Arkansas HOA Foreclosure

Section 1: Overview — How HOA foreclosure works in Arkansas

Arkansas does one thing for condominiums and something very different for everyone else. The state has a condominium statute — the Horizontal Property Act — but it has no comprehensive law governing how a planned-community homeowners' association forecloses. In a planned community, the association's lien and its power to foreclose come from one place: the recorded covenants. The Horizontal Property Act, Ark. Code § 18-13-101 et seq., governs condominiums, which it calls horizontal property regimes. It dates to 1961, which makes it a traditional condominium statute rather than a modern uniform act.¹ For a planned-community association, the lien for unpaid assessments exists only because a recorded declaration or bill of assurance creates it — a rule the Arkansas Supreme Court confirmed in Kell v. Bella Vista Village Property Owners Association.² Arkansas has not adopted the Uniform Common Interest Ownership Act or the 1980 Uniform Condominium Act, so no statutory super-priority lifts an association lien over a first mortgage recorded earlier.³

Arkansas allows both judicial and non-judicial foreclosure, and the Statutory Foreclosure Act, Ark. Code § 18-50-101 et seq., governs the non-judicial sales.⁴ But that Act limits its non-judicial procedure to mortgagees and beneficiaries that are a mortgage company, a bank, or a savings and loan. In practice, that limit forces an association to foreclose its assessment lien through a judicial action in circuit court rather than by a non-judicial sale.⁵ The track also decides redemption: a non-judicial sale under the Statutory Foreclosure Act carries no right of redemption, while a judicial foreclosure sale carries a one-year statutory redemption right.⁶ The sections below lay out the statutory framework, the procedural sequence, recent legislative and judicial activity, and where Arkansas stands nationally.

Section 2: The statutory framework

2A. The Horizontal Property Act and condominium liens

The Arkansas Horizontal Property Act, Ark. Code § 18-13-101 et seq., reaches only condominiums — what the statute calls horizontal property regimes, which a developer establishes by recording a master deed.⁷ The Act traces to Acts 1961 (1st Ex. Sess.), No. 60, and it is a traditional horizontal property statute. It does not build on the Uniform Common Interest Ownership Act or the 1980 Uniform Condominium Act, and it contains no super-priority provision.⁸

The Act handles assessments narrowly. Section 18-13-116 requires co-owners to contribute pro rata to the expenses of administration, maintenance, and repair of the common elements.⁹ When an owner sells or conveys a unit, the sales price must first pay any unpaid assessments "in preference over any other assessments or charges of whatever nature except" past-due taxes and "payments due under mortgage instruments of encumbrance duly recorded."¹⁰ That language sets a payment priority at the moment of conveyance, and it plainly puts the assessment claim behind a duly recorded mortgage. What it does not do, by its own terms, is create a self-executing statutory assessment lien or hand the association a power of sale.¹¹ The Act also makes a purchaser jointly and severally liable with the seller for assessments owed up to the time of conveyance.¹²

Because the Horizontal Property Act does not itself create an enforceable lien with a foreclosure mechanism, a condominium association that wants to secure and foreclose unpaid assessments has to lean on its recorded master deed and bylaws to establish the lien — the same way a planned community leans on its declaration.¹³ The Act sets no statute of limitations specific to assessment-lien enforcement, and it sets no minimum dollar amount or months-delinquent threshold before collection can begin.¹⁴ One caution: the absence of an express statutory lien in the Horizontal Property Act should be checked against the current master deed for any specific regime, because Act 516 of 2025 modernized the Act for regimes established after September 1, 2025 (see Section 4).

2B. Planned-community CC&R-based liens

Arkansas has no general planned-community statute, and no statute that creates an assessment lien for a planned-community homeowners' association. The association's lien exists only if a recorded declaration of covenants, conditions, and restrictions — or a recorded bill of assurance — creates it.¹⁵ In Kell v. Bella Vista Village Property Owners Association, the Arkansas Supreme Court held that covenant language providing that assessments "shall be a charge on the land and shall be a continuing lien upon the property against which each such assessment is made" was enough to create a continuing lien for future assessments. The court compared it to a mortgage provision that extends a lien to future advances.¹⁶ Without that kind of covenant authority, no lien exists.¹⁷

Recording dates decide priority under Arkansas's race-notice recording system.¹⁸ A continuing-assessment lien created by a properly recorded declaration outranks later-recorded encumbrances and survives the foreclosure of a junior interest, but it stays subordinate to a first mortgage or deed of trust recorded before the assessment became delinquent.¹⁹ Where the declaration lacks continuing-lien language, an assessment lien recorded after the mortgage will be wiped out when the senior mortgage forecloses.²⁰

