Vermont HOA Collections & Liens

Section 1: Overview — How assessment collection and liens work in Vermont

Vermont adopted the Uniform Common Interest Ownership Act, and that choice shapes every delinquency case in the state. The Vermont Common Interest Ownership Act, 27A V.S.A. § 1-101 et seq., gives associations a six-month super-priority lien that reaches ahead of the first mortgage.¹ Foreclosure runs through the courts — Vermont offers no power-of-sale shortcut — and the standard mechanism is strict foreclosure, with a court-set redemption period following the decree.² One feature sets Vermont apart from most states: it has no intermediate appellate court, so contested cases travel directly from the Superior Court to the Vermont Supreme Court.³

The lien itself requires no extra filing. Recording the declaration constitutes record notice and perfection; no separate claim of lien is needed.⁴ The super-priority covers common-expense assessments that would have come due during the six months immediately before the association files to enforce the lien.¹ Foreclosure is judicial, running under 12 V.S.A. chapter 172, and the association may elect either strict foreclosure or a judicial sale.⁵

Vermont sets a hard minimum before any foreclosure action can open: the owner must owe at least three months of common-expense assessments, must have declined or defaulted on a payment plan, and the executive board must vote to pursue that specific unit.⁶ Measured against the national landscape, Vermont belongs to the super-priority group, though its six-month window falls short of Nevada's nine months and Connecticut's nine months. The three-month delinquency trigger — rather than a flat dollar threshold — distinguishes it from states like California and Colorado.⁷

The sections that follow detail lien creation and priority, the operational collection and foreclosure sequence, recent activity, and Vermont's place in the national picture.

Vermont HOA Collections & Liens at a glance

Section 2: The lien and its priority

2A. Lien creation, authority, and what it secures

The assessment lien in Vermont is statutory. Under 27A V.S.A. § 3-116(a), the association holds a statutory lien on a unit for any assessment attributable to that unit or any fine imposed against its owner.¹ The lien arises automatically and needs no separate filing: § 3-116(e) states that recording the declaration constitutes record notice and perfection, and no further recording of any claim or lien for assessment is required.⁴ If an assessment is payable in installments, the full amount becomes a lien from the moment the first installment comes due.¹

What the lien secures is broad. Section 3-116(a) provides that, unless the declaration provides otherwise, reasonable attorney's fees and costs, other fees, charges, late charges, fines, and interest — and any other sums due to the association under the declaration, the title, or as a result of an administrative, arbitration, mediation, or judicial decision — are enforceable in the same manner as unpaid assessments.¹⁰ Section 3-116(h) adds that a judgment or decree in any enforcement action must include an award of costs and reasonable attorney's fees to the prevailing party.¹³ The lien attaches to the unit; § 3-116(k) confirms that an owner cannot escape liability by waiving use of common elements or abandoning the unit.¹⁴ For pre-1999 condominiums under the Condominium Ownership Act, the lien source is 27 V.S.A. § 1323(a), which makes unpaid common-expense assessments a lien on the apartment or site.⁸

2B. Lien priority and any super-priority component

Section 3-116(b) sets the general priority rule: the association lien is prior to all other liens and encumbrances on a unit except (1) liens and encumbrances recorded before the declaration was recorded; (2) a first mortgage or deed of trust recorded before the assessment became delinquent; and (3) liens for real-estate taxes and other governmental assessments.¹ The super-priority lives in § 3-116(c): the lien is prior even to that first mortgage "to the extent of the common expense assessments based on the periodic budget adopted by the association pursuant to subsection 3-115(a) of this title that would have become due in the absence of acceleration during the six months immediately preceding institution of an action to enforce the lien."¹ Section 3-116(c) also preserves the priority of mechanics' and materialmen's liens.¹ This six-month figure tracks the current statutory text.

