SAMPLE
HOMEOWNERS ASSOCIATION
DELINQUENT ASSESSMENT COLLECTION POLICY
Prompt payment of assessments by all owners is critical to the financial
health of the Association and to the enhancement of the property values
of our homes. Under the Declaration of Covenants, Conditions and Restrictions
(CC&Rs) and the California Civil Code, the Board of Directors is obligated
to enforce the members' obligation to pay assessments.
The policies and practices outlined herein have been adopted by the Board
to ensure a prompt and fair collection of delinquent assessments. These
policies and procedures shall remain in effect until such time as they
may be changed, modified, or amended by a duly adopted resolution of the
Board of Directors.
Therefore, pursuant to the CC&Rs and Civil Code Section
5650(a), the _____ HOA
delinquent assessment practices and policies, are as follows:
1.
Owner's Obligation to Pay Assessments
Assessments, late charges, interest and collection costs, including any
attorneys' fees, are the personal obligation of the owner of the property
at the time the assessment or other sums are imposed (Civil Code Section
5650(a)).
2.
Quarterly Assessments
Quarterly assessments are due and payable on the first day of each quarter, i.e.:
1st Quarter = June 1
st
2nd Quarter = September 1
st
3rd Quarter = December 1
st
4th Quarter = March 1
st
A quarterly assessment shall be deemed delinquent fifteen (15) days after
the stated due date. A courtesy billing statement is sent each quarter
to the billing address on record with the Association.
HOWEVER, IT IS THE OWNER'S RESPONSIBILITY TO PAY EACH ASSESSMENT IN
FULL EACH QUARTER REGARDLESS OF WHETHER A STATEMENT IS MAILED OR RECEIVED.
3.
Other Assessments
All other assessments, including special assessments, are due and payable
on the date specified by the Board on the Notice of Assessment, which
date will not be less than thirty (30) days after the date of notice of
the special assessment.
A special assessment payable in installments shall be deemed delinquent
thirty (30) days after the stated installment due date. Any remaining
installments will be accelerated and the entire unpaid balance shall become
immediately due and payable and shall be subject to a late charge and
interest as provided below.
4.
Late Fees
Assessments which are not postmarked or received within the grace period
following the due date are delinquent and shall be subject to a ten dollar
($10.00) late charge.
5.
Interest
Interest, at the rate of ten percent (10 %) per annum, will be assessed
against any outstanding balance, including delinquent assessments, late
charges and cost of collection, which may include attorneys' fees.
Interest charges shall accrue thirty (30) days after the assessment becomes
due and shall continue to be assessed each month until the account is
brought current.
6.
Delinquency & Legal Notices
1st Reminder:
The first notice of past due assessment ("1st Reminder") will be prepared and mailed once an assessment becomes
delinquent.
2nd Reminder:
The second notice of past due assessment ("2nd Reminder") will be mailed if the required payment has not been received
within fifteen (15) days of mailing the 1
st Reminder.
Pre-Lien Letter:
If an assessment is not received within forty-five(45) days after the assessment
becomes delinquent, the Association, the Management Company, or its designee,
will send a Pre-Lien Letter to the owner as required by Civil Code Section
5650(a)by certified and first class mail, to the owner's mailing address of
record advising of the delinquent status of the account, impending collection
action and the owner's right to request that the Association participate
in the internal dispute resolution process ("IDR"). Charges
associated with the preparation of the pre-lien letter will be considered
a "cost of collection" and may be charged to the owner.
Notwithstanding this provision, the Association reserves it right to issue
a Pre-Lien Letter following delinquency but before expiration of the 45
days referenced above, when (1) there is an open escrow involving the
owner's lot; or (2) if a Special Assessment becomes delinquent.
Communications to Owner
Any and all communications to the owner as referenced herein will be made
to the owner's property address. Owners have the right to provide
a secondary address for the purpose of receiving collection notices. The
owner's request shall be in writing and shall be mailed to the Association
in a manner that verifies the Association has received it. An owner may
identify or change a secondary address at any time, provided that, if
a secondary address is identified or changed during the collection process,
the Association shall only be required to send notices to the indicated
secondary address from the point the Association receives the request.
Communications to Association
Any and all communications to the Association as referenced herein should
be made by fax and mail to:
7.