Foreclosure of a planned-community lien follows the terms of the recorded declaration and applicable Arkansas law. The practical rule is simple: the recorded covenants control the remedy. The declaration decides whether a lien exists, what it secures, and how the association may enforce it.²¹ So the first operational step for any Arkansas planned-community association is to read the recorded declaration, because that document answers how — and whether — the association may foreclose at all.²²

2C. Foreclosure method and federal overlays

Arkansas authorizes both judicial and non-judicial foreclosure.²³ Non-judicial foreclosure runs through the Statutory Foreclosure Act, Ark. Code § 18-50-101 et seq., which prescribes the pre-foreclosure notice packet, the recorded notice of default and intention to sell, publication, and the sale itself.²⁴ One limit governs whether an association can use it at all. Under Ark. Code § 18-50-116(c), the Act's procedures "shall apply only if the mortgagee or beneficiary is a mortgage company as defined in § 18-50-101 or is a bank or savings and loan."²⁵ A "mortgage company" is an entity that, "in the usual course of its business," is the mortgagee or beneficiary of a deed of trust or mortgage.²⁶ A homeowners' or condominium association is none of those things, so an association generally cannot foreclose its assessment lien through the non-judicial Statutory Foreclosure Act — and CC&R language cannot hand the association eligibility the statute withholds. That is why association assessment-lien foreclosure in Arkansas ordinarily proceeds as a judicial action in circuit court, exactly as it did in Kell.²⁷

Judicial foreclosure runs through the circuit court, which enters a decree of foreclosure and orders a sale.²⁸ Redemption depends on the track. The Statutory Foreclosure Act says nothing in the chapter creates an implied right of redemption, and a non-judicial sale terminates all rights of redemption.²⁹ By contrast, Ark. Code § 18-49-106 grants a one-year right of redemption after a circuit-court foreclosure sale of a mortgage or deed of trust, which a mortgagor may waive in the instrument.³⁰ Whether that one-year judicial redemption right reaches a covenant-based association foreclosure turns on how the action is pleaded and on the declaration.

Three federal overlays apply no matter which method an association uses. The Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., covers pre-sale dunning by third-party collectors and association-affiliated collectors. In Obduskey v. McCarthy & Holthus LLP, decided March 20, 2019, a unanimous Supreme Court held that "[a] business engaged in no more than nonjudicial foreclosure proceedings is not a 'debt collector' under the FDCPA, except for the limited purpose of §1692f(6)" — but pre-sale demand and collection communications stay fully covered.³¹ The Servicemembers Civil Relief Act, 50 U.S.C. § 3953, makes a sale or foreclosure of a servicemember's pre-service mortgaged property invalid during military service and for one year after, unless a court order or waiver is obtained; it is a strict-liability provision that carries criminal penalties.³² And the Bankruptcy Code's automatic stay, 11 U.S.C. § 362, halts foreclosure activity the moment the owner files.³³

Section 3: The procedural sequence

A. Lien establishment and priority

For condominiums under the Horizontal Property Act, the statute creates a payment priority for unpaid assessments at conveyance, but not a self-executing lien with a foreclosure mechanism; the condominium association relies on its recorded master deed and bylaws to establish an enforceable lien.³⁴ For planned communities under recorded CC&Rs, the lien exists only if the recorded declaration creates it, per Kell.³⁵ Recording the underlying declaration or master deed is what perfects the lien against third parties, because Arkansas priority follows recording dates.³⁶ The lien secures unpaid assessments and, where the declaration says so, interest, late charges, and costs of collection.³⁷ In nearly every case the association lien sits junior to a first mortgage or deed of trust recorded before the assessment became delinquent, because Arkansas grants no statutory super-priority for association liens — condominium or planned community alike.³⁸

B. Notice requirements and cure period

In a non-judicial foreclosure — available to mortgage lenders, generally not to associations — the foreclosing party must mail a pre-foreclosure packet at least ten days before initiation under Ark. Code § 18-50-103. That packet includes the holder's name and the note's physical location, loan-modification and forbearance information, a copy of the note and security instrument, and a payment history showing the date of default.³⁹ The notice of default and intention to sell under Ark. Code § 18-50-104 must state the parties' names, the legal description and street address, the recording data, the default, and a conspicuous warning: "YOU MAY LOSE YOUR PROPERTY IF YOU DO NOT TAKE IMMEDIATE ACTION."⁴⁰ The foreclosing party must record that notice at least sixty days before the sale and mail it within thirty days of recording, by both certified and first-class mail, to the mortgagor and to junior lienholders of record.⁴¹ A borrower may reinstate by curing the default any time after the notice of default is filed and before the sale, under Ark. Code § 18-50-114.⁴² Where a third-party or association-affiliated collector handles pre-sale dunning, the FDCPA validation notice applies.⁴³ For a judicial association foreclosure, service of the complaint and summons in circuit court provides notice, and any additional notice the recorded declaration requires applies as well.⁴⁴

