How Texas HOAs Foreclose Without Stepping Into a Courtroom

The $87,000 Mistake at the Bexar County Constable Sale

An investor purchased a single-family home at a Bexar County constable sale in early 2023 for $87,000. The property had been foreclosed by the first-lien mortgage holder through a standard nonjudicial deed of trust sale. The investor ran a title search through a commercial provider, confirmed the mortgage was being foreclosed, verified no federal tax liens appeared in the county records, and showed up at the sale confident.

Six weeks after closing, a letter arrived from a law firm representing the homeowners association. The HOA claimed a perfected assessment lien of $14,200 — covering three years of unpaid dues, late fees, interest at 18% per annum, attorney fees from two prior collection actions, and costs associated with the HOA's own aborted foreclosure attempt. The HOA demanded immediate payment and indicated it would proceed with its own nonjudicial foreclosure if the investor failed to respond within 30 days.

The investor assumed the mortgage foreclosure had wiped the HOA lien. It had not. In Texas, the relationship between HOA liens and mortgage foreclosures depends entirely on the language of the subdivision's dedicatory instruments, the timing of lien perfection, and the specific foreclosure mechanism used. The investor had purchased a property still encumbered by a valid, enforceable HOA lien — and the HOA had every legal right to foreclose again.

Texas Property Code Chapter 209: The Statutory Framework for HOA Power

The authority for Texas homeowners associations to assess liens and foreclose without judicial intervention flows from Chapter 209 of the Texas Property Code, titled "Texas Residential Property Owners Protection Act." This chapter governs property owners' associations in subdivisions where the association has the authority to collect regular or special assessments on residential property.

Under Texas Property Code § 209.0091, a property owners' association has a lien on an owner's property for assessments, charges, and other amounts authorized by the dedicatory instruments. This lien arises automatically upon the recording of the dedicatory instruments — typically the declaration of covenants, conditions, and restrictions (CC&Rs) filed when the subdivision was platted. The lien does not require a separate recording for each assessment; rather, it exists as a continuing encumbrance that secures all present and future assessments.

The critical provision for foreclosure authority appears in Texas Property Code § 209.0092, which permits a property owners' association to foreclose its assessment lien through nonjudicial means if — and only if — the dedicatory instruments expressly grant the association a power of sale. This is not a statutory default; the power must be affirmatively stated in the recorded documents.

When the power of sale exists, the association may foreclose using the same procedures that apply to deeds of trust under Texas Property Code Chapter 51. This means the association can post the property for foreclosure at the county courthouse steps on the first Tuesday of the month, provide the required notices, and conduct a sale without ever filing a lawsuit or obtaining a court order.

The Notice Requirements That Create (or Destroy) Title Risk

Texas imposes specific pre-foreclosure notice requirements on HOAs that differ from those governing traditional deed of trust foreclosures. Under Texas Property Code § 209.0092(a-1), before an HOA may foreclose its lien through nonjudicial sale, the association must provide the property owner with:

1. A notice of default and intent to accelerate, giving the owner at least 30 days to cure the default
2. A notice of acceleration if the owner fails to cure
3. A notice of sale, provided at least 21 days before the scheduled foreclosure date

These notices must be sent by certified mail, return receipt requested, to the owner's last known address. The association must also file the notice of sale with the county clerk and post it at the courthouse door.

Here is where title risk compounds for auction investors: these notices are filed with the county clerk, but they are not always indexed in a manner that appears in standard title searches. The notice of sale creates a public record, but many title search protocols focus on recorded instruments that transfer or encumber title — deeds, deeds of trust, liens, judgments. A notice of foreclosure sale is a procedural filing, and it may be indexed separately from the chain of title.

Moreover, the underlying assessment lien often does not appear as a separately recorded document. Because the lien arises by operation of the dedicatory instruments themselves, there may be no "HOA lien" document recorded against the specific property. An investor searching for liens in the grantor-grantee index will find the original mortgage, perhaps a subordinate lien, maybe a mechanic's lien or judgment — but the HOA's continuing lien exists in the dedicatory instruments, which were recorded years or decades earlier against the entire subdivision.

Priority Disputes: Why the Mortgage Foreclosure Did Not Eliminate the HOA Lien

The Bexar County investor's assumption — that the mortgage foreclosure wiped subordinate liens — reflects a common misunderstanding of how lien priority operates when HOAs are involved.

