CIVIL CODE
SECTION 5650-5690
Assessment Payment and Delinquency
5650. (a) A regular or special assessment and any late charges,
reasonable fees and costs of collection, reasonable attorney's fees,
if any, and interest, if any, as determined in accordance with
subdivision (b), shall be a debt of the owner of the separate
interest at the time the assessment or other sums are levied.
(b) Regular and special assessments levied pursuant to the
governing documents are delinquent 15 days after they become due,
unless the declaration provides a longer time period, in which case
the longer time period shall apply. If an assessment is delinquent,
the association may recover all of the following:
(1) Reasonable costs incurred in collecting the delinquent
assessment, including reasonable attorney's fees.
(2) A late charge not exceeding 10 percent of the delinquent
assessment or ten dollars ($10), whichever is greater, unless the
declaration specifies a late charge in a smaller amount, in which
case any late charge imposed shall not exceed the amount specified in
the declaration.
(3) Interest on all sums imposed in accordance with this section,
including the delinquent assessments, reasonable fees and costs of
collection, and reasonable attorney's fees, at an annual interest
rate not to exceed 12 percent, commencing 30 days after the
assessment becomes due, unless the declaration specifies the recovery
of interest at a rate of a lesser amount, in which case the lesser
rate of interest shall apply.
(c) Associations are hereby exempted from interest-rate
limitations imposed by Article XV of the California Constitution,
subject to the limitations of this section.
5655. (a) Any payments made by the owner of a separate interest
toward a debt described in subdivision (a) of Section 5650 shall
first be applied to the assessments owed, and, only after the
assessments owed are paid in full shall the payments be applied to
the fees and costs of collection, attorney's fees, late charges, or
interest.
(b) When an owner makes a payment, the owner may request a receipt
and the association shall provide it. The receipt shall indicate the
date of payment and the person who received it.
(c) The association shall provide a mailing address for overnight
payment of assessments. The address shall be provided in the annual
policy statement.
5658. (a) If a dispute exists between the owner of a separate
interest and the association regarding any disputed charge or sum
levied by the association, including, but not limited to, an
assessment, fine, penalty, late fee, collection cost, or monetary
penalty imposed as a disciplinary measure, and the amount in dispute
does not exceed the jurisdictional limits of the small claims court
stated in Sections 116.220 and 116.221 of the Code of Civil
Procedure, the owner of the separate interest may, in addition to
pursuing dispute resolution pursuant to Article 3 (commencing with
Section 5925) of Chapter 10, pay under protest the disputed amount
and all other amounts levied, including any fees and reasonable costs
of collection, reasonable attorney's fees, late charges, and
interest, if any, pursuant to subdivision (b) of Section 5650, and
commence an action in small claims court pursuant to Chapter 5.5
(commencing with Section 116.110) of Title 1 of the Code of Civil
Procedure.
(b) Nothing in this section shall impede an association's ability
to collect delinquent assessments as provided in this article or
Article 3 (commencing with Section 5700).
5660. At least 30 days prior to recording a lien upon the separate
interest of the owner of record to collect a debt that is past due
under Section 5650, the association shall notify the owner of record
in writing by certified mail of the following:
(a) A general description of the collection and lien enforcement
procedures of the association and the method of calculation of the
amount, a statement that the owner of the separate interest has the
right to inspect the association records pursuant to Section 5205,
and the following statement in 14-point boldface type, if printed, or
in capital letters, if typed:
"IMPORTANT NOTICE: IF YOUR SEPARATE INTEREST IS PLACED IN
FORECLOSURE BECAUSE YOU ARE BEHIND IN YOUR ASSESSMENTS, IT MAY BE
SOLD WITHOUT COURT ACTION."
(b) An itemized statement of the charges owed by the owner,
including items on the statement which indicate the amount of any
delinquent assessments, the fees and reasonable costs of collection,
reasonable attorney's fees, any late charges, and interest, if any.
(c) A statement that the owner shall not be liable to pay the
charges, interest, and costs of collection, if it is determined the
assessment was paid on time to the association.
(d) The right to request a meeting with the board as provided in
Section 5665.
(e) The right to dispute the assessment debt by submitting a
written request for dispute resolution to the association pursuant to
the association's "meet and confer" program required in Article 2
(commencing with Section 5900) of Chapter 10.