C. Foreclosure sale procedure

On the non-judicial path under the Statutory Foreclosure Act, the trustee or mortgagee publishes the notice once a week for four consecutive weeks in a newspaper of general circulation, with the last publication no more than ten days before the sale, posts the notice at the county courthouse, and posts it online; the sale may not happen until at least sixty days after the notice of default is recorded.⁴⁵ The party then records an affidavit of compliance under Ark. Code § 18-50-106.⁴⁶ At the sale, the foreclosing party may submit a credit bid, but under Ark. Code § 18-50-107, "No bid shall be accepted that is less than two-thirds (2/3) of the entire indebtedness due at the date of sale."⁴⁷ On the judicial path, the association files a complaint in circuit court, obtains a decree of foreclosure, and the court orders the property sold; the association may credit bid its judgment amount. Either track lets the foreclosing claimant submit a credit bid.⁴⁸ SCRA compliance requires a court order before any sale of a covered servicemember's property.⁴⁹

D. Post-sale rights

Redemption again depends on the track. After a non-judicial sale under the Statutory Foreclosure Act, no right of redemption survives, because the chapter creates no implied right of redemption and the sale terminates all redemption rights.⁵⁰ After a judicial foreclosure sale, Ark. Code § 18-49-106 gives a one-year redemption right unless the owner waived it.⁵¹ Surplus sale proceeds are applied under Ark. Code § 18-50-109 — first to the expenses of sale, then to the secured obligation, with any surplus going to junior claimants and the former owner.⁵² A deficiency judgment is available after a non-judicial sale if the party seeks it within twelve months of the sale, limited to the lesser of the total debt minus the property's fair market value or the total debt minus the foreclosure sale price, under Ark. Code § 18-50-112.⁵³ After a non-judicial sale, the purchaser is entitled to immediate possession and may obtain a writ of assistance or bring an eviction action in circuit court if the former owner does not leave.⁵⁴

Section 4: Recent legislative and judicial activity

A. Recent bills

Two 2025 enactments shape the Arkansas foreclosure landscape: one adds fee-shifting risk to defective statutory foreclosures, and one modernizes the Horizontal Property Act for newer condominium regimes.

Two other 2025 bills that would have regulated property owners' associations did not become law. HB1453, which would have regulated POAs and required certain financial disclosures, was withdrawn by its author on February 20, 2025, and the related HB1660 was not enacted.⁵⁷

B. Recent appellate rulings

One recent Arkansas appellate decision squarely applies the Statutory Foreclosure Act, and it underscores how strictly the state enforces the rule that objections must come before the sale.

This is the only recent Arkansas appellate decision squarely applying the Statutory Foreclosure Act in the relevant window. No recent Arkansas appellate decision addresses association assessment-lien foreclosure, bill-of-assurance lien foreclosure, or the Horizontal Property Act's lien provisions, so the governing association-lien authority remains Kell v. Bella Vista Village Property Owners Association.⁵⁹

C. Active legislative debates

The withdrawal of HB1453 and the failure of HB1660 in the 2025 Regular Session show continuing — but so far unsuccessful — legislative interest in regulating property owners' associations and requiring financial transparency. Expect the debate to return in future sessions.⁶⁰

Section 5: National positioning and related coverage

Arkansas sits at the low-association-power end of the national spectrum. On lien priority, it grants no statutory super-priority, so an association lien is generally junior to a first mortgage recorded before the assessment became delinquent — unlike the UCIOA states that grant a limited super-priority.⁶¹ On foreclosure method, Arkansas is dual-track in form, but the Statutory Foreclosure Act's restriction to mortgage companies, banks, and savings and loans means associations ordinarily foreclose judicially rather than by non-judicial sale.⁶² On redemption, Arkansas eliminates redemption after a non-judicial sale while keeping a one-year right after a judicial sale, which sets it apart from Alabama's one-year post-sale redemption regime.⁶³ Like Alabama and Mississippi, Arkansas is CC&R-primary for planned communities, with the recorded declaration controlling whether and how an association may foreclose.⁶⁴ For multi-state operators, the takeaway is direct: you cannot run an Arkansas planned-community foreclosure on a non-judicial playbook imported from a power-of-sale state. The declaration and a judicial action control.

Arkansas rewards document-level diligence over reliance on a uniform statutory template. The controlling questions in every matter are the same: what the recorded declaration or master deed says, whether the lien was properly created and recorded, and which foreclosure track the association is entitled to use — with judicial foreclosure the default for association assessment liens.

