When money is tight, a homeowner looks for expenses to trim, and sometimes may skip some bills altogether. But beware: falling behind on homeowners' association dues can trigger a foreclosure, even if the debt is only a few hundred dollars.

This often-overlooked trap appears to be snaring more and more homeowners as the recovery lags and unemployment stays high, according to an analysis by HSH Associates, the mortgage-data firm. Many states make homeowners' association foreclosures fairly easy, and the associations have a variety of incentives for acting quickly when a member is in arrears, HSH says.

Dues are used for things like exterior maintenance and road repair.


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Why are homeowners' associations so strict? It seems a bit surprising. After all, your friends and neighbors may hold many of the association’s seats.





When a foreclosure does result in the seizure of a home, it may be sold at auction for far less than it's worth, since the association may care only that it gets the few thousand dollars it is owed. That can obviously be devastating to the homeowner.

Some associations, trying to maximize income from threatened foreclosures, refuse to take partial payment and tack on fees for things like unkept lawns that might otherwise be overlooked, according to HSH. The goal: to assure the homeowner owes the minimum required by the state before a foreclosure can proceed.

