HOA Assessments & the CFD Buyer

Legal information, not legal advice. Verify against the cited primary sources before acting. Whether the contract-for-deed buyer or the record-title seller is the “owner” the association can assess, sue, and lien turns on each state’s common-interest-community statute (most are versions of the Uniform Common Interest Ownership Act), the assessment-lien priority rules, and the precise wording of the recorded declaration / CC&Rs — all of which vary and are frequently amended. Last verified: 2026-06-08.

• The scenario. A buyer signs a contract for deed (CFD / installment land contract) for a home, condominium unit, or lot inside a planned community or condominium governed by a homeowners’ or condominium association and its recorded Declaration of Covenants, Conditions & Restrictions (CC&Rs). The seller keeps record legal title until payoff — the defining structure of a CFD (installment-land-contract, equitable-title, equitable-conversion) — while the buyer takes possession, lives in the unit, and holds equitable title. The association keeps levying regular and special assessments (dues), enforces the CC&Rs (architectural rules, leasing limits, pets, parking), and — if assessments go unpaid — records an assessment lien and may foreclose it. Three questions immediately collide: (1) Who owes the dues — the buyer in possession, the seller on record title, or both? (2) Does the buyer have standing to vote, run for the board, and demand the association’s records, or are those reserved to the record owner? (3) If assessments go unpaid, can the association’s lien wipe out the whole deal — including the seller’s retained security interest — the way an HOA super-priority lien can extinguish a first mortgage?

• The legal problem it creates for a CFD. A CFD splits the “owner” the CC&Rs and the common-interest-community statute assume is a single person into two — a record-title seller and an equitable-title possessor — and the governing documents almost never say which one they mean. Four doctrines interact:

  1. Who is the statutory “unit owner”/“member”? Most states’ condominium and planned-community law is a version of the Uniform Common Interest Ownership Act (UCIOA) (or the older Uniform Condominium Act). UCIOA defines “unit owner” as “a declarant or other person who owns a unit … but does not include a person having an interest in a unit solely as security for an obligation” (e.g., Del. Code tit. 25, § 81-103(49); Mo. Rev. Stat. § 448.1-103(30)), and defines “security interest” as “an interest in real estate … which secures payment or performance of an obligation,” including mortgages and deeds of trust (Del. § 81-103(43)). A CFD seller retains bare legal title solely as security for the unpaid purchase price — that is the entire economic function of the retained title (equitable-title, seller-carryback-financing, seller-carryback-financing). Read literally, the security-interest exclusion pushes the seller out of the “unit owner” definition and points to the equitable-owner buyer as the statutory unit owner — the same equitable-conversion logic that makes the buyer the “owner” for homestead and property-tax purposes (homestead-and-equitable-owner).
  2. But the CC&Rs and the assessment lien run with the land regardless. CC&Rs are covenants running with the land (or equitable servitudes): they bind every successor who takes the land with notice, by deed or by contract, because they “touch and concern” the land and were intended to run. A buyer who never signed the declaration is still bound — the recorded CC&Rs are constructive notice to anyone acquiring an interest. So both the burden (pay dues, obey rules) and the lien attach to the parcel, independent of who holds record title. The assessment lien is on the unit, and it reaches the unit no matter whether the buyer or the seller is called the “owner.”
  3. Personal liability is separate from the lien — and follows “ownership” at the time the assessment accrued. UCIOA makes each assessment “the personal obligation of the … unit owner at the time the assessment … is made” (e.g., Minn. Stat. § 515B.3-116(e): “The unit owner of a unit at the time an assessment is due shall be personally liable to the association for payment of the assessment levied against the unit.”). If the buyer is the statutory unit owner, the buyer is personally liable. Some states reach the opposite or a both-of-them result by their own definition — Michigan makes both the land-contract vendee and the land-contract vendor “co-owners” who are jointly and severally liable for assessments unless the condominium documents say otherwise (MCL § 559.106(1)); Texas’s planned-community statute defines “owner” narrowly as one who “holds record title,” which on its face puts personal assessment liability on the seller (Tex. Prop. Code § 209.002(6)). The contract between buyer and seller can allocate the economic burden, but it cannot rewrite who the association may pursue — that is set by the statute and the declaration, not the CFD.
  4. The assessment lien can be senior to the seller’s retained interest — and to a first mortgage. Under UCIOA § 3-116, the association’s assessment lien is prior to all other liens except (i) liens recorded before the declaration, (ii) a first security interest recorded before the assessment became delinquent, and (iii) real-estate-tax liens — but the lien is also prior to that first security interest to the extent of the common-expense assessments that came due in the six months before the association sued to enforce (UCIOA § 3-116(b)–(c); Minn. Stat. § 515B.3-116(b)–(c) — a six-month window; some states extend it, e.g. Connecticut’s nine months, Conn. Gen. Stat. § 47-258(b)). This “super-priority” piece is the bomb under a CFD: in a state that allows nonjudicial foreclosure of the assessment lien, a properly foreclosed super-priority lien can extinguish even a first deed of trust — the Nevada Supreme Court so held in SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 130 Nev. 742, 334 P.3d 408 (2014). A CFD seller’s retained title is junior security, no better off than a mortgagee — so an HOA-lien foreclosure on unpaid dues can wipe out the seller’s entire interest in the deal, not just the buyer’s equity.

