Reader Questions - Collecting After Foreclosure, E-mail Notices

Mr. Richardson,

If a member is delinquent on their monthly assessment and goes through foreclosure and the bank takes over the home does the bank pay the assessment moving forward? Is the HOA out the delinquent assessments?

J.L., Lompoc

Dear J.L.,

If a member is delinquent to their mortgage lender and their association, and the lender completes a foreclosure sale of the home, the association’s lien against the member’s property is wiped out by that foreclosure. However the homeowner still owes the association, because the debt is not erased. The association can pursue a lawsuit or a small claims court action against the former owner to recover the delinquency. However, discuss with your manager and legal counsel whether such a pursuit is worth it – sometimes a judgment can be difficult to enforce if the person cannot be found or has no assets or income.

As to the lender, it is obligated to pay assessments from the moment it takes ownership, as it is now a member of the association.

Hope this helps,
Kelly

Dear Kelly,

I imagine our condo building has the same issues as other small condo complexes. We have problems getting people to participate. No one wants to be on the HOA Board, hardly anyone attends meetings and it’s impossible to get volunteers to help when things come up.

My question is considering everyone has e-mail now…. is it permissible to send notifications such as HOA dues increases, minutes and other notices via e-mail verses traditional mail? There are so few of us running things. We’ve notified everyone a year ago that we need their cooperation to let us use e-mail. No one objected. Are we breaking some sort of law by not sending notices via traditional mail?

Thank you,

L.Z., Los Angeles

Dear L.Z.,

The good news is that the Davis-Stirling Act is keeping up with technology, and when the California Law Revision Commission reorganized the Act (which became effective in January 2014), there is now the option for homeowners to agree to receive e-mail notices instead of mail or paper copies. Civil Code Section 4040(a)(2) allows the HOA to send a homeowner notices by e-mail if the owner has in writing consented to this.

This statute can really help associations save money as well as resources. Your association can send out to all the members a simple e-mail consent form, confirming the e-mail address and the homeowner’s agreement to accept e-mail communications instead of postal mail. Hopefully most homeowners will send back the consent form, and the cost savings might make it worthwhile to follow up with the homeowners who do not reply.

For general notifications under Civil Code Section 4045 (notices which do not require individual mailing, but a more general posting in the community), an increasing number of associations are creating and using a web site unique to their association. Make sure that your association modifies its disclosures to announce that general notices are posted on the HOA web site (and hopefully a central bulletin board somewhere).

Remember, although e-mail is so widespread, HOA boards are not permitted to discuss HOA business in e-mail. That is prohibited by Civil Code Section 4910(b)(1). The exception is emergency situations, allowed by subpart (2) of that section.

Thanks,
Kelly

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 www.hoahomefront.com. All rights reserved®.