CherieR1
(California)
Posts:2
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| 08/13/2008 6:32 PM |
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Our Board sends out fine letters incorporating language that if a homeowner does not pay the fine, the HOA will file a lien on the homeowner's property. It was my understanding the only time an HOA can lien a homeowner's property in the state of California is for unpaid dues. Am I correct? What governing code would cover lien rights by HOAs. Also, do HOAs have the right of offset, i.e. if your receive a fine and you don't pay the fine, can they offset your dues you paid to pay the fine?
Thanks
CR |
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MicheleD
(Kentucky)
Posts:1865
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| 08/13/2008 6:38 PM |
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| Why not just pay the fine? |
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GlenL
(Ohio)
Posts:1466
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| 08/13/2008 9:12 PM |
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| Cherie the section you are looking for is: Civil Code §1367.1. Notice of Lien; Priority of Payments; Payment Under Protest; Monetary Penalties. The way I read the statute they cannot lien against the fine but can for late charges and interest. I suggest you go to http://www.davis-stirling.com it is a website run by a law firm with excellent searchable entries. Do you have a copy of the HOA's collection policy and does it say how they apply payments? If not request it ASAP they are required to provide it. |
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RW1
Posts:0
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| 08/14/2008 4:50 AM |
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Good factual reply Glen.
You didn't assume the OP was being fined. |
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GeraldT4
Posts:934
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| 08/14/2008 5:26 AM |
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| CherieR1 - From an accounting perspective, I'm not sure why you would offset dues? Dues are receivables to cover payables (expenses). I'm also not sure how you resolve NOT showing a balance due on the dues if you use a portion of what was paid to offset a fine. We all here encourage owners to pay their dues regardless. IMHO, use the dues to cover the dues, and keep on letting the fines accrue until paid. |
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MicheleD
(Kentucky)
Posts:1865
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| 08/14/2008 6:36 AM |
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I didn't assume the original poster was being fined, either.
My question was generic.
Why not pay the fine? |
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GlenL
(Ohio)
Posts:1466
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| 08/14/2008 7:13 AM |
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Gerald it's wise to know just how the money will be applied, there have been too many instances where someone has paid their assessment but for whatever reason not paid a fine or interest and had the money applied first to the fine. Ohio even spelled out the order that monies would be applied in a COA. As you can see dues are the last thing the money is applied to:
5311.18
(2) Unless otherwise provided by the declaration, the bylaws, or the rules of the unit owners association, the association shall credit payments made by a unit owner for the expenses described in divisions (A)(1)(a) and (b) of this section in the following order of priority:
(a) First, to interest owed to the association;
(b) Second, to administrative late fees owed to the association;
(c) Third, to collection costs, attorney’s fees, and paralegal fees incurred by the association;
(d) Fourth, to the principal amounts the unit owner owes to the association for the common expenses or penalty assessments chargeable against the unit.
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GeraldT4
Posts:934
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| 08/14/2008 8:19 AM |
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GlenL - While I find your detail of Ohio procedure to be interesting, it may not be relevant to Cherie in California. In regards to liens, California Davis-Sterling states, "In addition, any payments toward that debt shall first be applied to the assessments owed, and only after the principal owed is paid in full shall the payments be applied to interest or collection expenses."
If the documents spell something different, that prevails. |
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GlenL
(Ohio)
Posts:1466
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| 08/14/2008 8:26 AM |
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| Gerald hence my suggestion that she visit www.davis-stirling.com and asked the question: Do you have a copy of the HOA's collection policy and does it say how they apply payments? |
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GeraldT4
Posts:934
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| 08/14/2008 8:32 AM |
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| GlenL - Why do I need a copy of Cheri's collection policy? I'm not the one posting procedure that takes place in Ohio as if it has anything to do with California. : ) |
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GlenL
(Ohio)
Posts:1466
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| 08/14/2008 8:46 AM |
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Posted By GeraldT4 on 08/14/2008 8:32 AM
GlenL - Why do I need a copy of Cheri's collection policy? I'm not the one posting procedure that takes place in Ohio as if it has anything to do with California. : )
Do you even read the posts before you reply?
You posted: I'm also not sure how you resolve NOT showing a balance due on the dues if you use a portion of what was paid to offset a fine. We all here encourage owners to pay their dues regardless. IMHO, use the dues to cover the dues, and keep on letting the fines accrue until paid.
And I gave an example as to why it was important to know exactly how any monies that were received were applied. I told the OP exactly where to find the information she was seeking for California; however we have people lurking here from all over the country and what applies to her might not to someone from say New Jersey or Idaho or Nebraska or pick a state so it was a generic warning to everyone to know their HOA's collection policy.
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CherieR1
(California)
Posts:2
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| 08/14/2008 8:55 AM |
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| Thanks for the reply. I personally was not fined. Several of the owners receive fine letters with the aforementioned language and they were concerned. |
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GeraldT4
Posts:934
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| 08/14/2008 9:01 AM |
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| GlenL - Yes I read the posts including mine. Sorry to have posted to this subject of which you seem to have taken a territorial response to. I'm well aware of what applies to me in NJ might not apply to Cheri in California. My post that you've copied and pasted is basically a question, and an opinion (IMHO). It was you that posted your procedure in your association. You posted, "As you can see dues are the last thing the money is applied to". When you post things like, "As you can see" it means you are trying to prove some kind of point. Of which there may be none. All fine and good to see how things are done in Ohio, but may be irrelevant to California. |
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KirkW1
(Texas)
Posts:1190
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| 08/14/2008 9:06 AM |
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CR,
To answer your question, you will want to look at your association's collection policy. It should state what order the money will be applied. The next thing is to research the policy and see if it complies with Davis-Sterling and associated acts.