  The trap, then, has two faces. For the buyer: you are bound by CC&Rs you never signed, you may be the party personally liable for dues, and a leasing/occupancy restriction you didn’t read can defeat your plans. For the seller/operator: if the buyer stops paying dues, the association’s lien — possibly super-priority — threatens the seller’s own security, and depending on the state the association may sue the seller for the buyer’s unpaid dues (Michigan’s joint liability; Texas’s record-owner definition).

• How jurisdictions handle it. The master variable is how the state’s common-interest statute defines “owner”/“unit owner,” layered over the universal rule that CC&Rs and the assessment lien run with the land:

  Posture	Jurisdiction(s)	Effect on the CFD
  UCIOA “unit owner” excludes a holder “solely as security” → equitable-owner buyer is the statutory unit owner	delaware (Del. Code tit. 25 § 81-103(49),(43)), missouri (Mo. Rev. Stat. § 448.1-103(30)), and the UCIOA majority generally (minnesota § 515B.1-103; and most condo/planned-community states)	The CFD buyer is the unit owner: bound by CC&Rs, entitled to membership/voting, and personally liable for assessments (Minn. § 515B.3-116(e)). The seller’s retained title is the excluded “security” interest. Confirm the state’s enacted definition — the exclusion is uniform text but a few states modify it.
  Statute names the land-contract vendee and vendor as co-owners, jointly and severally liable	michigan (MCL § 559.106(1))	Both buyer and seller are “co-owners”; the association may pursue either for unpaid assessments, unless the recorded condominium documents provide otherwise. The operator’s contract allocation does not bind the association.
  ”Owner” defined as the holder of record title	texas (Tex. Prop. Code § 209.002(6), Residential Property Owners Protection Act)	On the statute’s face the seller (record-title holder) is the “owner” the planned-community association assesses and pursues — the buyer’s equitable interest is not named. The seller stays personally on the hook for dues even though the buyer occupies. (CC&Rs still bind the buyer-in-possession as covenants running with the land.)
  Assessment lien is prior to all but recorded-pre-declaration liens, a first security interest perfected before delinquency, and tax liens — plus a limited super-priority over that first security interest	UCIOA states generally — minnesota (§ 515B.3-116(b)–(c), 6 months), connecticut (Conn. Gen. Stat. § 47-258(b), 9 months), missouri (Mo. Rev. Stat. § 448.3-116, 6 months)	The seller’s retained title is junior to the association’s lien to the extent of the super-priority window; unpaid buyer dues can prime and extinguish the seller’s security.
  Nonjudicial HOA-lien foreclosure can extinguish even a first deed of trust	nevada (*[[sfr-investments-v-us-bank-2014	SFR Investments]]*, 130 Nev. 742, 334 P.3d 408 (2014); NRS 116.3116)

  Across every regime, two things hold regardless of the “owner” label: (a) the recorded CC&Rs bind the buyer-in-possession as covenants running with the land (architectural controls, leasing restrictions — which can directly conflict with a CFD or lease-option resale plan — pet/parking rules), and (b) the assessment lien attaches to the unit, so unpaid dues endanger the deal no matter who the association chooses to sue.

