HOA foreclosures spike overseas as rising costs put pressure on community living. US homeowners associations are taking tougher action on unpaid fees, offering a warning sign for Australia’s strata sector as insurance, maintenance and compliance costs continue to climb.
Homeowners associations (HOAs) across the United States are becoming increasingly aggressive in pursuing unpaid fees, with a growing number of communities turning to legal action and, in some cases, foreclosure, according to a Wall Street Journal report.
The trend highlights the financial pressures facing shared-property communities globally, as rising insurance premiums, maintenance costs and stricter building standards squeeze budgets.
According to US real estate analytics firm Attom, 6,376 properties were subject to HOA-related foreclosure filings in the first quarter of 2026, covering everything from initial default notices through to completed sales.
That figure is almost 40 per cent higher than two years earlier and is rising faster than overall mortgage foreclosure rates.
“HOAs are being forced into more aggressive collections to avoid their own financial collapse.”
Brian Fox, co-founder, Benutech
While the US HOA system differs from Australia’s strata model, the financial challenges facing community-managed properties have clear parallels.
Rising costs squeeze community budgets
HOAs typically rely on homeowner fees to fund shared services including landscaping, repairs, insurance and maintenance and when residents fall behind, the financial burden often shifts to other owners.
At the same time, many communities are facing sharply higher operating costs.
Between 2024 and early 2025, insurance premiums covering shared property and liability increased for 91 per cent of community associations in the US, according to the Foundation for Community Association Research.
Some communities experienced premium increases of more than 100 per cent.
Reserve funds, which act as emergency savings accounts for major repairs, have also been depleted as the cost of replacing ageing infrastructure continues to rise.
One US condo association, Fairview Condo 1 in Middle Island, New York, has 15 owners behind on monthly fees of US$595 (approximately AUD$920), creating a shortfall of around US$8,900 (approximately AUD$13,800) each month.
The association said 10 properties are now involved in foreclosure proceedings.
President Deborah Amilowski said each delinquency had its own circumstances, ranging from job losses and divorce to investors being affected when tenants failed to pay rent.
“Every delinquency has its own story.”
The financial pressure is not limited to struggling households.
In Las Vegas’ Summerlin community, a property linked to boxing champion Floyd Mayweather Jr entered HOA foreclosure proceedings after accumulating almost US$25,000 (approximately AUD$39,000) in unpaid fees, interest and legal costs.
A lawyer for Mayweather said the issue was an accounting oversight and the outstanding amount had since been paid.
Lessons for Australia’s strata sector
Australia does not have the same HOA foreclosure framework as the US, but strata communities are facing many of the same pressures.
Rising insurance premiums, increased repair costs, ageing buildings and stronger compliance requirements are forcing many owners corporations to reassess budgets and levies.
For Australian property professionals, the issue reinforces the importance of understanding strata finances when advising buyers and sellers.
Outstanding levies, upcoming special levies, insurance costs and planned capital works can all influence buyer confidence and property values. As community living becomes more common, financial transparency around owners corporations is likely to become an increasingly important part of the property conversation.
When communities struggle to maintain buildings and common areas, the impact can extend beyond individual owners – affecting amenity, buyer demand and long-term asset values.
This story draws on “HOA fees skyrocketing? A California bill could cap them, but Democrats are divided” by CalMatters, and “Homeowners Associations Are Foreclosing on More Residents” by The Wall Street Journal.