Reader Questions - Banks and Assessments, Unwritten Rules

board members c c & rs community managers h o a homefront reader questions Mar 11, 2013


I have a serious question for you. I will quote to you a paragraph from the [HOA’s] Newsletter: 

“SERIOUS FINANCIAL PROBLEMS: Several homeowners are being foreclosed on therefore the association is losing money. …. The budget is seriously impacted and there will have to be a fees increase or a special assessment to cover these losses.” 

Why are the current homeowners responsible for foreclosed properties and not the lenders or banks that have foreclosed on the properties? How can they legally collect from the current home owners and not go after the banks or lenders that now own the property?

Thank You, 

K., Baldwin Park

Dear E.K.,

If a member defaults on their obligations to the HOA as well as their mortgage, the HOA’s lien is wiped out when the bank forecloses. The association still usually has the option of pursuing the homeowner for a money judgment, unless it has completed its own foreclosure against the residence. Associations should not wait to pursue delinquencies, because the deficit comes out of the pockets of the remaining good paying neighbors.

Banks which foreclose on a HOA residence are not liable for any assessments until the bank becomes the owner. However, if after foreclosure, the bank does not keep the ongoing assessments current, the HOA can and should pursue the delinquent bank the same as any other member.

There is a way to protect some part of the HOA’s lien from bank foreclosure wipeout. Per the Community Associations Institute 19 states have passed “super lien” laws, in which a number of months of assessments are protected from foreclosure, Florida most recently. Should California be next?

Thanks for your question,

Dear Mr. Richardson,

Is there a law that requires the Architectural Control Committee to specify what part or line item of our CC&R’s or Rules and Regulations a homeowner’s violation relates to? I can’t find anything in our CC&R’s, Rules and Regulations, or Bylaws that indicates that the homeowner needs to be advised as to what rule or regulation was violated.

Currently our violation notices being sent out simply state “You are in violation of [HOA’s] CC&R’s and/or Rules and Regulations.” [and please make the following corrections or improvements:]

I would appreciate any information on this subject.


D.M., Irvine

Dear D.M.,

Under Civil Code 1357.110(a), if a “rule” is not in writing, it isn’t legally considered a rule. Many associations have “house rules” which are unwritten or not distributed to the members as a governing document. If the rules are not found in a document which all the members have, then it is not an enforceable rule but is simply a policy.

Regarding discipline, Civil Code 1363(g) requires that, at least ten days before the hearing, the association in writing notify a member of the:

  • hearing date and time
  • nature of the alleged violation, and
  • right to address the board at the hearing,

Incomplete notifications are invalid, and any discipline imposed without full compliance with the procedure is unenforceable. (Section 1363(g), last sentence).

Some associations issue “violation notices” including a “right to appeal” notice, telling members that unless they appeal, the fine on the notice must be paid. Such a procedure violates the law, and should be revised. Don’t wait for a legal challenge. Be fair — and correct it now.

Best regards,

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at All rights reserved®.