Q: Chris J.- I just received a pre-lien notice from my Association, which states that if I don’t bring my account current I will not only have a lien placed on my home, but the Association may foreclose on my home. Is that even legal or is it simply a threat to get me to pay?
Dr. HOA: This is a great question that we hear often and one that most homeowners living in Associations are unclear about. Pursuant to California Civil Code, Homeowner Associations have the legal right and responsibility to lien properties and even foreclose if the delinquent balance reaches $1,800 or is one-year delinquent (whichever comes first). Even before the $1,800 or 12-month threshold is reached, the Association can still seek and recover unpaid assessments by obtaining a judgment in small claims court.
Furthermore, Associations may pursue either a non-judicial foreclosure or a judicial foreclosure. Non-judicial foreclosures are the most common type and the method banks typically pursue to secure their financial interest by taking possession of the property. Alternatively, a judicial foreclosure goes further by enabling an Association to go to court and request a personal money judgment in addition to a foreclosure judgment, whereby the Association has the right to either foreclose on the home or pursue the money judgment, whereby a lien is placed on one’s bank account and the Association may garnish wages. A personal money judgment is good for 10 years and can be renewed for 10-year periods, indefinitely. If you are behind on assessments and late fees and penalties are making it difficult, if not impossible, to pay your outstanding balance, I recommend requesting a meeting with your Board of Directors in a private Executive Session Meeting to discuss a potential payment plan. Boards often consider requests to waive or reduce a portion of the fees and penalties once an account is paid in full. They may also agree to cease late fees, penalties and foreclosure action as long as there is adherence to the agreed upon payment plan approved by the Board of Directors.
If you are one of the millions of Americans being forced to prioritize which accounts get paid, I recommend moving your Association assessment payments near the top of the list.