Indiana HOA Foreclosure

Indiana HOA Foreclosure

Section 1: Overview — How HOA foreclosure works in Indiana

Indiana lets an HOA take an owner's home only through the courts. There is no quick trustee's sale here. If an association wants to turn an unpaid-assessment lien into a sale of the home, it has to file a complaint in the county Circuit or Superior Court, win a judgment and a decree of sale, and then wait. State law blocks any process for a sheriff's sale until three months have passed from the day the complaint was filed. Only after that can the property go to a sheriff's sale, which ends in a sheriff's deed.1 And once that sale happens, it is final — Indiana gives the owner no right to redeem the home afterward. The owner can redeem only before the sale.2

Two Indiana statutes speak directly to community associations, and each one covers only part of the ground. Condominiums fall under the Horizontal Property Law in Ind. Code Article 32-25, which gives the association an express statutory lien for unpaid assessments.3 Planned communities answer to the Indiana Homeowners Associations statute in Article 32-25.5. That law sets the rules for how an association runs itself — budgets, meetings, records, fines, and dispute resolution — but it is not a full common-interest code.4 A third statute, Ind. Code Chapter 32-28-14, fills part of the gap by giving non-condominium homeowners associations a statutory lien they can record.5

Indiana has not adopted the Uniform Common Interest Ownership Act, and that choice matters. Neither the condominium lien nor the planned-community lien jumps ahead of a first mortgage the way a UCIOA "super-lien" would. In Indiana, the association's lien generally sits behind a first mortgage of record.6 When an association does foreclose, it runs the case through the same mortgage-foreclosure machinery found in Ind. Code Article 32-29: file the complaint, wait out the three months, give notice and publish it, hold the sheriff's sale, confirm it, and deliver the sheriff's deed.7 Three federal laws run alongside all of this — the Fair Debt Collection Practices Act, the Servicemembers Civil Relief Act, and the Bankruptcy Code's automatic stay.8 The rest of this page walks through the statutory framework, the step-by-step procedure, the latest legislation and court rulings, and where Indiana stands nationally.

Indiana foreclosure rules checker

Open the HOA Foreclosure Risk Checker for dollar minimums, foreclosure method, lien priority, and redemption rules in any state.

Section 2: The statutory framework

2A. Lien creation and priority

For condominiums, the lien arises on its own. Ind. Code § 32-25-6-3 says that any sums the association assesses for a unit's share of the common expenses, once they go unpaid, become a lien on that unit the moment they are assessed.9 But the statute is candid about where that lien stands in line. It ranks ahead of every other lien except two: tax liens and "all sums unpaid on a first mortgage of record."10 The board or manager can record and foreclose the lien by suit, using the same rules Indiana applies to mechanics' and materialmen's liens, or it can skip the lien entirely and simply sue the owner for a money judgment.11 One catch protects mortgage lenders: when a first mortgagee or another buyer takes title by foreclosing the first mortgage, that new owner owes nothing for the common expenses that came due before the purchase. The association absorbs the gap by spreading it across all the other co-owners.12

Planned communities draw their lien power from two places. The first is the recorded declaration of covenants, which usually creates a contractual assessment lien and spells out the right to foreclose. The second is Ind. Code Chapter 32-28-14, which gives the association a statutory lien for the unpaid common expenses an owner in the subdivision owes.13 That statutory lien does not exist until the association records a notice of lien with the county recorder, and it does not reach back to the date of the covenants or the date the charges were assessed.14 Its priority "is established on the date the notice of the lien is recorded" — an ordinary first-in-time rule that gives an earlier-recorded mortgage the better claim.15 Here too, a first mortgagee who takes title by foreclosure owes nothing for assessments that predate the sale.16 The bottom line is the same in both settings: Indiana is not a super-lien state. A bank's foreclosure outranks the association's lien, and the bank owes the association nothing for the unpaid assessments.17

