No Billing Statements; Board Changes Collection Rules

By Kelly G. Richardson, Esq. CCAL

Hi Kelly, we recently purchased a unit in a small development that does not send out monthly statements. I find this rather strange as they sent me a letter saying that my monthly dues are due at the first of the month. How am I supposed to know if they received my payment (sent by check) and that I do not incur any unknown assessments or late fees? I receive monthly statements for just about anything I have an account with. Is there a law or ruling that requires HOA management companies to provide a monthly statement to the homeowners? M.F., Solvang

Dear Mr. Richardson: I just learned from the manager on behalf of the HOA that monthly fee/dues statements are a courtesy. In other words I am responsible to pay without a bill?? Is this true?? J.K., Anaheim

Dear M.F. and J.K.: The HOA is not currently required by law to send out monthly invoices stating the amount and due date of regular assessments. Many management companies make this a customer service practice, but it is not required. The law provides homeowners some important information and protection regarding their payment of assessments.

Civil Code Section 5615 requires owners to be individually notified (by mail unless the homeowner has opted otherwise) at least 30 but not more than 60 days prior to the increased assessment becoming due.  So, you will always know the due date of any changed assessment well in advance. 

The address for overnight payment of assessments must be disclosed in the HOA’s Annual Policy Statement, per Civil Code Section 5655, which also requires HOAs to provide a receipt of payment if the owner requests it.

The due date of assessments if typically the first of the month but should be disclosed in the HOA’s Annual Policy Statement, which per Civil Code Section 5310(a)(7) requires HOAs to publish a written statement of assessment delinquency policies and practices. Civil Code Section 5650(b) says that unless the CC&Rs allow a longer time, they are delinquent 15 days after becoming due.

Best regards, Kelly

Dear Kelly, can HOAs unilaterally make a change to billings and collection policy relating to when payments are due, as it can have a material effect on an individual member’s finances/cash flow and is not what was agreed to when joining the association? To me the action is no different than if your mortgage or auto lender wanted to accelerate your payments - Granted there’s language in those agreements that prohibit it. J.B., San Clemente

Dear J.B.: The HOA board establishes and revises the HOA’s assessment delinquency policies and practices, which are required to be disclosed annually as part of the association’s Annual Policy Statement. However, revising this document is not necessarily an operating rule change requiring the 2-step 28-day notice procedure of Civil Code Sections 4360 and 4365. Civil Code 4355(a)(4) requires boards to use the 2-step 28-day process for changes in the standards of assessment repayment plans the HOA accepts. Otherwise, board can change those policies and procedures in any open board meeting, after announcing the subject on a posted agenda. Thanks for your question, Kelly.

[Readers: The only official Davis-Stirling Act website is www.leginfo.legislature.ca.gov. All other web sites are by law firms or other interested organizations]