Reader Questions – They Aren’t Paying!!!

By Kelly G. Richardson, Esq. CCAL

Kelly: A neighbor bought a condo and rents it out, but has not paid ANY HOA fees for over two years!  When she is contacted about the past due fees, she says she will pay them when she wants. The management company says there is nothing that can be done except to lien her property. My guess is she is upside down on the property and just bleeding it as long as she can for the rent money. This means the rest of us owners are having to pay for her portion of fees. Is there really nothing else that can be done? P.L., Cathedral City

Dear P.L.: Although one of the board’s basic obligations is to make sure everyone pays their share of the HOA’s expenses, sometimes a homeowner will strategically refuse to pay. When there is little equity, a homeowner will stop paying mortgage and assessments, figuring there is no consequence to using the property until the bank finally forecloses and wipes out the HOA’s lien. It can be a very frustrating and unfair situation. In those cases, judicial foreclosure – filing a lawsuit to foreclose AND collect on the past due assessments – may shake them out of their stall game. Yes, it involves attorney fees, but a court judgment will follow that owner even after they lose the property to the bank, and the fees normally would also be added to the debt. Talk to your HOA attorney about the options and costs. Thanks, Kelly
 

Dear Mr. Richardson: Our tract has a street which is within the geographic boundary of our HOA but these homeowners have never had to pay dues and nobody seems to know why.  We asked our manager and even they don't know why. So, our question is this: Why aren't those homeowners required to pay HOA dues? Thank-you, RY, Laguna Hills.
 

Dear R.Y.: The obligation to pay assessments comes from the CC&Rs. Has someone checked to see if the CC&Rs were recorded on the properties on that street? Sometimes a particular group of homes are deliberately or accidentally excluded by the developer because the CC&Rs were not recorded on that group of homes. CC&Rs only bind the properties upon which they were recorded. A real estate or HOA attorney should be able to help you conclusively answer the question. Best regards, Kelly

Hello Kelly: Is it possible to create and enforce a reimbursement contract for a homeowner who owes a large assessment on his/her account? This homeowner caused damage to their home, the HOA incurred costs and is seeking reimbursement. The HOA proposed a payment plan; however, we would like to make sure that this payment plan isn’t rescinded or voided with a future board (this will take years to pay off). Is this an acceptable practice? A.O., Irvine
 

Dear A.O.: If you are referencing a reimbursement assessment because a homeowner damaged the common area, hopefully, your HOA followed the process of Civil Code Section 5855 regarding that reimbursement claim. Check with your HOA attorney, but the HOA can most likely enter into a written agreement as to how and when the homeowner will repay the assessment. That agreement might be prepared so it can be recorded against the homeowner’s property, in case they sell the home. Best, Kelly

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