Whether that super-priority is a one-time six-month amount or rolls forward through the pendency of the action — the "rolling lien" question — the statute does not resolve. Vermont trial courts have split evenly on whether the priority continues for dues accruing after the enforcement action is filed.¹⁵ No Vermont Supreme Court decision has settled the question, so the safest operating assumption is the literal six-month reach-back measured from the date the enforcement action is filed.¹

2C. CC&R interaction, corporate-law overlay, and federal overlay

Recorded declarations (CC&Rs) supplement the statutory lien but operate within it. Several § 3-116 provisions apply "unless the declaration otherwise provides," which means a declaration can vary what the lien secures — but it cannot expand the six-month super-priority or override the statutory foreclosure prerequisites.¹⁰ The underlying assessment debt is subject to Vermont's six-year statute of limitations for civil actions under 12 V.S.A. § 511.¹⁶ Separately, § 3-116(f) imposes its own enforcement deadline: a lien for unpaid assessments is extinguished unless enforcement proceedings begin within three years after the full amount of the assessment becomes due.¹⁷

Three federal frameworks apply on top of Vermont's state rules. The Fair Debt Collection Practices Act can reach associations and, more often, their attorneys and outside collection agents. The automatic stay in bankruptcy halts collection and foreclosure the moment a petition is filed. The Servicemembers Civil Relief Act limits foreclosure and related remedies against active-duty servicemembers. Those federal overlays will be covered in detail in a forthcoming federal section.

Section 3: The collection and foreclosure process

3A. Pre-lien collection sequence

For VCIOA communities — both condominiums and planned communities created on or after January 1, 1999 — no statutory pre-lien notice is required, because the lien is already perfected by the recorded declaration under § 3-116(e).⁴ In practice, the operative notices come from the declaration and from federal debt-collection rules, not from a state pre-lien notice statute. The VCIOA does give owners an information right: under § 3-116(i), the association must furnish a statement of unpaid assessments within 10 business days of a written request, and that statement binds the association.¹⁸ The statute also fixes the order in which payments are applied: § 3-116(n) directs that, unless the parties agree otherwise, sums paid by a delinquent owner go first to unpaid assessments, then late charges, then reasonable attorney's fees and collection costs, and last to other fees, charges, fines, penalties, and interest.¹⁹ This payment-application rule governs both condominiums and planned communities under the VCIOA.

3B. Recording and the pre-foreclosure sequence

Because recording the declaration perfects the lien, there is no separate claim-of-lien recording step for VCIOA communities.⁴ The pre-foreclosure prerequisites are statutory and form the operational core of Vermont collections. Under § 3-116(m), an association may not commence a foreclosure action unless: (1) at the time the action is commenced the owner owes a sum equal to at least three months of common-expense assessments based on the last adopted periodic budget and has failed to accept or comply with a payment plan offered by the association; and (2) the executive board votes to commence a foreclosure action specifically against that unit.⁶ Both conditions apply to condominiums and planned communities under the VCIOA. The statute does not authorize delegating the board vote to management or counsel — the vote belongs to the board.⁶ On notice, § 3-116(j) requires the association to give the notice required by statute or, if there is no such requirement, reasonable notice of its action to all lienholders whose interest would be affected.⁹ Vermont's foreclosure mediation program under 12 V.S.A. chapter 163 applies to mortgages on owner-occupied dwellings of four units or fewer and is a mortgage-foreclosure mechanism, not an association-lien requirement.²⁰

3C. Foreclosure mechanics and thresholds

Foreclosure of an association lien is judicial. Section 3-116(j) directs that the lien may be foreclosed pursuant to 12 V.S.A. chapter 172.⁹ Vermont is not a power-of-sale state for association liens; the process runs through the Civil Division of the Superior Court.²¹ Vermont offers two judicial paths: strict foreclosure under 12 V.S.A. § 4941, in which the court issues a decree foreclosing the equity of redemption and, if the property is not redeemed, title vests in the foreclosing party without a sale; and foreclosure by judicial sale under 12 V.S.A. §§ 4945-4954.⁵ Under § 4941, strict foreclosure requires a court finding that there is no substantial value in the property over the debt and unpaid taxes; any party may move for, or the court may order, a judicial sale instead.²²