2B. Judicial foreclosure procedure under Ind. Code § 32-29

Foreclosing an HOA lien in Indiana means going to court. The statutory homeowners association lien is enforced, the statute says, "by filing a complaint in the circuit or superior court of the county where the real estate that is the subject of the lien is located," and a foreclosed lien ends in a court-ordered sale.18 Foreclosures of liens on real estate follow the same rules as mortgage foreclosures — a point the Court of Appeals recently reaffirmed by pointing to Indiana Trial Rule 69(C).19 The case opens with a complaint and service of process. The owner gets time to answer. If the owner does nothing, the association takes a default judgment; if the owner fights, the case moves through litigation and, often, summary judgment.20

The heart of the timeline is the waiting period in Ind. Code § 32-29-7-3(a): "process may not issue for the execution of a judgment or decree of sale for a period of three (3) months after the filing of a complaint in the proceeding."21 Very old mortgages carry even longer waits, and there is one way to erase the wait entirely — if the court finds under Ind. Code § 32-30-10.6 that the owner has abandoned the property, it can order the sale executed the same day it enters judgment.22 Once the wait is over, the sheriff has to advertise the sale once a week for three weeks running in a newspaper of general circulation, with the first notice at least 30 days before the sale, deliver written notice to each owner, and post notice at the courthouse.23 The sheriff then sells at public auction — which Indiana now allows to run electronically — and must hold that sale within 120 days after the clerk certifies the judgment to the sheriff.24

Redemption in Indiana is narrow. Under Ind. Code § 32-29-7-7, any owner or part owner can redeem "before the sale" by paying the judgment, interest, and costs, and once they do, the sale cannot go forward.25 After the sale, the door closes. Section 32-29-7-13 says "there may not be a redemption from the foreclosure of a mortgage executed after June 30, 1931, on real estate except as provided in this chapter," and § 32-29-7-9 adds that "every sale made under this chapter is made without right of redemption."26 As soon as the sale ends, the sheriff signs a deed over to the buyer and records it.27 The association can usually still pursue a deficiency judgment for whatever the sale didn't cover — but if the borrower waives the three-month wait and the judgment holder agrees, that waiver buys the borrower a release from any deficiency judgment.28

2C. Federal overlays

Three federal regimes operate next to Indiana's court process. The first is the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 and following. It governs the dunning letters and calls that come before suit when a third-party collector or an association-affiliated collector handles them, because HOA assessments count as "debts" under the Act. In Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019), the Supreme Court held that a business doing "no more than nonjudicial foreclosure proceedings is not a 'debt collector' under the FDCPA, except for the limited purpose of § 1692f(6)."29 That safe harbor is narrow, and it turns on the mechanics of a nonjudicial sale. The Court pointedly left open whether the Act reaches the judicial enforcement of a security interest, and Justice Sotomayor warned in her concurrence that "enforcing a security interest does not grant an actor blanket immunity" from the Act.30 Because Indiana foreclosures go through the courts, the pre-sale collection effort generally stays inside the FDCPA's reach.31

The second is the Servicemembers Civil Relief Act, 50 U.S.C. § 3901 and following, which protects people on active duty. Section 3953 voids a sale, foreclosure, or seizure carried out during military service — or within a year after it — on a mortgage obligation that predates the service, unless a court approves it first or the servicemember waives the protection in writing.32 Since Indiana already routes foreclosures through a judge, the court has to check military status, and it can pause the case or adjust the obligation when military service genuinely hampers the owner's ability to keep up.33

The third is the Bankruptcy Code's automatic stay, 11 U.S.C. § 362, which stops foreclosure the instant the owner files for bankruptcy. An association that wants to keep going has to ask the bankruptcy court to lift the stay first, and a filing on the eve of a sheriff's sale halts the sale in its tracks.34