Under general Texas lien priority rules, liens rank according to the order in which they were perfected, unless a statute or contractual provision alters that priority. A first-lien mortgage recorded in 2015 would ordinarily have priority over an HOA assessment lien that arose in 2020. When the mortgage forecloses, subordinate liens are typically extinguished because the foreclosure sale conveys title free of interests junior to the foreclosing lien.

But HOA liens in Texas often do not follow this simple hierarchy for two reasons.

First, the HOA's lien may have been perfected before the mortgage. If the subdivision's declaration was recorded in 2005, the HOA's continuing lien attached to every lot in 2005. When a buyer purchased in 2015 and recorded a mortgage, that mortgage was subordinate to the already-existing HOA lien. The mortgage foreclosure cannot extinguish a lien that was senior to the mortgage itself.

Second, even where the mortgage has technical priority, the dedicatory instruments may contain subordination language that applies only to purchase-money mortgages or mortgages meeting certain criteria. Some declarations provide that the HOA lien is subordinate to "any first mortgage or deed of trust" securing institutional financing, but this subordination may not apply to refinances, home equity loans, or mortgages from non-institutional lenders. An investor buying at foreclosure must read the actual declaration to determine whether the subordination provision applies to the specific mortgage that was foreclosed.

In the Bexar County case, the declaration contained a subordination clause limited to "purchase-money mortgages from institutional lenders." The foreclosing lender was a credit union that had refinanced the original purchase-money loan. The HOA successfully argued that the refinance mortgage was not a "purchase-money mortgage" within the meaning of the subordination clause, meaning the HOA lien retained priority and survived the foreclosure sale.

The Nonjudicial Process: What Happens When the HOA Forecloses

When a Texas HOA proceeds with nonjudicial foreclosure, the process closely mirrors a deed of trust foreclosure under Property Code Chapter 51. The association, through its management company or attorney, will:

1. Send the required notices to the property owner at the address shown in association records and at the property address
2. File the notice of sale with the county clerk at least 21 days before the sale
3. Post the notice at the courthouse door
4. Conduct the sale on the first Tuesday of the month between 10:00 a.m. and 4:00 p.m. at the location designated by the county commissioners court

The association may bid at its own sale, and frequently does. If the HOA is the only bidder, it takes title to the property for the amount of its lien. The association then owns the property and may sell it on the open market, lease it, or hold it.

For investors who purchased at a prior mortgage foreclosure, this creates a nightmare scenario. They believed they purchased the property at a constable or trustee sale, only to discover that the HOA is now conducting its own foreclosure based on a lien that was never eliminated. The investor faces a choice: pay the full amount claimed by the HOA (assessments, interest, attorney fees, costs) or lose the property to the HOA's foreclosure sale.

Texas Property Code § 209.0092(d) provides a limited safeguard: the owner may cure the default and stop the foreclosure at any time before the sale by paying all amounts due plus foreclosure costs. But this right to cure requires the owner to pay amounts that may exceed the original assessments by 200% or 300% once fees and interest are included.

The Assessment Lien Amount: It Is Never What You Expect

Investors who discover an HOA lien post-purchase often underestimate what they will owe. The declaration typically authorizes the association to charge:

• Regular assessments (monthly or annual dues)
• Special assessments (for capital improvements or unexpected expenses)
• Late fees (often $25–$50 per month or a percentage of the overdue amount)
• Interest (many declarations allow 18% per annum or the maximum legal rate)
• Attorney fees and costs for collection actions
• Costs of certified mailings and foreclosure notices

An owner who stopped paying $150/month dues three years ago does not owe $5,400. They owe $5,400 in base assessments, plus 36 months of late fees at $25/month ($900), plus interest at 18% compounding ($2,400 or more), plus attorney fees from the demand letter ($500), plus attorney fees from filing the lien affidavit if required ($750), plus attorney fees for preparing foreclosure documents ($1,500–$3,000), plus filing and mailing costs ($200–$400). The total easily reaches $11,000–$14,000 on an original principal balance of $5,400.

This is how the Bexar County investor faced a $14,200 demand on a property where the unpaid dues totaled approximately $6,000.

Statutory Protections That Apply to Homeowners But Not Investors

Texas Property Code Chapter 209 contains several protections for property owners facing HOA foreclosure, including:

• The right to cure the default before sale (§ 209.0092(d))
• Restrictions on foreclosure for fines alone (§ 209.0092(a)(2) prohibits foreclosure solely for fines or attorney fees not related to a debt for assessments)
• Required payment plan offerings for certain delinquent assessments (§ 209.0064)
• Restrictions on the amount of attorney fees that can be assessed during early collection stages

These protections benefit the original homeowner who receives the notices and has an opportunity to cure. They provide minimal benefit to an investor who purchases at a mortgage foreclosure sale and inherits an existing delinquency.