• Operator mitigation. The HOA/CFD collision is almost entirely manageable by contract drafting, escrow, and monitoring — and most of the work is the operator’s:

  1. Read the declaration before you sell, and confirm the state’s “owner” definition. Pull the recorded CC&Rs and the governing statute. Determine whether your state makes the buyer the unit owner (UCIOA exclusion — delaware, missouri, the majority), both parties jointly liable (michigan MCL § 559.106), or the record-owner seller the assessed party (texas § 209.002(6)). In a both-liable or record-owner state you remain exposed to the association for the buyer’s unpaid dues regardless of what the CFD says — price and escrow accordingly.
  2. Put the dues obligation on the buyer in writing — and back it with escrow or impound. Make the buyer contractually responsible for all assessments and, because the contract does not bind the association, collect dues through an escrow/impound alongside the installment payment (the same mechanic used for property taxes and insurance — subject-to-and-insurance, homestead-and-equitable-owner). Escrowing dues is the single most reliable way to prevent a super-priority lien from ever accruing against your retained security (UCIOA § 3-116(c)).
  3. Require proof of payment and monitor the association’s ledger. Build a contractual right to demand the association’s statement of account / estoppel certificate periodically, and treat a delinquency as a default event with a cure right before the association’s super-priority window matures. In a nonjudicial-foreclosure state (nevada, SFR) the seller can lose everything fast, so early notice is the whole game.
  4. Reserve the seller’s right to cure the buyer’s delinquency and add it to the balance. Draft the CFD so the seller may advance unpaid assessments to stop a lien foreclosure and add the advance to the contract balance (a protective advance, parallel to curing a senior mortgage default — underlying-mortgage-wrap, acceleration-clause). This keeps the seller’s junior security from being extinguished by the association.
  5. Check the CC&Rs for leasing/occupancy and transfer restrictions before structuring the deal. A “no leasing”/owner-occupancy covenant, a right of first refusal, or a transfer-approval requirement can be read to reach a CFD (an installment sale is a transfer of an equitable interest); confirm the deal does not trip a covenant that lets the association object, fine, or demand approval. Disclose any such restriction to the buyer.
  6. Record the CFD or a memorandum and notify the association of the buyer in possession. Recording gives the buyer’s equitable interest a priority date and constructive notice (recording-and-priority), and notifying the association of the buyer’s occupancy gets dues invoices, lien notices, and rule violations routed to the party who can actually act on them — closing the information gap that lets a small delinquency become a foreclosable lien.

▸ For Sellers / Operators — The compliance-critical facts: (1) Find out who your state calls the “owner.” Under the UCIOA majority the buyer is the unit owner because the seller’s retained title is excluded as a “security” interest (Del. § 81-103(49); Mo. § 448.1-103(30); Minn. § 515B.3-116(e) personal liability) — but michigan makes you and the buyer jointly and severally liable (MCL § 559.106(1)) and texas assesses the record-title owner — you (Tex. Prop. Code § 209.002(6)). In the latter two, the association can come after you for the buyer’s unpaid dues regardless of your contract. (2) The assessment lien can prime your retained security. UCIOA § 3-116 gives the association a limited super-priority ahead of a first security interest (six months — Minn. § 515B.3-116(c); nine in connecticut § 47-258(b)), and in nevada a nonjudicial HOA-lien foreclosure can extinguish even a first deed of trust (SFR Investments, 130 Nev. 742) — so unpaid buyer dues can wipe out your interest. (3) Defenses: put dues on the buyer and escrow them, monitor the association ledger, and reserve a protective- advance right to cure and capitalize the buyer’s delinquency before the super-priority window matures. (4) Check the CC&Rs for leasing/transfer restrictions that a CFD could trip.

