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Bill Summary · HB 440

Summary — HB 440: Homeowners Association Liens

Status: Action postponed indefinitely
Introduced: November 12, 2024
Primary sponsors (per fiscal note): Representative(s) Lujan and Maestas
Subject area: Property law — homeowners association (HOA) liens and foreclosures

Main purpose

HB 440 would limit when a homeowners association may initiate a foreclosure based on an HOA lien. The bill’s intent is to prevent HOAs from using foreclosure as a remedy for small, recent, or fines-only assessments, giving homeowners more time and protection before loss of title is pursued.

Key provisions

  • Prohibits an HOA from initiating a foreclosure on a lien if the lien meets any of these conditions:
    • The lien is less than 12 months old; or
    • The total amount of the lien is less than $5,000; or
    • The lien consists solely of fines (i.e., assessments that are exclusively fines rather than unpaid regular assessments).
  • The bill does not prohibit HOAs from levying assessments or fines or from pursuing non-foreclosure collection remedies (e.g., collections actions).
  • The bill does not, in its current form, place express limits on attorney’s fees or other costs that HOAs may add to homeowner accounts during collections and foreclosures.

Who would be affected

  • Homeowners in communities governed by HOAs: particularly those with relatively small arrearages, recent delinquencies, or accounts composed only of fines.
  • Homeowners facing aggressive collection practices: homeowners would have a guaranteed period (12 months) and protection for small balances before foreclosure is an available remedy.
  • Homeowners associations and their legal/collections contractors: restricts a commonly used enforcement tool (foreclosure) in specified circumstances.
  • Secondary effects could include collection practices (e.g., increased use of non-foreclosure remedies or accelerated attorney collection efforts), depending on whether the bill limits fee recovery (the bill as drafted does not).

Fiscal impact

  • The Legislative Finance Committee (New Mexico) reported no fiscal impact to the state or recurring operating costs. The Office of Housing similarly indicated no state fiscal effect.
  • The Office of Housing recommended considering limits on charging attorney’s fees to homeowners, which could affect private enforcement costs but not state finances.

Effective date and procedural notes

  • The bill as analyzed contains no explicit effective-date clause; the fiscal analysis indicates it would become effective 90 days after adjournment (estimated June 20, 2025) if enacted.
  • Current status recorded here: action postponed indefinitely (the measure is not advancing at this time).

Issues and considerations

  • The bill aims to reduce foreclosures for relatively small or recent HOA debts and fines-only accounts, but does not address:
    • How collections short of foreclosure are to be enforced;
    • Whether HOAs may charge or collect attorney’s fees and costs that could increase balances above the $5,000 threshold;
    • Interaction with mortgage lenders’ rights where HOA liens and mortgage liens intersect (not changed by this bill text as analyzed).
  • Stakeholders (HOAs, homeowners, lenders, housing advocates) may debate thresholds ($5,000, 12 months) and whether additional consumer protections (caps on fees, notice/mediation requirements) should be included.

If you want, I can:
- Draft a one-page one-sentence “bill explainer” for a homeowner audience, or
- Prepare a short comparison showing how current law vs. HB 440 would treat typical delinquency scenarios (e.g., unpaid dues of $3,000; fines-only $1,200; $6,000 twelve months delinquent).

Compiled from official sources — confirm details with the bill’s official record.

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