Section 3: The Indiana HOA foreclosure procedural sequence

A. Lien establishment and recording

For condominiums, the lien needs no paperwork to take hold. Unpaid assessments "constitute a lien on the unit effective at the time of assessment" under Ind. Code § 32-25-6-3 — nothing has to be recorded for the lien to attach, though it still ranks behind a first mortgage of record.35 Planned communities work the other way around. The statutory homeowners association lien under Ind. Code Chapter 32-28-14 simply does not exist until the association records a notice of lien with the county recorder, and it does not reach back to any earlier date.36 That recorded notice has to name the association and its address, give the property's address and legal description, name the owner, and state the amount of the lien, and an association officer must sign it and acknowledge it the way a deed is acknowledged.37 Many planned communities also lean on a contractual lien created by the recorded declaration. Either way, the statutory lien's priority is fixed by its recording date, so an earlier-recorded mortgage comes first.38

B. Pre-foreclosure notice and demand

What an association has to do before it forecloses comes mostly from its own governing documents, not from a single statutory checklist. Recorded covenants usually require the association to send delinquency notices and a demand before it escalates, and the Indiana Homeowners Associations statute lets a board meet privately to talk through delinquent assessments.39 The collection effort itself can trigger the FDCPA when a third-party or association-affiliated collector runs it — including the Act's rule against disclosing an owner's assessment debt to outsiders.40 Before filing, an association should also check two things that can stop a case cold: whether the owner is in bankruptcy, which brings the automatic stay, and whether the owner is on active military duty, which brings SCRA protection.41 For the statutory planned-community lien, the law sets a clear window. A foreclosure complaint "may not be filed earlier than ninety (90) days" after the lien is recorded, and it must be filed within five years — after that, the lien is void.42

C. Foreclosure complaint, waiting period, and sheriff's sale

The association files its foreclosure complaint in the county Circuit or Superior Court; for the statutory planned-community lien, Ind. Code § 32-28-14-8 sets that venue.43 Service of process follows the Indiana Rules of Trial Procedure, and the owner gets time to answer — an uncontested case heads to a default judgment, while a contested one moves through litigation.44 Because these lien foreclosures track mortgage-foreclosure rules under Trial Rule 69(C), the three-month wait in Ind. Code § 32-29-7-3 applies before any process for a sale can issue.45 During those months, the owner can still cure by redeeming under Ind. Code § 32-29-7-7 — paying the judgment, interest, and costs to call off the sale.46 Once the wait runs out and the clerk certifies the judgment to the sheriff, the sheriff advertises the sale once a week for three weeks straight, with the first notice at least 30 days ahead, serves written notice on each owner, and posts notice at the courthouse.47 Then the sheriff holds a public auction, which may run electronically; the highest bidder wins, and the sheriff confirms the sale and signs a deed of conveyance right after it closes.48

D. Post-sale rights and remedies

After the sale, Indiana offers the owner no second chance to redeem — that right exists only before the sale, and Ind. Code § 32-29-7-13 rules out any other path back.49 The money from the sale is paid out in the order Ind. Code § 32-30-10-14 sets: first the costs of the sale, then the principal, interest, and costs of the lien being foreclosed, then the junior liens in their order of priority, with any surplus going to the clerk for the debtor.50 A junior lienholder that sits on its hands is wiped out with no claim to the proceeds, so junior interests should file an answer and watch the sale so they can petition for any surplus.51 If the former owner stays in the home after the sheriff's deed issues, the buyer can move to evict as part of the same foreclosure case.52 A deficiency judgment is usually available — unless the owner waived the waiting period with the judgment holder's consent — but when the association's lien sits behind a large first mortgage, the sale proceeds often leave it with nothing.53

Section 4: Recent legislative and judicial activity

A. Recent bills

Indiana's 2026 session produced the most consequential HOA legislation the state has seen in years. Two enrolled acts — House Enrolled Act 1152 and House Enrolled Act 1115 — reshape how associations set budgets and what they can charge owners. Neither one touches the foreclosure mechanics in Ind. Code Article 32-29 or the lien-priority rules.