▸ For Buyers — You are bound by the recorded CC&Rs the day you take possession, even though you never signed them — they run with the land. In most states you are also the statutory “unit owner” (equitable owner — equitable-title), which means you get the membership, voting, and records rights and the personal liability for dues (Minn. § 515B.3-116(e)). Get the declaration and read the leasing, pet, parking, and architectural rules before you sign — a “no-rentals” or owner-occupancy covenant can defeat your plans. Insist the contract states who pays dues and, ideally, escrow them with your payment so an unpaid balance never matures into a lien that could be foreclosed (in nevada, nonjudicially) and take the home — SFR Investments.

How the rule plays out (worked logic)

• Step 1 — Is the property in a common-interest community at all? Pull the recorded declaration / CC&Rs. If there is no association with assessment authority, this page does not apply. If there is, the CC&Rs bind the buyer-in-possession as covenants running with the land regardless of who holds record title.
• Step 2 — Who is the statutory “owner”? Read the enacted definition. UCIOA’s “unit owner” excludes a holder “solely as security” (Del. § 81-103(49)), which describes the CFD seller — so the equitable-owner buyer is the unit owner and the personally-liable party (Minn. § 515B.3-116(e)). Exceptions: michigan (both jointly liable, MCL § 559.106) and texas (record-title owner, § 209.002(6)).
• Step 3 — Where does the assessment lien sit in priority? UCIOA § 3-116 puts the lien ahead of everything except pre-declaration liens, a first security interest perfected before delinquency, and tax liens — plus a limited super-priority (6 months; 9 in CT) over that first security interest. The seller’s retained title is junior within that window.
• Step 4 — Can the lien be foreclosed nonjudicially against the whole title? In a state like nevada (SFR) the answer is yes, and the foreclosure can extinguish both the buyer’s equity and the seller’s security. Escrowing dues and a protective-advance cure right are the controls.

Primary sources (retrieved 2026-06-08)

