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Subject: Garnish wages for HOA dues???
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Author Messages
MarkM19


Posts:0


01/24/2010 2:34 PM  
I saw this mentioned in a thread last night and had a hard time sleeping. We have a big problem with a small percentage of our owners who are not paying dues. In some cases over $5,000 or more. I know it should not have gotten that bad before acting. I am new to the Board and have taken this on as my mission.

My question is simply has anyone had success garneshing wages? If so how do you find out the current employer?

I want to tell all who read this how much I appreciate your views and input. This is so nice to have a place where we can pick each others brains to figure out how to deal with the situations we are forced to handle.
MicheleD
(Kentucky)

Posts:4491


01/24/2010 5:41 PM  
In Kentucky we can only garnish the wages if we have a judgment against the individual. We haven't done it yet, but our lawyer indicates that would happen if we go to small claims court to obtain a judgment.

I know you say you guys don't have a lot of money right now, but it might be in your best interests to investigate how your organization can do that in your state.

I was told that we would have to represent ourselves in court, so paying a lawyer wouldn't be necessary, and that it's mostly "form driven" in that we would just fill out some forms and pay a nominal fee to file the cases. Plus, we can "bundle" and file several claims under one action.

But, again, I haven't actually done that yet, and your state/local laws may be slightly different.
TimB4
(Virginia)

Posts:8956


01/24/2010 5:48 PM  
Mark,

I'm not a lawyer and I don't work within the legal community. I did a quick Google search and got this information from the California Courts self help web site:

http://www.courtinfo.ca.gov/selfhelp/smallclaims/collectmoreways.htm#garnish




Am I able to collect (called "garnish") from the debtor's wages if he or she is employed?

Yes. You're entitled to collect up to 25% of the amount over the federal minimum wage that the debtor earns that is not otherwise exempt. For information about garnishing wages and exemptions, check out Civil Procedure Code sections 706.010 This is an external link. Click this icon for our external linking policy. through 706.154 This is an external link. Click this icon for our external linking policy. and 15 U.S.C. sections 1671 through 1677 This is an external link. Click this icon for our external linking policy. (Restrictions on Garnishment).

You'll need the court to issue a Writ of Execution (form EJ-130). You'll then need to prepare an Application for Earnings Withholding Order (form WG-001). In many counties you'll need to hire a process server to serve the employer with the necessary papers that are used to complete the wage garnishment. Check with the small claims legal advisor or sheriff/marshal This is an external link. Click this icon for our external linking policy. for more information. The Application for Earnings Withholding Order serves as the written instructions to the sheriff.




As I read it, you may garnish the wages but will need a court order to do so. I would suggest that you contact your Associations lawyer for specifics.

Tim
MarkM19


Posts:0


01/24/2010 6:59 PM  
Thanks Guys, I appreciate your comments and your support. I will let you know the outcome.
JackieB
(California)

Posts:198


01/26/2010 1:19 PM  
I have a CA small claims question.....sort of along the same trail here.
Our PM has a small claims ct date set for end of Feb.. She has asked that
a member of the BOD accompany her, even though she has the support of signed
documentation that the HO's were given an opportunity to submit a pay-plan that
would be their budget...but didn't. This is close to $5,000 in non-payment assessments. Is this standard for other CA HOA's, to go to court with the PM representative? There is nothing special about this particular case, just the
first time we are using small claims court. Advice??
TimB4
(Virginia)

Posts:8956


01/26/2010 11:18 PM  
Jackie,

My understanding of small claims court is that the individual and not a representative needs to attend. If your PM is not a member of the Board, a board member should attend.

Here are some links that may help:

CA Consumer Affairs: The Small Claims Court A Guide to Its Practical Use

CA Courts Self Help: Small Claims Basics


Hope this helps,

Tim

GlenL
(Ohio)

Posts:5091


01/27/2010 12:49 AM  
Jackie to save time & money you should ask the HOA attorney whether or not a PM or Board member can represent the HOA in a small claims matter; each state has different rules for SC so it’s better to ask first.

We went the SC route over some damage that was done to our exercise room and received a default judgment when the other party didn’t show. They then had it overturned because we had no right to represent the Corporation even though we were duly elected officers of the corporation and had to do it all over again with the Association’s attorney present.

"Common sense is like deodorant--the people who need it most never use it."
TimB4
(Virginia)

Posts:8956


01/27/2010 3:51 AM  
Glen,

Was that because the court wanted the registered agent vs. the board?

Tim
GlenL
(Ohio)

Posts:5091


01/27/2010 5:57 AM  
Tim,

I don’t think so; our MC is the registered agent but to be honest I just don’t remember as it was years ago.

"Common sense is like deodorant--the people who need it most never use it."
MaryA1


Posts:0


01/27/2010 6:48 AM  
Jackie,

The best way to get an answer to your question is to call the small claims court. They should be able to tell you who must be present and who can or cannot be a rep of the HOA.
DonN
(Michigan)

Posts:357


01/27/2010 8:48 AM  
Normally, small claims courts are used for personal debt. Typically, the CC&Rs specify that the dues are billed against the property unit and "run with the land". Unpaid dues become a lien on the property. The remedy is foreclosure. Consequently, one can argue that the small claims court is not a valid venue since the unpaid dues are not a personal debt.

Some CC&Rs recognize this situation and state that the unpaid dues are also a personal debt of the owners. You could try an internet search with various combinations of CC&Rs, lien, personal debt, dues, assessments, ... . You should be able to identify some CC&Rs that have the personal debt provisions.

This has some analogies to mortgages and personal notes. Normally, a mortgage is recorded. The remedy for non-payment is foreclosure. However, lenders usually require that a personal note also be signed. This allows the lender to also use debt collection methods in civil court.

Don Nordeen
Governance of Property Owners Associations
MicheleD
(Kentucky)

Posts:4491


01/27/2010 9:37 AM  
Don, you mean governing documents with wording such as this:

Section 4. Assessments; Creations of the Lien and Personal Obligation. Each lot owner, except Developer, by acceptance of deed for the lot, whether or not it shall be so expressed in such deed, covenants and agrees to pay to the Residents Association (i) annual assessments of charges, and (ii) special assessments for improvements, such assessments to be established and collected as provided in this Article IV. Developer shall be responsible for the maintenance costs of the Residents Association by the lot owners, until Developer transfers control of the Residents Association. The annual and special assessments, together with interest, costs and reasonable attorney fees, shall be a charge on the land and shall be continuing lien upon the property against which each such assessment is made. Each such assessment, together with interest, costs and reasonable attorney fees, shall also be the personal obligation of the person who was the owner of such property at the time when the assessment fee due. The personal obligation for delinquent assessments shall not pass to his successors in title unless expressly assumed by them.
DonN
(Michigan)

Posts:357


01/28/2010 2:47 AM  
MicheleD re your post on 01/27/2010 12:37 PM

The example you provide is one that makes non-payment of an assessment a personal debt as well as a lien on the property unit. As such, the personal debt can be claimed in civil court.

There still could be a venue issue if the property is not the primary residence of the owner. Some states require that a civil action be brought in the county of the defendant. This could be a common occurrence if the development is a resort of second homes. It could also apply to vacant lots.

The venue issue could also be addressed in the CC&Rs if the state law permits the venue to be specified by contract. Otherwise, state law concerning venue would apply.

Don Nordeen
Governance of Property Owners Associations
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Forums > Homeowner Association > HOA Discussions > Garnish wages for HOA dues???



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