Committee backs limits on HOA foreclosures tied to fines and short delinquencies

House Bill 440, which would restrict homeowner association foreclosures in several situations, received a do-pass recommendation from the Consumer & Public Affairs Committee.

Sponsor Representative Luhan and Maestas said the bill is narrowly tailored to protect homeowners from foreclosure over relatively small debts and fines. The draft prohibits an HOA foreclosure when the debt is under $5,000, under 12 months delinquent or consists solely of fines.

Supporters including a registered lobbyist for the New Mexico Association of Realtors and several homeowners said HOAs sometimes use aggressive legal tactics — including attorney fees and rapid foreclosure threats — that can leave longtime owners, often seniors on fixed incomes, facing loss of their homes. One Zoom witness said legal fees in her case exceeded $57,000.

Opponents were limited at the hearing; committee members asked about the $5,000 threshold and whether that figure is the right balance between protecting homeowners and allowing associations to collect legitimate dues and assessments. Sponsors said they considered other states' approaches when setting the threshold but encouraged further discussion.

The committee voted 4–2 to advance the bill. Supporters said the measure preserves standard debt-collection tools such as liens and suits while limiting foreclosure as a collection tool for small or fines-only debts.