• Del. Code tit. 25, § 81-103(49), (43) (Delaware Uniform Common Interest Ownership Act) — “Unit owner” means “a declarant or other person who owns a unit … but does not include a person having an interest in a unit solely as security for an obligation”; “Security interest” means “an interest in real estate or personal property, created by contract or conveyance, which secures payment or performance of an obligation,” including mortgages and deeds of trust. (The seller’s retained title is the excluded security interest; the equitable-owner buyer is the unit owner.) https://www.delcode.delaware.gov/title25/c081/sc01/index.html
• Mo. Rev. Stat. § 448.1-103(30) (Missouri UCIOA) — “Unit owner” means “a declarant or other person who owns a unit … but does not include a person having an interest in a unit solely as security for an obligation.” See missouri. https://revisor.mo.gov/main/OneSection.aspx?section=448.1-103
• Minn. Stat. § 515B.3-116 (Minnesota Common Interest Ownership Act) — (e) “The unit owner of a unit at the time an assessment is due shall be personally liable to the association for payment of the assessment”; (b)–(c) the association’s lien is prior to other liens except those recorded before the declaration, a first mortgage/security interest on the unit, and real-estate-tax liens, with a limited priority over a first mortgage for common-expense assessments that became due, without acceleration, during the six months immediately preceding the end of the owner’s redemption period. See minnesota. https://www.revisor.mn.gov/statutes/cite/515B.3-116
• Mo. Rev. Stat. § 448.3-116 (Missouri UCIOA, lien for assessments) — assessment lien prior to all other liens except (1) liens recorded before the declaration, (3) a mortgage/deed of trust recorded before the assessment became due (with a limited priority over that mortgage not to exceed six months of common-expense assessments), and (4) real-estate-tax/governmental liens. See missouri. https://revisor.mo.gov/main/OneSection.aspx?section=448.3-116
• MCL § 559.106(1) (Michigan Condominium Act) — “Co-owner” means a person … “who owns a condominium unit within the condominium project,” and includes land contract vendees and land contract vendors, who are jointly and severally liable under the act and the condominium documents except as the recorded condominium documents provide otherwise. (Both CFD buyer and seller are co-owners/liable.) See michigan. https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-559-106
• Tex. Prop. Code § 209.002(6) (Texas Residential Property Owners Protection Act) — “Owner” means “a person who holds record title to property in a residential subdivision,” and includes the personal representative of a person who holds record title; § 209.002(1) “Assessment” = “a regular assessment, special assessment, or other amount a property owner is required to pay … under the dedicatory instrument or by law.” (Defines “owner” by record title — on its face the CFD seller.) See texas. https://texas.public.law/statutes/tex._prop._code_section_209.002
• Conn. Gen. Stat. § 47-258(b) (Connecticut Common Interest Ownership Act) — association’s assessment lien is prior to all other liens except liens recorded before the declaration, a first or second security interest recorded before the assessment became delinquent, and real-property-tax/governmental liens; and is also prior to a first security interest to the extent of common-expense assessments … which would have become due in the absence of acceleration during the nine months immediately preceding an action to enforce the lien (a nine-month super-priority). See connecticut. https://www.cga.ct.gov/2024/sup/chap_828.htm
• SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 130 Nev. 742, 334 P.3d 408 (Nev. 2014) — NRS 116.3116(2) (Nevada’s UCIOA § 3-116) gives a homeowners’ association a true super-priority lien that, properly foreclosed, extinguishes a first deed of trust, and Chapter 116 permits nonjudicial foreclosure of the association’s lien. (A CFD seller’s retained title is junior security, no better protected than a first mortgagee.) sfr-investments-v-us-bank-2014 https://law.justia.com/cases/nevada/supreme-court/2014/63078.html
• UCIOA § 3-116 (Uniform Common Interest Ownership Act, official text) — the model lien-for-assessments section: the association has a lien on a unit for any assessment; the assessment is the personal obligation of the unit owner at the time it is made; the lien is prior to other liens except pre-declaration liens, a first security interest perfected before delinquency, and tax liens, with a limited super-priority (the six-month common-expense window) over the first security interest. (Model source; each state’s enacted version controls — cited above for MN, MO, CT, NV.) Confirmed via the Community Associations Institute’s published UCIOA text and the Joint Editorial Board lien-priority report. https://www.caionline.org/advocacy/advocacy-priorities-overview/uniform-common-interest-ownership-act/