The minimum threshold runs as a multiple of assessments rather than a dollar figure: under § 3-116(m), the owner must owe at least three months of common-expense assessments before a foreclosure action may begin.⁶ There is no flat dollar minimum and no separate minimum delinquency duration in the statute. Fines and fees can form part of the lien and are enforceable in the same manner as assessments, but § 3-116(o) limits fines-only foreclosures: unless the sums due include an unpaid assessment, a foreclosure action may not begin unless the association first obtains a money judgment against the owner and perfects a judgment lien against the unit.¹¹ Section 3-116(p) requires that every aspect of a foreclosure, sale, or other disposition be commercially reasonable.²³ These provisions apply to condominiums and planned communities under the VCIOA. For a pre-1999 condominium proceeding under 27 V.S.A. § 1323, the lien is foreclosed "in like manner as a mortgage on real property," again through the courts.⁸

3D. Post-sale: redemption, deficiency, surplus, reinstatement

Vermont's redemption structure depends on which judicial path the association uses. In strict foreclosure, the redemption period runs after the decree: under 12 V.S.A. § 4941(d), the time of redemption is six months from the date of the decree unless the court orders a shorter time or the parties agree to a shorter period.²² In foreclosure by judicial sale, redemption runs before the sale: under 12 V.S.A. § 4946(b), for an owner-occupied principal residence or farmland the redemption period is six months from the decree unless shortened, the sale is held after the redemption period expires, and the owner may redeem up to the moment of sale.²⁴ There is no post-sale right of redemption. A deficiency judgment is available; in a judicial-sale foreclosure the association may request it in the complaint, and it is waived if not requested before the confirmation order.²⁵ Surplus proceeds from a judicial sale, after satisfying the liens, are distributed to junior interests and then to the former owner.²⁵ Reinstatement is narrow: under 12 V.S.A. § 4948, in a judicial-sale foreclosure the owner may reinstate after the redemption period expires but before the sale only if both the owner and the foreclosing party agree.²⁶ These mechanics flow from Vermont's general foreclosure statutes and apply to association-lien foreclosures because § 3-116(j) routes them through chapter 172.⁹

Section 4: Recent legislative and judicial activity

Recent Legislation

Vermont's legislative action on assessment collection has been limited during the 2024-2026 period. One measure did touch the foreclosure machinery: Act 64 of 2025 added a hearing requirement to the step where courts award attorney's fees — a targeted change with real timing implications for any collection case that proceeds through chapter 172.

No other 2024-2026 Vermont bill directly amending condominium or planned-community assessment collection, liens, or association foreclosure was identified.

Recent Court Rulings

Vermont's appellate record on association-lien law is quiet. No Vermont Supreme Court decision issued in the past 36 months — 2023 through 2026 — interprets 27A V.S.A. § 3-116 assessment liens, the six-month super-priority, or association-lien foreclosure. Vermont has no intermediate appellate court; appeals travel directly from the Superior Court to the Vermont Supreme Court.³ The controlling authority on commercial reasonableness in association foreclosures remains Will v. Mill Condominium Owners' Association, 2004 VT 36, which holds that association foreclosure sales under the VCIOA must be commercially reasonable.²⁹ The unresolved super-priority term question — one-time six months versus rolling — remains a matter of split Superior Court decisions, not settled appellate law.¹⁵

Active Legislative Debates

The 2025-2026 Vermont legislative session produced no active proposal to alter the assessment-collection, lien-priority, or association-foreclosure framework. Vermont's legislative activity on these mechanics remains low.

Section 5: National positioning and related coverage

Vermont sits in the super-priority camp of the national collections landscape, but its priority window is comparatively short. Nevada's nine-month super-priority, the usual national reference point, is set by NRS 116.3116 and was construed in SFR Investments Pool 1, LLC v. U.S. Bank, 334 P.3d 408 (Nev. 2014), as a true lien priority that can extinguish a first mortgage — not merely a payment priority.³⁰ Connecticut, often grouped with Vermont because both still use strict foreclosure, actually grants a nine-month priority under Conn. Gen. Stat. § 47-258(b), having moved from six to nine months by P.A. 13-156 in 2013.³¹ Vermont's six-month window falls short of both. Vermont also conditions foreclosure on a three-month-of-assessments trigger rather than the minimums used by threshold-restricted states: California bars foreclosure unless the delinquent assessments reach $1,800 or more, or become more than 12 months delinquent, exclusive of fees and interest, under Cal. Civ. Code § 5720, while Colorado requires the equivalent of six months of assessments under Colo. Rev. Stat. § 38-33.3-316(11).³²

For a multi-state operator, collection sequence and foreclosure economics differ enough between states that a notice or process valid in one state can be defective or even barred in another. Vermont's three-month trigger, mandatory payment-plan offer, board-vote prerequisite, and strict-foreclosure redemption clock must each be coded specifically. Vermont's direction of travel is static: no recent statute or appellate decision has materially changed the assessment-collection framework.