Status Signed — P.L. 53-2026
⌾ Last verified June 15, 2026
Docket

HEA 1152 · 2026 Regular Session

Effective
Jul 1, 2026
Sunset
N/A
Homeowners associations: budgets, fees, and amendment thresholds
Synopsis

House Enrolled Act 1152 amends the Indiana Homeowners Associations statute in Ind. Code Article 32-25.5. It caps a budget increase adopted without a quorum at the lesser of 105 percent of the last approved budget or the average rise in the Midwest housing Consumer Price Index, while letting a developer in control push that to 110 percent within five years of the first lot sale. It bars an association from charging any fee for a statement of unpaid assessments or for services the association itself provides, and it blocks governing-document amendment thresholds above two-thirds. The House passed the bill 87–1, and the Governor signed it on March 3, 2026, as Public Law 53-2026.54

Operational impact
What this means, by role
Property managers Statements of unpaid assessments — payoff and resale letters — can no longer carry a fee, and collection-cost recovery narrows.
HOA board members Budget headroom without a quorum shrinks from 110 percent to 105 percent outside the developer window, tightening reserve planning.
Community association attorneys Governing-document amendment supermajorities above two-thirds are no longer enforceable going forward.
Homeowners You can't be charged for a statement of unpaid assessments, and a large budget jump now needs a quorum vote — more say, fewer surprise costs.
Status Signed
⌾ Last verified June 15, 2026
Docket

HEA 1115 · 2026 Regular Session

Effective
N/A
Sunset
N/A
Homeowners associations: meeting notice, voting, and fees
Synopsis

House Enrolled Act 1115, a companion measure, tightens board-meeting notice — at least four days' written notice with an agenda — and addresses member voting and association fees. It caps the resale or payoff letter fee at $50, down from the prior $250 ceiling, and repeals the old records-production fee allowance, which had let an association charge after the first hour at up to $35 an hour and no more than $200. Associations may no longer charge homeowners to copy records requested under the inspection provisions. The Governor signed HEA 1115 on March 12, 2026.55

Operational impact
What this means, by role
Property managers The resale or payoff letter fee is capped at $50, and you can no longer bill owners for copying records requested under the inspection rules — update fee schedules.
HOA board members Give members at least four days' written notice with an agenda before a board meeting.
Community association attorneys Advise clients that the prior $250 payoff-letter cap and the records-production fee allowance are gone.
Homeowners You'll pay no more than $50 for a payoff or resale letter, and nothing to inspect and copy association records.

B. Recent appellate rulings

Indiana's appellate courts have been clarifying how far an association's lien can reach in a foreclosure. The most directly relevant recent decision came down in late 2025.

Status Final
⌾ Last verified June 15, 2026
Case

Treyburn Lakes Homeowners Association, Inc. v. Scott

Indiana Court of Appeals · No. 25A-CC-646
Decided
Oct 31, 2025
Court
Ind. Ct. App.
Synopsis

In this case, the association recorded a homeowners association lien that secured three earlier money judgments, including attorney-fee awards, and then moved to foreclose. The trial court left the earlier attorney fees out of the foreclosure decree and cut the current action's fees from $5,754.00 to $1,424.00 without holding a hearing. The Court of Appeals reversed. Writing for the panel, Judge May (with Judges Mathias and Bradford concurring) held that a foreclosing association may recover the amounts its lien secures — the earlier attorney-fee awards included — and that a court cannot slash a fee request without an evidentiary hearing. The panel rejected the idea that the foreclosure was an improper "super case," writing that "the trial court's concern about this proceeding being a 'super case' in which attorney fees are 'relitigated' is simply misplaced."56

Operational impact
What this means, by role
Property managers Amounts reduced to prior judgments and secured by a recorded lien remain collectible in the foreclosure.
HOA board members Recording a lien that captures prior judgments and accruing fees preserves recovery across multiple proceedings.
Community association attorneys Request an evidentiary hearing on fee reasonableness, and document the Rule 1.5(a) factors to resist reductions.
Homeowners Attorney fees already reduced to judgment and secured by the lien can be added to what you owe in the foreclosure.

