1367 Lien For Delinquent Assessments

Delinquent Assessment Lien

ASSESSMENT IS DEBT OF OWNER

§ 1367. Lien for delinquent assessments

(a) A regular or special assessment and any late charges, reasonable costs of collection, and interest, as assessed in accordance with Section 1366, shall be a debt of the owner of the separate interest at the time the assessment or other sums are levied. Before an association may place a lien upon the separate interest of an owner to collect a debt which is past due under this subdivision, the association shall notify the owner in writing by certified mail of the fee and penalty procedures of the association, provide an itemized statement of the charges owed by the owner, including items on the statement which indicate the principal owed, any late charges and the method of calculation, any attorney’s fees, and the collection practices used by the association, including the right of the association to the reasonable costs of collection. In addition, any payments toward such a debt shall first be applied to the principal owed, and only after the principal owed is paid in full shall such payments be applied to interest or collection expenses.

(b) The amount of the assessment, plus any costs of collection, late charges, and interest assessed in accordance with Section 1366, shall be a lien on the owner’s interest in the common interest development from and after the time the association causes to be recorded with the county recorder of the county in which the separate interest is located, a notice of delinquent assessment, which shall state the amount of the assessment and other sums imposed in accordance with Section 1366, a legal description of the owner’s interest in the common interest development against which the assessment and other sums are levied, the name of the record owner of the owner’s interest in the common interest development against which the lien is imposed, and, in order for the lien to be enforced by nonjudicial foreclosure as provided in subdivision (d) the name and address of the trustee authorized by the association to enforce the lien by sale. The notice of delinquent assessment shall be signed by the person designated in the declaration or by the association for that purpose, or if no one is designated, by the president of the association, and mailed in the manner set forth in Section 2924b, to all record owners of the owner’s interest in the common interest development no later than 10 calendar days after recordation. Upon payment of the sums specified in the notice of delinquent assessment, the association shall cause to be recorded a further notice stating the satisfaction and release of the lien thereof. A monetary penalty imposed by the association as a means of reimbursing the association for costs incurred by the association in the repair of damage to common areas and facilities for which the member or the member’s guests or tenants were responsible may become a lien against the member’s separate interest enforceable by the sale of the interest under Sections 2924, 2924b, and 2924c, provided the authority to impose a lien is set forth in the governing documents. It is the intent of the Legislature not to contravene Section 2792.26 of Title 10 of the California Code of Regulations, as that section appeared on January 1, 1996, for associations of subdivisions that are being sold under authority of a subdivision public report, pursuant to Part 2 (commencing with Section 11000) of Division 4 of the Business and Professions Code.

(c) Except as indicated in subdivision (b), a monetary penalty imposed by the association as a disciplinary measure for failure of a member to comply with the governing instruments, except for the late payments, may not be characterized nor treated in the governing instruments as an assessment which may become a lien against the member’s subdivision interest enforceable by the sale of the interest under Sections 2924, 2924b, and 2924c.

(d) A lien created pursuant to subdivision (b) shall be prior to all other liens recorded subsequent to the notice of assessment, except that the declaration may provide for the subordination thereof to any other liens and encumbrances.

(e) After the expiration of 30 days following the recording of a lien created pursuant to subdivision (b), the lien may be enforced in any manner permitted by law, including sale by the court, sale by the trustee designated in the notice of delinquent assessment, or sale by a trustee substituted pursuant to Section 2934a. Any sale by the trustee shall be conducted in accordance with the provisions of Sections 2924, 2924b, and 2924c applicable to the exercise of powers of sale in mortgages and deeds of trusts.

(f) Nothing in this section or in subdivision (a) of Section 726 of the Code of Civil Procedure prohibits actions against the owner of a separate interest to recover sums for which a lien is created pursuant to this section or prohibits an association from taking a deed in lieu of foreclosure.

(g) This section only applies to liens recorded on or after January 1, 1986.

Added Stats 1985 ch 874 § 14. Amended Stats 1986 ch 9 § 3, effective February 25, 1986.
Amended Stats 1996 ch 1101 § 4 (AB 1317).

ANNOTATIONS

Former Sections:
Former § 1367, similar to present Prob C §§ 6174, 6409, was enacted 1872, amended Code Amdts 1873-74 ch 612 § 176, and repealed Stats 1931 ch 281 (Prob C § 1700).
Amendments:
1986 Amendment:
Added subd (f).
1996 Amendment:
(1) Added the second and third sentences of subd (a); (2) amended subd (b) by (a) adding “legal” after “Section 1366, a” in the first sentence; (b) adding “, and mailed in the manner set forth in Section 2924b, to all record owners of the owner’s interest in the common interest development no later than 10 calendar days after recordation” in the second sentence; and (c) adding the fourth and fifth sentences; (3) added subd (c); (4) redesignated former subd (c) to be subd (d); (5) amended the first sentence of subd (e) by adding (a) “After the expiration of 30 days following the recording of”; and (b) “, the lien” after “subdivision (b)”; and (6) redesignated former subds (e) and (f) to be subds (f) and (g).
Historical Derivations:
Former § 1356, as added Stats 1963 ch 860 § 3.
Collateral References:
Miller & Starr, Cal Real Estate 2d § 20:43
Forms:
Cal Forms Pl & Practice (Matthew Bender) ch 124 “Condominiums and Other Common Interest Developments” Form No. 8
Law Review Articles:
Review of 1985 legislation. 17 Pacific LJ 761
Assessments for condominiums. 37 SCLR 98
Ownership, assessment, and voting rights as to condominium housing. 17 Stan LR 845

NOTES OF DECISIONS

NOTES OF DECISIONS
A second deed of trust had priority over a later-recorded homeowner association assessment lien (CC § 1367), notwithstanding preexisting covenants, conditions and restrictions on the property that recited a “present lien” with power of sale to secure payment of such assessments. Accordingly, the purchaser of a condominium at a nonjudicial foreclosure sale held pursuant to an assessment lien that was recorded in 1997 bought the property subject to a 1992 second deed of trust as a matter of law. Thaler v Household Finance Corp. (2000, 1st Dist) 80 Cal App 4th 1093, 1099, 95 Cal Rptr 2d 779