(f) The right to request alternative dispute resolution with a
neutral third party pursuant to Article 3 (commencing with Section
5925) of Chapter 10 before the association may initiate foreclosure
against the owner's separate interest, except that binding
arbitration shall not be available if the association intends to
initiate a judicial foreclosure.
5665. (a) An owner, other than an owner of any interest that is
described in Section 11212 of the Business and Professions Code that
is not otherwise exempt from this section pursuant to subdivision (a)
of Section 11211.7 of the Business and Professions Code, may submit
a written request to meet with the board to discuss a payment plan
for the debt noticed pursuant to Section 5660. The association shall
provide the owners the standards for payment plans, if any exists.
(b) The board shall meet with the owner in executive session
within 45 days of the postmark of the request, if the request is
mailed within 15 days of the date of the postmark of the notice,
unless there is no regularly scheduled board meeting within that
period, in which case the board may designate a committee of one or
more directors to meet with the owner.
(c) Payment plans may incorporate any assessments that accrue
during the payment plan period. Additional late fees shall not accrue
during the payment plan period if the owner is in compliance with
the terms of the payment plan.
(d) Payment plans shall not impede an association's ability to
record a lien on the owner's separate interest to secure payment of
delinquent assessments.
(e) In the event of a default on any payment plan, the association
may resume its efforts to collect the delinquent assessments from
the time prior to entering into the payment plan.
5670. Prior to recording a lien for delinquent assessments, an
association shall offer the owner and, if so requested by the owner,
participate in dispute resolution pursuant to the association's "meet
and confer" program required in Article 2 (commencing with Section
5900) of Chapter 10.
5673. For liens recorded on or after January 1, 2006, the decision
to record a lien for delinquent assessments shall be made only by the
board and may not be delegated to an agent of the association. The
board shall approve the decision by a majority vote of the directors
in an open meeting. The board shall record the vote in the minutes of
that meeting.
5675. (a) The amount of the assessment, plus any costs of
collection, late charges, and interest assessed in accordance with
subdivision (b) of Section 5650, shall be a lien on the owner's
separate 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 subdivision (b)
of Section 5650, a legal description of the owner's separate interest
in the common interest development against which the assessment and
other sums are levied, and the name of the record owner of the
separate interest in the common interest development against which
the lien is imposed.
(b) The itemized statement of the charges owed by the owner
described in subdivision (b) of Section 5660 shall be recorded
together with the notice of delinquent assessment.
(c) In order for the lien to be enforced by nonjudicial
foreclosure as provided in Sections 5700 to 5710, inclusive, the
notice of delinquent assessment shall state the name and address of
the trustee authorized by the association to enforce the lien by
sale.
(d) 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.
(e) A copy of the recorded notice of delinquent assessment shall
be mailed by certified mail to every person whose name is shown as an
owner of the separate interest in the association's records, and the
notice shall be mailed no later than 10 calendar days after
recordation.
5680. A lien created pursuant to Section 5675 shall be prior to all
other liens recorded subsequent to the notice of delinquent
assessment, except that the declaration may provide for the
subordination thereof to any other liens and encumbrances.
5685. (a) Within 21 days of the payment of the sums specified in
the notice of delinquent assessment, the association shall record or
cause to be recorded in the office of the county recorder in which
the notice of delinquent assessment is recorded a lien release or
notice of rescission and provide the owner of the separate interest a
copy of the lien release or notice that the delinquent assessment
has been satisfied.
(b) If it is determined that a lien previously recorded against
the separate interest was recorded in error, the party who recorded
the lien shall, within 21 calendar days, record or cause to be
recorded in the office of the county recorder in which the notice of
delinquent assessment is recorded a lien release or notice of
rescission and provide the owner of the separate interest with a
declaration that the lien filing or recording was in error and a copy
of the lien release or notice of rescission.
(c) If it is determined that an association has recorded a lien
for a delinquent assessment in error, the association shall promptly
reverse all late charges, fees, interest, attorney's fees, costs of
collection, costs imposed for the notice prescribed in Section 5660,
and costs of recordation and release of the lien authorized under
subdivision (b) of Section 5720, and pay all costs related to any
related dispute resolution or alternative dispute resolution.
5690. An association that fails to comply with the procedures set
forth in this article shall, prior to recording a lien, recommence
the required notice process. Any costs associated with recommencing
the notice process shall be borne by the association and not by the
owner of a separate interest.