C. Active legislative debates

The 2026 fee-and-budget restrictions in HEA 1152 and HEA 1115 drew organized pushback from the Community Associations Institute's Indiana legislative action committee. The group argued that the Senate's fee-prohibition language stripped out the earlier $250 cap on payoff letters and "removes transparency in the amount of fees that are charged, as agents will be forced to combine fees into larger service contracts." Further narrowing of that language remains a live subject for future sessions.57

Section 5: National positioning and related coverage

Indiana sits squarely in the judicial-foreclosure camp, set apart by its statutory pre-sale waiting period and its near-total absence of post-sale redemption. That puts it at a distance from the non-judicial, trustee's-sale states like Arizona, Georgia, and Idaho, where an association or lender can sell through a trustee without ever filing suit. It also separates Indiana from the UCIOA super-priority states like Colorado, Vermont, and Connecticut, where a slice of association assessments leaps ahead of the first mortgage. Indiana has not joined the recent reform wave behind Colorado's HB 22-1137 or Maryland's HB 107, and it offers nothing like the long post-sale redemption periods of Iowa, Kansas, and Kentucky. For a multi-state operator, the practical takeaway is plain: run Indiana collections as litigation on a multi-month timeline, expect no super-priority leverage, and count on no post-sale redemption to fall back on.

HOA Weekly's Indiana Foreclosure coverage updates quarterly as the General Assembly and the Indiana courts act; dates and bill statuses should be checked against the primary sources cited here. The federal frameworks above — the FDCPA, the SCRA, and the Bankruptcy Code's automatic stay — apply to Indiana associations regardless of the state rules.