The investor did not receive the pre-foreclosure notices because they were sent to the prior owner. The investor may not qualify for the payment plan provisions because they were not the owner when the delinquency arose. The investor's only practical option is to pay the full amount demanded or litigate the validity or amount of the lien — litigation that will cost more than the lien itself in most cases.

What TitlePin Would Have Shown

A TitlePin report on this Bexar County property would have flagged several critical items before the investor bid at the constable sale:

First, the report would have identified the subdivision's declaration of covenants, conditions, and restrictions, noting that the dedicatory instruments grant the HOA a power of sale. This alone signals that any unpaid assessments could result in a nonjudicial foreclosure independent of the mortgage foreclosure.

Second, TitlePin's municipal and association lien search would have identified any recorded lien affidavits or notices of assessment lien filed by the HOA. While not all Texas HOAs record separate lien documents — because the assessment lien arises automatically — many associations do file lien affidavits as a matter of practice or when they begin collection efforts. TitlePin's search protocol captures these filings even when they are not indexed in the standard chain of title.

Third, the report would have identified any pending foreclosure notices filed with the county clerk, indicating that the HOA had begun or was contemplating its own foreclosure action.

Fourth, TitlePin's analysis would have noted the specific subordination language in the declaration, alerting the investor that the HOA lien subordination applied only to purchase-money mortgages and that a refinance mortgage might not qualify.

With this information, the investor could have contacted the HOA before the auction, obtained a payoff statement, and factored the $14,200 lien into the bid price. Alternatively, the investor could have passed on this property entirely and bid on a different parcel with cleaner title.

The Dedicated Investor's Due Diligence Checklist for Texas HOA Properties

For any Texas property located in a subdivision, planned community, or condominium where an HOA exists, investors should complete the following before bidding at foreclosure:

1. Obtain and read the declaration of covenants, conditions, and restrictions in full. Confirm whether the HOA has a power of sale. Confirm the subordination language and determine whether it applies to the mortgage being foreclosed.

2. Contact the HOA or its management company to request a resale certificate or estoppel letter showing the current balance owed, including all assessments, fees, interest, and costs. Under Texas Property Code § 207.003, associations must provide this information within certain timeframes, though the statute primarily benefits purchasers in arms-length transactions.

3. Search the county clerk's records for any recorded lien affidavits, notices of default, or notices of foreclosure sale filed by the HOA against the property.

4. Determine whether the HOA has previously attempted foreclosure or filed any lawsuit for assessment collection. Court records may reveal prior collection activity that signals ongoing disputes.

5. Budget for the full amount owed, including a cushion for attorney fees and costs that may have accrued since the most recent statement.

Key Takeaways

• Texas Property Code § 209.0092 permits HOAs to foreclose assessment liens nonjudicially if the dedicatory instruments contain a power of sale — no lawsuit or court order required.

• The HOA's assessment lien often has priority over mortgages because it arises when the declaration is recorded, which predates most purchase and refinance mortgages.

• Subordination clauses in declarations may be narrowly drafted to protect only purchase-money institutional mortgages, leaving refinance mortgages and other liens junior to the HOA.

• The amount owed to an HOA typically includes assessments, late fees, interest (often 18%), and attorney fees — easily doubling or tripling the base amount.

• Investors purchasing at mortgage foreclosure sales must independently verify HOA lien status; the mortgage foreclosure does not automatically extinguish HOA claims.

Sources

• Texas Property Code Chapter 209, Texas Residential Property Owners Protection Act (Tex. Prop. Code Ann. §§ 209.001–209.016)

• Texas Property Code § 209.0091 (Association Lien for Assessments)

• Texas Property Code § 209.0092 (Foreclosure of Association Lien)

• Texas Property Code Chapter 51 (Provisions Generally Applicable to Foreclosure Sales)

• Texas Property Code Chapter 207 (Resale Certificates for Property Subject to Dedicatory Instruments)

• Bexar County Clerk, Real Property Records Index (for recorded declarations and lien affidavits)

• Texas Real Estate Commission, "Information About HOA Foreclosures," consumer advisory materials (for procedural summaries; investors should verify current statutory text)