A $977 Debt and a $450,000 Home

A homeowner in Arizona owed his association $977 in unpaid assessments. The debt was real, and every owner has an obligation to pay a fair share of the community’s expenses. But when a $977 delinquency can end in foreclosure on a home worth roughly $450,000, the question changes. It is no longer simply whether the association has a right to collect what it is owed. It is how far an HOA should go to collect it.

That question is getting fresh attention after the case of Toby Newton in Mesa, Arizona. Newton bought his home in 2022. After losing work and falling behind on several quarterly assessments, he accumulated about $977 in unpaid HOA dues. Collection charges and attorney fees followed, and the amount owed grew into several thousand dollars.

In October 2025, the association foreclosed and purchased the property at auction for $8,172.

Read the Arizona case via The Mesa Tribune

The association has obligations

It is tempting to look at this story and conclude that an HOA should simply have forgiven the debt. That's not a realistic answer. HOAs are typically organized as nonprofit corporations. Their boards are responsible for adopting budgets and collecting assessments to pay for the association’s obligations and common expenses. Those assessments pay for roads, roofs, insurance, pools, landscaping, drainage systems, reserves and whatever else the community collectively owns. A board that routinely allows some owners not to pay creates another kind of unfairness: the owners who do pay end up subsidizing those who don't. And once a board decides that assessments are optional for one owner, it may have a much harder time collecting from the next one. So the issue isn't whether an association should collect $977. It has to but when does collecting an assessment become disproportionate to the debt being collected?

There is a distance between sending a delinquency notice and taking someone's home. Payment plans, judgments, liens and other collection remedies can occur with foreclosure sitting at the far end of the process. But that distinction is easy to lose once an account enters a collection system. A $977 delinquency becomes $1,500. Then $3,000. Then attorney fees and court costs accumulate. Eventually the size of the collection machinery can overshadow the debt that started it. Something that began as a small unpaid assessment has become a proceeding against the owner's largest asset.

What Did Arizona Do

Arizona has substantially raised the threshold for HOA foreclosure, from one year or $1,200 in delinquent assessments to 18 months or $10,000, whichever comes first. For planned communities, an association generally cannot foreclose its assessment lien until an owner has been delinquent for 18 months or owes at least $10,000 in assessments. The board must also make reasonable efforts to communicate with the homeowner and offer a reasonable payment plan before filing a foreclosure action.

The change does not erase the debt or prevent an association from collecting what it is owed. The HOA can still pursue collection, and its lien can still protect the claim. What changes is when foreclosure becomes available.

Foreclosure becomes a later-stage remedy for a more serious or prolonged delinquency, putting more distance between an unpaid assessment and the forced sale of someone’s home while leaving other collection tools intact.

Washington draws the line differently

Washington state already places limits on HOA foreclosure, although its threshold is considerably lower than Arizona’s new standard. Under RCW 64.38.100, a homeowners association generally cannot begin foreclosure until the owner owes at least the greater of three months of assessments, or $2,000 in assessments. Fines, late charges, interest, attorney fees and collection costs don't count toward reaching that minimum. Washington also requires delinquency notices and waiting periods, and the board itself must specifically approve foreclosure against the individual lot. The law goes one step further: every aspect of the collection and foreclosure process must be “commercially reasonable.”

Those are useful protections but I cannot help but compare the numbers. Arizona has chosen $10,000 or 18 months while Washington uses three months or $2,000. That difference raises a legitimate policy question for Washington as it continues rewriting and consolidating its common-interest-community laws: Is the current foreclosure threshold high enough? There isn't an obvious number that solves this problem. Set the threshold too high and an association may have to carry a delinquent owner's share for a long time while everyone else continues paying. That can be particularly difficult for a small association with little financial cushion. Set it too low and a relatively small debt can trigger machinery capable of taking an asset worth hundreds of thousands of dollars.

The board still has a choice

Statutes establish what boards may do. Good governance still requires deciding what they should do. A board reviewing a delinquent account isn't simply balancing numbers in an accounts-receivable report. At some point it may be deciding whether several thousand dollars owed to the association justifies putting someone's home at risk. Washington recognizes that distinction by requiring the board to approve foreclosure against a specific property. It can't simply disappear into an automated collection process without a board decision. That's a useful safeguard because it forces human beings back into the process.

Before approving foreclosure, directors can ask questions that a collection ledger cannot. How much of the balance is actually unpaid assessment? How much is attorney fees and collection cost? Has the owner responded? Has a workable payment plan been offered? Are there other realistic ways to collect the debt? And perhaps the simplest question of all: Is what we're about to do proportionate to what we're trying to collect?

That is the part I still have trouble getting past in the Arizona case. Five people can sit around a table and authorize a process that may ultimately cost a neighbor a home over a debt that began at $977. At roughly $450,000, the home was worth about 460 times the amount of the original delinquency.

The debt was real. So was the board’s responsibility to collect it. But those facts do not make the scale of the consequence any easier to square.

Public Attention as Unwanted Attention

The case has drawn wide media attention as can be expected. After The Mesa Tribune reported on it, other outlets like Realtor.com and New York Post also picked up the story. According to 12News Superstition Springs Community Master Association has now agreed to halt the eviction proceedings, allowing Toby Newton and Sherrie Patten to remain in the home. That does not erase what came before: a delinquency that began at about $977, the foreclosure and the association’s acquisition of the property. But it changes the ending. The association ultimately stepped back from eviction.

There is another lesson here. Public attention can still be unwanted attention. Once a private collection dispute becomes a television story, the public is no longer looking primarily at whether the assessments were owed. People are looking at the scale of the response, and by then the HOA is defending not the debt, but the proportionality of what it chose to do.

Owners have an obligation to pay their assessments, and associations need meaningful collection tools. But proportionality should still matter. Responsible governance means matching the response to the problem, and recognizing when the consequences of enforcement have become far greater than the debt itself.

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