Meta

• needs_verification:
  • The precise verbatim UCIOA § 3-116 “personal obligation” sentence and six-month super-priority text from the official Uniform Law Commission / CAI PDF. The CAI and ULC PDFs 403’d / would not render to text this run; the operative content was confirmed from enacted versions (Minn. § 515B.3-116(e) personal liability; Mo. § 448.3-116 and Minn. § 515B.3-116(c) six-month window; Conn. § 47-258(b) nine months) and from CAI’s secondary summary. Re-retrieve the model § 3-116 verbatim before quoting the uniform text as such.
  • Whether each UCIOA state’s enacted “unit owner” definition keeps the “solely as security” exclusion unmodified, and whether courts in those states have actually applied it to hold a CFD vendee (rather than the record-title vendor) the unit owner for assessment/voting purposes. The exclusion is uniform text (Del. § 81-103(49); Mo. § 448.1-103(30)), and the inference (seller’s title = excluded security → buyer is unit owner) is textually strong and parallels the homestead equitable-owner rule (homestead-and-equitable-owner) — but a retrieved CFD-specific holding construing “unit owner” was not pinned this run.
  • Texas — interaction of § 209.002(6) “record title” owner with executory-contract law. Tex. Prop. Code ch. 5 treats a recorded CFD specially and in some respects treats the buyer as the equitable owner (texas); whether a Texas POA may nonetheless assess and lien the record-title seller under § 209.002(6), or whether ch. 5 shifts the assessable “owner” to the buyer, was not resolved against a retrieved Texas case or AG opinion. The condominium statute (Tex. Prop. Code ch. 82, Texas Uniform Condominium Act) may define “unit owner” differently from ch. 209 — confirm which body of law governs the specific community.
  • Michigan § 559.106 application to a planned community vs. condominium. The co-owner / joint-and-several-liability rule is the Condominium Act (MCL ch. 559); a non-condominium Michigan HOA governed by its declaration and general covenant law may allocate liability differently. Confirm the community’s legal form.
  • Standing of the CFD buyer to vote, serve on the board, and inspect records under each state’s act and the specific declaration. The “unit owner = equitable buyer” inference supports buyer standing in UCIOA states, but the declaration may condition membership/voting on record ownership or on registration with the association; per-declaration and per-state confirmation needed.
  • Whether a CFD is a “conveyance”/“transfer” that triggers a CC&R right of first refusal, transfer-approval, or anti-leasing covenant. Treated as a live risk in the mitigation section; not pinned to a retrieved holding construing such a covenant against an installment land contract.
• open_questions:
  • In a UCIOA state where the buyer is the unit owner but the declaration purports to hold the “record owner” liable, which controls — the statutory “unit owner” definition or the declaration’s narrower term? (Cf. Michigan’s “except as the recorded condominium documents provide otherwise,” which expressly lets the documents reallocate.)
  • When an HOA super-priority lien is foreclosed and extinguishes the seller’s retained title (SFR), does the buyer’s payment stream / equitable interest survive against the foreclosure purchaser, or is the entire CFD wiped out? Likely the latter (the lien is on the unit), but the buyer’s restitution/contract claims against the seller are unresolved here.
  • Does a CFD seller who is not the statutory “unit owner” (UCIOA majority) have standing to cure the buyer’s assessment delinquency and to receive notice of the association’s lien action — i.e., is the protective-advance mitigation enforceable against the association, or only contractually against the buyer?
• cross_links: installment-land-contract · equitable-title · equitable-conversion · homestead-and-equitable-owner · recording-and-priority · seller-carryback-financing · underlying-mortgage-wrap · acceleration-clause · subject-to-and-insurance · lease-option-vs-contract-for-deed · intervening-seller-judgment-lien · sfr-investments-v-us-bank-2014 · delaware · missouri · minnesota · michigan · texas · connecticut · nevada
• changelog:
  • 2026-06-08 — Page created. Framed the HOA/CFD collision through four doctrines: (1) UCIOA’s “unit owner” definition excludes a holder “solely as security” (Del. § 81-103(49); Mo. § 448.1-103(30)), pushing the equitable-owner buyer into the statutory-owner role; (2) CC&Rs and the assessment lien run with the land and bind the buyer-in-possession regardless of the “owner” label; (3) personal liability follows the statutory unit owner at accrual (Minn. § 515B.3-116(e)), with state variants — Michigan joint-and-several CFD vendee+vendor liability (MCL § 559.106(1)) and Texas record-title “owner” (Tex. Prop. Code § 209.002(6)); (4) the assessment-lien super-priority (UCIOA § 3-116; Minn./Mo. six months, Conn. § 47-258(b) nine months) that primes the seller’s retained security and, via nonjudicial foreclosure, can extinguish even a first deed of trust (SFR Investments Pool 1 v. U.S. Bank, 130 Nev. 742, 334 P.3d 408 (2014)). Operator mitigation: escrow dues, monitor the ledger, reserve a protective-advance cure right, screen CC&Rs for leasing/transfer covenants, record + notify the association. Verbatim § 3-116 uniform text, per-state retention of the security-exclusion, a CFD-specific “unit owner” holding, and the Texas ch. 5 / ch. 209 interaction flagged under needs_verification.

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Disclaimer. This page is legal information, not legal advice, and may be out of date. Whether a contract-for-deed buyer or the record-title seller is the “owner” an association may assess, sue, and lien — and whether an assessment lien can prime or extinguish the seller’s retained interest — turns on each state’s common-interest-community statute, the precise wording of the recorded declaration / CC&Rs, the form of the community (condominium vs. planned community), and the timing and recording of every interest, all of which change and are fact-specific. Confirm the current statutes, the governing declaration, and that any cited authority is still good law before structuring a deal, escrowing dues, advancing assessments, or relying on lien priority, and consult a licensed attorney and the association in the relevant jurisdiction.