA was entitled to $28,372.06 in attorney fees, as they were incurred enforcing the assessments.

On appeal, Homeowner challenged the attorney fees, claiming the trial court misinterpreted the CCRs. However, the Tennessee Court of Appeals upheld the trial court’s decision, ruling that:

• The HOA’s authority to collect assessments inherently included legal costs, whether pursuing payment or defending against disputes related to collection.
• Attorney fees were reasonable given the circumstances and the extensive litigation involved.
• Homeowners who refuse to pay assessments risk significant legal costs, especially when challenging an HOA’s enforcement authority.

Key Takeaways

• Homeowners who refuse to pay HOA dues can face legal action—including liens and lawsuits.
• HOAs can recover attorney fees when enforcing assessments, even if the lawsuit was initiated by the homeowner.
• Legal disputes with HOAs can become costly, especially when litigation drags on.
• Challenging HOA rules without strong legal grounds can result in substantial financial penalties.

This case serves as a cautionary tale for homeowners looking to dispute HOA fees, emphasizing that litigating against an HOA over assessments can lead to far greater financial consequences than simply paying the fees owed.

See case decision: Parker_v._Brunswick_Forest_Homeowners_Ass’n