Recommendations

For a property manager or association facing a live Vermont delinquency, proceed in this order. First, before treating any account as foreclosure-eligible, confirm two facts: that the community is governed by the VCIOA (created on or after January 1, 1999, or a pre-1999 condominium for which § 3-116 applies by retroactive operation of § 1-204) and that the sum owed equals at least three months of common-expense assessments under the last adopted budget. If the debt falls below that line, foreclosure is statutorily barred; pursue a money judgment instead. Second, document a payment-plan offer and the owner's failure to accept or comply with it, because § 3-116(m) makes that a hard prerequisite, not a courtesy. Third, obtain and minute a board vote to foreclose the specific unit; do not let management or counsel substitute its decision for the board's. Fourth, code the super-priority as a fixed six-month reach-back from the date the enforcement action is filed, and flag the rolling-lien question as unsettled rather than assuming continuing priority. Fifth, calendar the redemption clock by path: six months from the decree in strict foreclosure, and a pre-sale redemption period in judicial-sale foreclosure, with the court empowered to shorten either. The benchmarks that would change this guidance are a Vermont Supreme Court decision resolving the super-priority term or a statutory amendment to § 3-116; either would warrant an immediate update to notice templates. Until then, treat fines-only or fees-only balances as non-foreclosable absent a money judgment and perfected judgment lien under § 3-116(o).

Caveats

Several points carry residual uncertainty. The single largest open question is the term of the six-month super-priority: the statute is silent, Vermont trial courts have split, and no appellate ruling settles it, so any automated calculation should expose the assumption rather than bury it. The redemption and reinstatement mechanics in Section 3D come from Vermont's general foreclosure statutes (12 V.S.A. ch. 172), which are written primarily for mortgage foreclosures; they apply to association liens because § 3-116(j) routes association foreclosures through chapter 172, but some provisions — notably the owner-occupied-residence protections and the mediation program in chapter 163 — are framed around mortgagor-mortgagee relationships and may apply unevenly to association plaintiffs. The distinction between VCIOA communities and pre-1999 condominiums under 27 V.S.A. ch. 15 matters at nearly every step; this page states the VCIOA rule as the default and flags the legacy act where it diverges, but the precise interaction for any given community depends on its creation date and whether its declaration has been amended to adopt the VCIOA in full. Finally, the federal overlays — FDCPA, bankruptcy automatic stay, SCRA — are summarized only; they can independently halt or invalidate an otherwise-compliant state process and should be checked against the forthcoming federal coverage once published.