Recording of the Lien
If an owner fails to pay the amounts set forth in the Pre-Lien Letter and
fails to request IDR within thirty (30) days of the date of the Pre-Lien
Letter, the Board shall decide, by majority vote in an open meeting, whether
to authorize the recording of a lien for the amount of any delinquent
assessments, late charges, interest and/or costs of collection, including
attorneys' fees, if any, against the owner's property. If the
Association authorizes the recording of a lien against the owner's
property, the owner will be charged for the fees and costs of preparing
and recording the lien. The lien may be enforced in any manner permitted
by law, including, without limitation, judicial or non-judicial foreclosure.
8.
Enforcing of the Lien
Once the lien has been recorded, the Association, the Management Company,
or its designee, may enforce the lien thirty (30) days after recordation
of the lien and may foreclose the lien by non-judicial foreclosure sale
when either,
(a) the delinquent assessment amount totals One Thousand, Eight Hundred
Dollars ($1,800.00) or more, excluding accelerated assessments and specified
late charges and fees;
or
(b) the assessments are delinquent for more than twelve (12) months.
Owner's could lose ownership of the subject property if a foreclosure
action is completed and may also be responsible for significant additional
fees and costs if a foreclosure action is commenced.
The decision to foreclose on a lien must be made by a majority of the Board
of Directors in an Executive Session meeting and the Board of Directors
must record their votes in the minutes of the next open meeting of the Board.
The Board must maintain the confidentiality of the delinquent owner(s)
by identifying the matter in the minutes by only the parcel number of
the owner's property.
9.
Release of Lien
Prior to the release of any lien, or dismissal of any legal action, all
assessments, late charges, interest, and costs of collection, including
attorneys' fees, must be paid in full to the Association.
10.
Owner's Right to Inspect Accounting
Pursuant to Corporations Code Section 8333, an owner is entitled to inspect
the Association's accounting books and records to verify the amounts owed
In the event it is determined that the owner has paid the assessments on
time, the owner will not be liable to pay the charges, interests, and
costs of collection associated with collection of those assessments.
11.
Owner's Right to Dispute resolution
Prior to initiating any foreclosure sale on a recorded lien, the Association
shall offer delinquent homeowners the option of participating in Internal
Dispute Resolution (IDR) or Alternative Dispute Resolution (ADR).
Pursuant to Civil Code Section 1363.810
et seq., an owner has the right to dispute the assessment debt by submitting a
written request for dispute resolution to the management Company for delivery
to the Association.
Pursuant to Civil Code Section 1369.510
et seq., an owner has the right to request alternative dispute resolution with
a neutral third party 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.
12.
request for a payment plan
Any owner who is unable to pay assessments will be entitled to make a written
request for a payment plan for consideration by the Board of Directors.
An owner may also request to meet with the Board in executive session
to discuss a payment plan if the payment plan request is mailed within
fifteen (15) days of the postmark date of the pre-lien Letter.
The Board will consider payment plan requests on a case-by-case basis and
is under no obligation to grant payment plan requests. Payment plans shall
not interfere with the Association's ability to record a lien on an
owner's separate interest to secure payment for the owner's delinquent
assessments.
If the Board authorizes a payment plan, it may incorporate payment of ongoing
assessments that accrue during the payment plan period.
If a payment plan is approved, additional late fees from the homeowner
will not accrue while the owner remains current under the terms of the
payment plan. If the owner breaches an approved payment plan, the Association
may resume its collection action from the time the payment plan was approved.
Nothing herein limits or otherwise affects the Association's right
to proceed in any lawful manner to collect any delinquent sums owed to
the Association.
See also the
Payment Plan Standards.
13.
How Payments Are Applied
Any payments made shall be first applied to assessments owed and only after
the assessments owed are paid in full, shall such payments be applied
to late charges, interest, and collection expenses, if any, including
attorneys' fees, unless the owner and the Association enter into an
agreement providing for payments to be applied in a different manner.
14.
No Offset
There is no right of offset. An owner may not withhold assessments owed
to the Association on the alleged grounds that the owner is entitled to
recover money or damages from the Association for some other obligation.
15.
Returned Check Fees
An owner will be charged a ten dollar ($10.00) fee for any returned check
unpaid by the owner's bank.
16. All charges referenced herein are subject to change upon thirty (30) days'
prior written notice.
Board of Directors
Homeowners Association