Footnotes

1. Ark. Code § 18-13-101 et seq., Horizontal Property Act ↩
2. Kell v. Bella Vista Village Property Owners Ass'n, 258 Ark. 757, 528 S.W.2d 651 (1975) ↩
3. No Arkansas adoption of UCIOA; analysis based on the Horizontal Property Act and recording priority ↩
4. Ark. Code § 18-50-101 et seq., Statutory Foreclosures ↩
5. Ark. Code § 18-50-116(c) ↩
6. Ark. Code § 18-50-108; Ark. Code § 18-50-116(d)(1); Ark. Code § 18-49-106 ↩
7. Ark. Code § 18-13-103 ↩
8. Acts 1961 (1st Ex. Sess.), No. 60 ↩
9. Ark. Code § 18-13-116(a) ↩
10. Ark. Code § 18-13-116(c) ↩
11. Ark. Code § 18-13-116(c) ↩
12. Ark. Code § 18-13-116(d) ↩
13. Horizontal Property Act, Ark. Code § 18-13-104 (master deed) ↩
14. Horizontal Property Act, Ark. Code § 18-13-101 et seq. ↩
15. Kell v. Bella Vista Village Property Owners Ass'n, 258 Ark. 757 (1975) ↩
16. Kell v. Bella Vista Village Property Owners Ass'n, 258 Ark. 757 (1975) ↩
17. Kell v. Bella Vista Village Property Owners Ass'n, 258 Ark. 757 (1975) ↩
18. Arkansas race-notice recording, Ark. Code § 14-15-404 ↩
19. Continuing-lien priority over subsequent encumbrances; junior to a prior first mortgage ↩
20. Extinguishment of post-mortgage assessment lien on senior foreclosure ↩
21. Recorded declaration controls remedy ↩
22. Recorded declaration controls remedy ↩
23. Arkansas permits judicial and non-judicial foreclosure ↩
24. Ark. Code § 18-50-101 et seq. ↩
25. Ark. Code § 18-50-116(c) ↩
26. Ark. Code § 18-50-101(5) ↩
27. Kell v. Bella Vista Village Property Owners Ass'n, 258 Ark. 757 (1975) ↩
28. Ark. Code § 18-49-106; circuit court foreclosure decree ↩
29. Ark. Code § 18-50-116(d)(1); Ark. Code § 18-50-108(b) ↩
30. Ark. Code § 18-49-106 ↩
31. Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019) ↩
32. 50 U.S.C. § 3953 ↩
33. 11 U.S.C. § 362, automatic stay ↩
34. Ark. Code § 18-13-116 ↩
35. Kell v. Bella Vista Village Property Owners Ass'n, 258 Ark. 757 (1975) ↩
36. Arkansas recording priority, Ark. Code § 14-15-404 ↩
37. Kell v. Bella Vista Village Property Owners Ass'n, 258 Ark. 757 (1975) ↩
38. No statutory super-priority for association liens in Arkansas ↩
39. Ark. Code § 18-50-103 ↩
40. Ark. Code § 18-50-104 ↩
41. Ark. Code § 18-50-104(c) ↩
42. Ark. Code § 18-50-114 ↩
43. 15 U.S.C. § 1692g; Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019) ↩
44. Circuit court complaint and summons; declaration notice terms ↩
45. Ark. Code § 18-50-105; Ark. Code § 18-50-104 ↩
46. Ark. Code § 18-50-106 ↩
47. Ark. Code § 18-50-107 ↩
48. Ark. Code § 18-49-106; circuit court decree and sale ↩
49. 50 U.S.C. § 3953 ↩
50. Ark. Code § 18-50-108(b); Ark. Code § 18-50-116(d)(1) ↩
51. Ark. Code § 18-49-106 ↩
52. Ark. Code § 18-50-109 ↩
53. Ark. Code § 18-50-112 ↩
54. Ark. Code § 18-50-107 ↩
55. HB1238 / Act 306 of 2025, Ark. Code § 18-50-118 ↩
56. SB323 / Act 516 of 2025 ↩
57. HB1453 (2025), withdrawn February 20, 2025; HB1660 (2025), not enacted ↩
58. Wright v. Arkstone Real Estate Fund, 2025 Ark. App. 89 (CV-23-704) ↩
59. Kell v. Bella Vista Village Property Owners Ass'n, 258 Ark. 757 (1975) ↩
60. HB1453 (2025); HB1660 (2025) ↩
61. No statutory super-priority in Arkansas ↩
62. Ark. Code § 18-50-116(c) ↩
63. Ark. Code § 18-50-108; Ark. Code § 18-49-106 ↩
64. Kell v. Bella Vista Village Property Owners Ass'n, 258 Ark. 757 (1975) ↩