  1. Ind. Code § 32-29-7-3 (no process for execution of a judgment or decree of sale for three months after the complaint is filed) ↩
  2. Ind. Code § 32-29-7-7; Ind. Code § 32-29-7-13 (redemption available only before the sale) ↩
  3. Ind. Code § 32-25-6-3 (condominium assessment lien under the Horizontal Property Law) ↩
  4. Ind. Code art. 32-25.5 (Indiana Homeowners Associations) ↩
  5. Ind. Code ch. 32-28-14 (homeowners association lien) ↩
  6. Ind. Code § 32-25-6-3; Ind. Code § 32-28-14-5 (association liens junior to a first mortgage of record) ↩
  7. Ind. Code art. 32-29, ch. 7 (mortgage-foreclosure procedure) ↩
  8. 15 U.S.C. § 1692 et seq.; 50 U.S.C. § 3901 et seq.; 11 U.S.C. § 362 (federal overlays) ↩
  9. Ind. Code § 32-25-6-3(a) (lien effective at the time of assessment) ↩
  10. Ind. Code § 32-25-6-3(a) (priority over all liens except tax liens and a first mortgage of record) ↩
  11. Ind. Code § 32-25-6-3(b), (d) (foreclosure by suit; alternative money judgment) ↩
  12. Ind. Code § 32-25-6-3(e) (first-mortgage acquirer not liable for pre-acquisition common expenses) ↩
  13. Ind. Code § 32-28-14-5(a) (statutory homeowners association lien) ↩
  14. Ind. Code § 32-28-14-6 (lien attaches upon recording; no relation back) ↩
  15. Ind. Code § 32-28-14-5(b) (priority established on the date the notice of lien is recorded) ↩
  16. Ind. Code § 32-28-14-7 (first-mortgage acquirer not liable for pre-acquisition assessments) ↩
  17. Ind. Code § 32-25-6-3; Ind. Code § 32-28-14-5 (no super-lien priority over a first mortgage) ↩
  18. Ind. Code § 32-28-14-8 (enforcement by complaint in circuit or superior court) ↩
  19. Treyburn Lakes Homeowners Ass'n, Inc. v. Scott, No. 25A-CC-646 (Ind. Ct. App. Oct. 31, 2025) (lien foreclosures follow mortgage rules under Trial Rule 69(C)) ↩
  20. Ind. Code § 32-30-10.5-8 (foreclosure complaint and proceedings) ↩
  21. Ind. Code § 32-29-7-3(a) (three-month waiting period) ↩
  22. Ind. Code § 32-29-7-3(a); Ind. Code § 32-30-10.6-5 (abandoned property; decree may issue at judgment) ↩
  23. Ind. Code § 32-29-7-3 (advertisement, written notice, and posting of the sheriff's sale) ↩
  24. Ind. Code § 32-29-7-3 (public auction, which may be electronic; sale within 120 days of certification) ↩
  25. Ind. Code § 32-29-7-7 (redemption before the sale by paying the judgment, interest, and costs) ↩
  26. Ind. Code § 32-29-7-13; Ind. Code § 32-29-7-9 (sale made without right of redemption) ↩
  27. Ind. Code § 32-29-7-10 (sheriff's deed delivered and recorded after the sale) ↩
  28. Ind. Code § 32-29-7-5 (deficiency judgment; release on consensual waiver of the waiting period) ↩
  29. Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019) ↩
  30. Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019) (Sotomayor, J., concurring) ↩
  31. 15 U.S.C. § 1692 et seq. (FDCPA coverage of pre-suit collection) ↩
  32. 50 U.S.C. § 3953 (sale, foreclosure, or seizure during military service) ↩
  33. 50 U.S.C. § 3953 (court verification of military status; stay or adjustment) ↩
  34. 11 U.S.C. § 362 (automatic stay) ↩
  35. Ind. Code § 32-25-6-3 (condominium lien attaches without recording; junior to first mortgage) ↩
  36. Ind. Code § 32-28-14-6 (planned-community lien arises only on recording; no relation back) ↩
  37. Ind. Code § 32-28-14-5(c) (required contents of the notice of lien; signature and acknowledgment) ↩
  38. Ind. Code § 32-28-14-5(b) (priority fixed by recording date) ↩
  39. Ind. Code § 32-25.5-3-3 (board may meet privately to discuss delinquent assessments) ↩
  40. 15 U.S.C. § 1692 et seq. (FDCPA; prohibition on disclosing assessment debt to third parties) ↩
  41. 11 U.S.C. § 362; 50 U.S.C. § 3953 (automatic stay; SCRA protections) ↩
  42. Ind. Code § 32-28-14-8 (complaint no earlier than 90 days after recording; five-year filing window) ↩
  43. Ind. Code § 32-28-14-8 (venue in the circuit or superior court of the county) ↩
  44. Ind. Code § 32-30-10.5-8 (foreclosure complaint and default or contested proceedings) ↩
  45. Ind. Code § 32-29-7-3; Treyburn Lakes Homeowners Ass'n, Inc. v. Scott, No. 25A-CC-646 (Ind. Ct. App. Oct. 31, 2025) ↩
  46. Ind. Code § 32-29-7-7 (cure by redemption before the sale) ↩
  47. Ind. Code § 32-29-7-3 (advertisement, written notice, and posting) ↩
  48. Ind. Code § 32-29-7-3; Ind. Code § 32-29-7-10 (public auction; sheriff's deed after the sale) ↩
  49. Ind. Code § 32-29-7-13 (no post-sale redemption) ↩
  50. Ind. Code § 32-30-10-14 (statutory order of distribution of sale proceeds) ↩
  51. Ind. Code § 32-30-10-14 (junior lienholders and surplus) ↩
  52. Ind. Code § 32-29-7-10 (possession and eviction following the sheriff's deed) ↩
  53. Ind. Code § 32-29-7-5 (deficiency judgment availability) ↩
  54. House Enrolled Act 1152, Pub. L. No. 53-2026 (Ind. 2026) ↩
  55. House Enrolled Act 1115 (Ind. 2026) ↩
  56. Treyburn Lakes Homeowners Ass'n, Inc. v. Scott, No. 25A-CC-646 (Ind. Ct. App. Oct. 31, 2025) ↩
  57. Community Associations Institute, Indiana Legislative Action Committee, 2026 Legislative Commentary ↩

© 2026 Thastel Group LLC. All rights reserved. HOA Weekly™ is a trademark of Thastel Group LLC.