“The original debt can be relatively small,” lawyers warn after HOA takes $449,328 home over $977

Newton was given six months to raise the money to save his home, but Patten had been diagnosed with cancer, so he couldn’t do it. He’s now requested an emergency stay and claims he didn’t get proper notice of the auction, but the Association argues they served his son. The court has yet to rule on the stay, and Newton says he doesn’t know what to do next.

Experts say this isn’t uncommon, and it’s often allowed under state law

While it may seem unreasonable for an HOA to take an expensive home for a small amount of debt, experts say it’s not uncommon and may be allowed depending on the state.

“What surprises people is that the original debt can be relatively small,” Romy B. Jurado, a Florida real estate attorney, told Moneywise. “A homeowner may think, ‘I only owe $977. They cannot possibly take my house over that.’ That’s a dangerous assumption. Once you add late fees, attorney’s fees, and collection costs, the situation can get much worse.”

Jurado explained that the laws on when an HOA can foreclose on a home are state-specific. Casey Yontz, an Arizona bankruptcy attorney and founder of USBankruptcyHelp.com, explained that Arizona law has changed since Newton was subject to foreclosure in 2024.

“In 2024, Arizona’s threshold for HOAs was one year of delinquency or $1,200 in unpaid assessments, whichever happened first. Attorney fees and collection costs don’t count toward the threshold amount, but an amount due under $1,200 can qualify based on its age,” Yontz told Moneywise. “Arizona raised the thresholds in 2025 to 18 months or $10,000.” However, the older lower limit applies to Newton’s situation.

While the HOA may have had grounds to foreclose, experts also believe Newton could have legal arguments that the Association acted improperly. Specifically, Yontz said Newton should review its communication with the HOA carefully as the HOA must “make reasonable efforts to communicate with the homeowner and offer a reasonable payment plan.”