How Land Trusts in HOAs Can Affect Collections

In preparation for his upcoming webinar, How to Know if Your HOA is Being Played, Mitch Drimmer shares one way HOAs might get “played” when trying to recover delinquent assessments: land trusts in HOAs. 

In the world of HOA governance and financial management “if it is not one thing, it’s another,” right? Collecting unpaid assessments can be difficult, especially if a homeowner in arrears is trying to loophole their way out of paying what is owed. 

One way to play the association and avoid paying assessments? Land Trusts and Nominated Trustees. 

What is a Land Trust? 

A land trust is a way for someone to own property but keep their name off public records. Instead, they pick someone else, called a trustee, to hold the property title for them. This means the trustee’s name shows up in government records, not the real owner’s name. 

Even though the trustee’s name is on the papers, the real owner (called the beneficiary) still controls everything. They can live there, lease it, rent it out like an Airbnb, sell it, or do anything else an owner would do. 

Who Is a Nominated Trustee? 

A nominated trustee is just someone chosen to hold the title. This could be a friend, a lawyer, or even a company. They don’t really do anything with the property. They are just there to help keep the real owner’s name private. They are a front person with no authority, and in an HOA that can be a problem. 

People use nominated trustees and land trusts for different reasons. Some just want privacy! Some want to make it easier to pass the property to family when they die. Some just want to avoid paperwork. But make no mistake, land trusts and nominated trustees can and have been used to obfuscate information and create challenges for Boards when it comes time to collect unpaid assessments. 

What Does This Mean for HOAs and Condos? 

HOAs and condo associations rely on people paying their fees. These fees keep the community running. But when a property is in land trust, it can make things harder for the HOA in several ways: 

Collections Take Longer 

If the real owner doesn’t pay their fees, the HOA might have to go to court just to figure out who is responsible. That costs time and money. If they send letters to the trustee, the trustee might not respond because they aren’t the real owner. And you can’t rely on legal records either. The property appraiser site will hold the name of the trustee and not the owner. With property owned by a corporation, the name of the registered agent is easily found, and they can be contacted. It’s not so easy with land trusts in HOAs. 

The Real Owner is Hidden 

If the property is in a trust, the HOA only sees the trustee’s name. The trustee may not live there or even know what is going on. The person in charge (the beneficiary) isn’t listed. This means the HOA might not know who to contact when someone stops paying. This puts obstacles to proper notifications and delays these condition precedents. Ultimately, collections can be achieved, but in land trusts the process may be delayed, and community associations need their money on time, every time. 

HOAs Can Still File a Lien and Foreclose 

The Board can still file a lien on land trusts in HOAs. But if the trustee doesn’t inform the real owner, it may not help right away. With many Boards there is a high level of caution, and it is possible that the more complicated a delinquency file may be, the less likely the board is going to pursue it. Until a bold Board is willing to act in a resolute manner, the property could be depleted of equity. And if the HOA needs to foreclose, they must include the owner in the legal papers. But to do so, they need to hunt down the real owner. 

Some People Might Use Land Trusts in HOAs to Avoid Paying 

Sometimes, people use land trusts in HOAs just to make it harder for the Board to collect money. Land trusts let delinquent owners say things like, “It’s not my house, it belongs to the trust,” even though they’re still the real owner behind the scenes. These are the people who understand the level of caution that a Board of directors has and is daring them to act, and in a lot of cases they play a good hand. Due to its complicated nature the costs are higher and that delays a Board’s decision. 

Handling Land Trusts in HOAs

Land trusts in HOAs are legal and can be helpful, but they make it harder for Boards to do their job. They can slow down collections by making it hard to find the real owner, and inevitably will cost the association more money in legal fees.  

If your community is struggling with hidden owners, slow collections, or tricky legal arrangements, watch our webinar, How to Know if Your HOA is Being Played. You’ll hear how Easy Collect helps communities manage cases of shrewd tactics used to delay collections, and how the software supports run-of-the-mill collections cases every day. 

Date: Sept. 23, 2026 

Time: 11am PT / 2pm ET 

Speaker: Mitch Drimmer, CMCA, LCAM 

Register today: How to Know When Your HOA is Being Played