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Right of Redemption following a HOA foreclosure and a Tax foreclosure

| Jun 9, 2021 | Real Estate |

Homeowners Association (HOA) or Condominium Owner’s Association (COA) are two organizations that are formed to enforce restrictive covenants within communities. Moving into a new neighborhood may require you to join either organizations. Organizations such as HOA and COA usually require fees and assessments or “assessment dues” from the community to maintain them. Sometimes homeowners can fall behind on payments causing them to become a delinquent in assessments for failing to pay monthly assessment dues and can lead to his/her home being foreclosed on. In some jurisdictions, the process begins with the HOA/COA sending letters in attempt to collect from the homeowner. If the written notices fail to collect from the homeowner, The HOA/COA may pursue legal action for a money judgement lien or file a lien on the property. Whenever a lien is filed on a property, the assessment lien will cloud the title of the property preventing the homeowner from refinancing or selling the home. Eventually, the property can be foreclosed on.

Texas law provides former homeowners with a right of redemption period after a HOA/COA foreclosure. A former homeowner may redeem the home within 180 days from the date that the HOA mails the foreclosure notice of redemption rights. If a COA forecloses then the former homeowner may redeem the home within 90 days after the date of the foreclosure sale.  Typically, the cost to redeem a property includes: (1) the amount of the winning bid; (2) fines; (3) fees; (4) and taxes.

Is your property being foreclosed through a tax lien? A property owner failing to pay his/her taxes can result in a tax lien foreclosure. When a property is foreclosed on because of failure to pay taxes, the owner of the property has a right of redemption which grants the original owner an opportunity to obtain the property again. The time frame to get the property back depends on if the property is a residential homestead or if it is not. If it is a residential property, then the owner has 2 years to redeem the property and if the property is commercial then the owner has 6 months to redeem. If the property is redeemed within the first year an additional 25 percent of the total redemption amount is also required. If the home is redeemed in the second year, then the additional percentage is raised to 50 percent of the total. A way you can avoid a property tax lien in the future is to request for a tax abatement, these programs allow property owners significant savings.

Do you want to redeem your property? Your options may become complicated the longer you wait. If you have any questions regarding the right of redemption or want to redeem, give us a call so that you can speak to an experienced real estate attorney. Our number is 713-572-4900.

 

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