HOA Forecloses On a Man’s Home For Just $977

An Arizona homeowner who fell behind on less than $1,000 in homeowners association dues ended up losing his house at a sheriff’s auction after attorney fees, collection costs and additional assessments caused the amount owed to grow into thousands of dollars, according to attorney and podcaster Steve Lehto.

Lehto discussed the case on his Lehto’s Law podcast after reviewing reporting by Mesa Tribune managing editor Cecilia Chan, focusing on how quickly an ordinary HOA debt can become something far more serious when a homeowner falls behind and legal proceedings begin.

The homeowner, 53-year-old Toby Newton, had planned to retire in the southeast Mesa property he purchased in 2022, but Lehto said health problems, unemployment and later medical issues affecting his longtime girlfriend pushed the household into a financial situation from which they struggled to recover.

A $977 Debt Turned Into A Foreclosure Case

Lehto said Newton bought the home in Mesa’s Superstition Springs community and later lost his job in early 2024 before being diagnosed with diabetes.

With Newton unable to work, much of the household’s financial burden fell on his longtime girlfriend, Sherrie Patten, while Newton fell behind on HOA assessments of roughly $171 per quarter.

Newton told the original reporter he missed about a year of payments, leaving an underlying HOA debt that ultimately came to $977.

“I bought the house and then I got sick,” Newton said, according to the account Lehto reviewed. “I got diabetes and I was out of work.”

Newton said he tried to work something out with the association, but in November 2024 the Superstition Springs Community Master Association, acting through its attorney, filed a foreclosure action.

A little more than a week later, the law firm offered to dismiss the lawsuit if Newton paid $3,980.

Lehto emphasized that most of that amount was no longer the original assessment debt but attorney fees and related costs.

That is one of the more troubling features of cases like this: once collection litigation starts, the original balance can quickly become almost secondary to the expenses created by trying to collect it.

Homeowner Says He Tried To Set Up A Payment Plan

Newton initially offered to pay $50 per month in addition to keeping up with his ongoing assessments, but Lehto said the HOA board rejected that proposal in January 2025.

He later increased the offer to $200 per month on top of the regular assessments.

That proposal was rejected as well.

According to the communications described by Lehto, the association then continued seeking judgment rather than accepting either payment arrangement.

By June 30, 2025, a default judgment had been entered in the foreclosure case.

The court also awarded the association $3,345 in attorney fees and interest, another $1,042 in collection costs, and $1,311 in assessments and late fees that had accumulated while the case was moving forward.

By the time the Maricopa County Sheriff sold the property at public auction, Lehto said the HOA-related debt had increased to $6,579.

A financial problem that started below $1,000 had therefore become many times larger before the house itself was sold.

HOA Bought The Home At Auction

Lehto said the property was ultimately sold for $8,172, with the homeowners association placing the highest bid.

Newton had purchased the home in 2022 using a loan of roughly $449,000.

That enormous difference between the value of the property and the foreclosure-related debt is what makes the story so striking, although Lehto noted that an existing mortgage does not simply disappear because an HOA acquires the property.

He suggested that the outstanding mortgage could help explain why the association later appeared willing to sell the property back rather than take on the complications attached to the loan.

Patten said the couple repeatedly tried to resolve the matter.

“We’ve tried to settle multiple times with them, and they refused to work with us,” she said in the reporting Lehto discussed.

The household’s situation became even harder after Patten was diagnosed with an aggressive form of breast cancer in early 2025 and eventually underwent a double mastectomy.

She stopped working and was later approved for long-term disability, leaving the couple dealing simultaneously with foreclosure, medical costs and reduced income.

Fight Shifted To Whether Newton Was Properly Notified

Newton later filed an emergency motion in Superior Court seeking to stop enforcement, arguing that he did not learn about the sheriff’s auction until just two days before it took place.

According to Lehto, Newton claimed that the short notice left him without enough time to hire a lawyer, arrange financing or otherwise attempt to save the home.

He also disputed whether he had been properly served.

Newton said the process server gave documents to Patten’s adult son while Newton himself was away, arguing that the son was only visiting and was not authorized to accept service for him.

The association disputed that account and said the son had indicated that he lived at the property.

Lehto said this service issue could matter because homeowners must receive legally adequate notice before a forced sale, although he cautioned that the broader foreclosure itself may still have been permitted under the law that applied when the action began.

That distinction is important. The case is not simply about whether an HOA can collect unpaid assessments; the more specific fight may turn on whether all required procedures were properly followed before a house was taken to auction.

Arizona Has Since Tightened HOA Foreclosure Rules

Lehto also noted that Arizona law has changed since the foreclosure proceedings against Newton began.

Under legislation enacted in 2025, a planned-community HOA generally cannot foreclose a common-expense lien unless the homeowner remains delinquent for 18 months or owes at least $10,000 in assessments, whichever occurs first. The law also requires reasonable efforts to communicate with the owner and an offer of a reasonable payment plan before foreclosure.

Before that change, Arizona law allowed foreclosure after one year of delinquency or once unpaid assessments reached $1,200.

That means a case beginning today under the newer threshold could look very different from Newton’s, although the precise application of any statute depends on when the debt, lien and foreclosure action arose.

Lehto’s broader warning was that homeowners should never assume HOA dues are merely another small household bill that can be postponed indefinitely.

Lehto Says Buyers Need To Understand HOA Power

Lehto said HOA membership is generally built into the property documents, meaning buyers should know before closing that the home is governed by an association and what obligations come with it.

Those obligations can include recurring dues, increased assessments and even special assessments if the association approves major work or expenses.

He stressed that the amount due today is not necessarily the amount a homeowner will owe years later, because most HOA governing documents allow assessments to increase.

For people considering buying into an HOA, Lehto said the most important thing is to read the documents and understand how much authority the association has before signing.

He acknowledged that many homeowners like HOAs because they enforce appearance standards, maintain common areas and prevent neighbors from allowing properties to deteriorate.

Others strongly dislike them because those same enforcement powers can become financially serious when disputes arise.

Lehto said he previously served on a condominium board himself and remembered situations where owners fell behind, though he did not recall his board ever having to foreclose on someone.

His preference, he said, was always for people to catch up and keep the association operating without escalating matters.

Small Debts Can Become Very Large Problems

Lehto’s final takeaway was not that every HOA will aggressively pursue foreclosure, but that owners should understand what can happen when assessment debt is left unresolved.

In Newton’s case, the original amount was less than $1,000, yet legal fees, collection costs and additional unpaid assessments turned it into a dispute involving the ownership of a home purchased for hundreds of thousands of dollars.

Newton said he was still waiting for a judge to rule on his emergency request and had not decided what he would do next.

Lehto also pointed viewers toward a fundraiser for Newton, something he said he rarely does, because Newton was reportedly close to raising the amount he believed he needed.

The case illustrates why HOA debts can become unusually dangerous compared with many ordinary bills: the association’s claim can attach directly to the property itself, and once litigation begins, the cost of resolving the dispute may grow far beyond the amount that started it.