1. 27A V.S.A. § 3-116 (Lien for sums due association; enforcement), subsections (a), (b), (c) — Vermont Statutes Online ↩
2. 12 V.S.A. § 4941 (Decree foreclosing equity of redemption; writ of possession), subsection (d) — Vermont Statutes Online ↩
3. Vermont Judiciary, Supreme Court Published Opinions and Entry Orders (appeals proceed directly to the Vermont Supreme Court; no intermediate appellate court) ↩
4. 27A V.S.A. § 3-116(e) (recording the declaration constitutes record notice and perfection; no further recording required) — Vermont Statutes Online ↩
5. 12 V.S.A. ch. 172 (Foreclosure of Mortgages), Subchapter 2 (Strict Foreclosure, § 4941) and Subchapter 3 (Foreclosure by Judicial Sale, §§ 4945-4954) — Vermont Statutes Online ↩
6. 27A V.S.A. § 3-116(m) (no foreclosure unless owner owes at least three months of common-expense assessments, has failed a payment plan, and the executive board votes to foreclose the specific unit) — Vermont Statutes Online ↩
7. 27A V.S.A. § 3-116(c) (six-month super-priority window) — Vermont Statutes Online (national comparison points at footnotes 30-32) ↩
8. 27 V.S.A. § 1323 (Priority of lien), Condominium Ownership Act — Vermont Statutes Online ↩
9. 27A V.S.A. § 3-116(j) (lien may be foreclosed pursuant to 12 V.S.A. ch. 172; association shall give statutory notice or reasonable notice to affected lienholders) — Vermont Statutes Online ↩
10. 27A V.S.A. § 3-116(a) (attorney's fees, costs, late charges, fines, interest, and other sums enforceable as unpaid assessments unless the declaration provides otherwise) — Vermont Statutes Online ↩
11. 27A V.S.A. § 3-116(o) (no foreclosure on non-assessment sums alone without a judgment and perfected judgment lien) — Vermont Statutes Online ↩
12. 27A V.S.A. §§ 1-201 and 1-204 (applicability to communities created on or after Jan. 1, 1999; § 3-116 applies retroactively to pre-1999 communities) — Vermont Statutes Online ↩
13. 27A V.S.A. § 3-116(h) (judgment or decree shall include costs and reasonable attorney's fees to the prevailing party) — Vermont Statutes Online ↩
14. 27A V.S.A. § 3-116(k) (no exemption from liability by waiver of common elements or abandonment) — Vermont Statutes Online ↩
15. Bank of America, N.A. v. Morganbesser, Docket No. 675-10-10 Wrcv (Vt. Super. Ct.) (noting Vermont trial courts evenly divided on whether the § 3-116 super-priority continues past institution of the action) — Vermont Judiciary ↩
16. 12 V.S.A. § 511 (six-year statute of limitations for civil actions) — Vermont Statutes Online ↩
17. 27A V.S.A. § 3-116(f) (lien extinguished unless enforcement proceedings instituted within three years after the full assessment becomes due) — Vermont Statutes Online ↩
18. 27A V.S.A. § 3-116(i) (statement of unpaid assessments furnished within 10 business days; binding on association) — Vermont Statutes Online ↩
19. 27A V.S.A. § 3-116(n) (order of application of delinquent owner payments) — Vermont Statutes Online ↩
20. 12 V.S.A. ch. 163 (foreclosure mediation program for owner-occupied dwellings of four units or fewer) — Vermont Statutes Online ↩
21. 12 V.S.A. § 4932(a) (foreclosure actions brought in the Civil Division of the Superior Court for the county where the land lies) — Vermont Statutes Online ↩
22. 12 V.S.A. § 4941 (strict foreclosure requires finding of no substantial value over the debt; court may order judicial sale instead; redemption six months from decree) — Vermont Statutes Online ↩
23. 27A V.S.A. § 3-116(p) (every aspect of foreclosure, sale, or disposition must be commercially reasonable) — Vermont Statutes Online ↩
24. 12 V.S.A. § 4946 (Procedure; redemption period for owner-occupied dwelling or farmland is six months from decree; sale after redemption period expires) — Vermont Statutes Online ↩
25. 12 V.S.A. § 4954 (Procedure following sale; confirmation order, accounting of proceeds, deficiency) — Vermont Statutes Online ↩
26. 12 V.S.A. § 4948 (Reinstatement of mortgage prior to sale, by agreement of the parties) — Vermont Statutes Online ↩
27. Bill Status S.109 (Act 64), "An act relating to miscellaneous judiciary procedures," introduced by Sen. Hashim; Senate message signed by Governor June 12, 2025 — Vermont Legislature ↩
28. 2025 Act 64, Sec. 7, amending 12 V.S.A. § 4937 (attorney's fees; "upon hearing"), As Enacted — Vermont Legislature ↩
29. Will v. Mill Condominium Owners' Ass'n, 2004 VT 36, 176 Vt. 380, 848 A.2d 336 (association foreclosure sales under the VCIOA must be commercially reasonable) — Justia ↩
30. SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014) (NRS 116.3116 nine-month super-priority is true lien priority) — Justia ↩
31. Conn. Gen. Stat. § 47-258(b) (nine-month common-expense super-priority; amended from six to nine months by P.A. 13-156, 2013) — Connecticut General Assembly ↩
32. Cal. Civ. Code § 5720 ($1,800 or 12-months-delinquent threshold before assessment-lien foreclosure); compare Colo. Rev. Stat. § 38-33.3-316(11) (six-months-of-assessments threshold) — California Legislative Information ↩