In Texas we can not foreclose on a house for unpaid fines. (We can file a lien though.) Having said that the standard practice is to back door the issue and apply money in an order similar to the following:
1) Interest
2) Collection costs
3) Fines
4) Dues
Thus while a foreclosure can't take place in the first period of dues collection, it can in the second if the fine isn't paid. Because they will apply your money to the fine leaving the dues unpaid and opening the door to foreclosure. At the end of the day, it buys one some time. |
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GeraldT4
Posts:934
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| 08/14/2008 10:59 AM |
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I understand the importance of paying dues and fines on time. In my 10 plus years of living in associations, I've never been fined, nor ever been late with a dues payment.
It's in no one's best interests to place a lien on a home. Especially in today's market. Regardless of ability to do so, there is something inherently wrong with the practice of adopting an accounting procedure that creates an opportunity to lien. In other words, for an owner's account where there are collection costs, fines, etc. the maintenance payment is applied towards everything but the dues first. |
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KirkW1
(Texas)
Posts:1190
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| 08/14/2008 4:24 PM |
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...It's in no one's best interests to place a lien on a home. Especially in today's market. ...
I personally disagree with the thoughts on placing a lien (if it can be done at a reasonable cost). Foreclosing is another issue altogether. But a lien simply makes sure that the HOA gets paid when the house sells. But this is opinion of course. |
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MicheleD
(Kentucky)
Posts:1865
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| 08/14/2008 5:18 PM |
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Posted By KirkW1 on 08/14/2008 4:24 PM ...It's in no one's best interests to place a lien on a home. Especially in today's market. ... I personally disagree with the thoughts on placing a lien (if it can be done at a reasonable cost). Foreclosing is another issue altogether. But a lien simply makes sure that the HOA gets paid when the house sells. But this is opinion of course.
Exactly, Kirk. I'm not sure what "today's market" has to do with it. If anything, I think it's very wise to take whatever steps, "in today's market," that may be necessary to protect the HOAs interests.
We can place a lien, and still try to work out payment plans, etc., with the resident if we need to. We simply release the lien when the payment plan is over and all the outstanding balance is received. But, if something goes wonky, we will still at least have a lien to fall back on if need be.
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FredN
(California)
Posts:11
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| 08/14/2008 6:52 PM |
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| They can fine you and if you do not pay, start the foreclosure process, buy it at a trustee sale, evict you, than sell it....Than some good scams in cali...all legal... |
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MicheleD
(Kentucky)
Posts:1865
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| 08/14/2008 7:47 PM |
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Posted By FredN on 08/14/2008 6:52 PM
They can fine you and if you do not pay, start the foreclosure process, buy it at a trustee sale, evict you, than sell it....Than some good scams in cali...all legal...
hmm.
How can they start the foreclosure process if they don't lien first?
Or is that what you are saying?
Liens don't always end in foreclosure.
We've never foreclosed. I can't imagine we'd ever foreclose.
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GeraldT4
Posts:934
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| 08/15/2008 5:28 AM |
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| Oops, my bad, I meant foreclose, not lien. Now disagree to your hearts content. |
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CharlieM
(California)
Posts:4
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| 08/15/2008 7:29 AM |
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| I am the President of our HOA of a custom home community in California. I have been very active in the re-drafting of our documents. On this subject I have have discovered that you can lien a home with outstanding fines, but you can not foreclose on a home if the fines are not paid. You can only foreclose on assessments, which include dues, I believe that are overdue by 180 days or $1800. I would have to review the time and amount to be certain but they are in the ball park. |
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MaryA1
(Arizona)
Posts:2498
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| 08/15/2008 7:46 AM |
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| In AZ, to foreclose it's one year or 1,200, whichever comes first and foreclosure cannot be for unpaid fines for CCR violations. All you can do to collect those is obtain a judgment so collection can be made when the home sells. |
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HaroldS
(Arizona)
Posts:904
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| 08/15/2008 8:22 PM |
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| "All you can do to collect those is obtain a judgment so collection can be made when the home sells." You missed a step Mary: They must lien the judgment in order to collect on it when the home sells. |
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TonyM3
(Arizona)
Posts:140
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| 08/15/2008 9:45 PM |
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| You could garnish wages to satisfy a personal judgement. |
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JaneK
(California)
Posts:175
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| 08/16/2008 10:50 AM |
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CA law does not allow foreclosure for fines. Lein and collect the fine at sale.
Jane |
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MaryA1
(Arizona)
Posts:2498
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| 08/16/2008 2:16 PM |
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Posted By HaroldS on 08/15/2008 8:22 PM
"All you can do to collect those is obtain a judgment so collection can be made when the home sells." You missed a step Mary: They must lien the judgment in order to collect on it when the home sells.
Harold,
Are you saying they must first record a lien b/4 obtaining a judgment in a civil suit? Because that is not what the statute says. It says: ". . .after the entry of a judgment in a civil suit for those fees, charges, late charges, monetary penalties or inteest from a court of competent jurisdiction and the recording of that judgment inthe office of the country recorder as otherwise provided by law."
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HaroldS
(Arizona)
Posts:904
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| 08/16/2008 10:44 PM |
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| Mary How could they place a lien before a judgment? That would be a false lien and subject to $5,000 fine. I said you must lien the judgment before they can collect at sale. The title company would then pick up the lien and withhold the funds. Your comment was to get a judgment and then collect at sale - with no mention of having to file a lien on that judgment. |
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