Homeowners' associations (HOAs) have the right to impose assessments and HOA fees on each member of the condo association to pay for the HOA's operations and maintenance expenses. Assessments can be regular or special, depending on the purpose for which they are made. Assessments are calculated, collected and enforced in the manner required by law and as provided by the HOA's governing documents.
Collection of Assessments
Assessments are made according to the schedule indicated in the HOA's bylaws or CC&Rs. The HOA must send or deliver notices of each homeowner's assessment amount to the homeowner. The homeowner then has a specified number of days in which to pay the assessment amount.
Enforcement of Assessments
Regular and special assessments are delinquent a specified number of days after they become due. If an assessment is delinquent, the association may recover all of the following:
- Reasonable costs incurred in collecting the delinquent assessment, including reasonable attorneys' fees
- A late charge
- Interest on all sums due
If a homeowner fails to pay the assessment, the HOA has several options:
- File a civil action in small claims court (if the amount due meets the court's requirements)
- Record a lien on the homeowner's unit or separate interest and delay foreclosure until the amount due equals a pre-determined amount or the assessments are more than 12 months delinquent
- Record a lien on the homeowner's separate interest and foreclose on the lien
- Any other manner provided by law
If the HOA is going to file a lien on the homeowner's unit, at least 30 days before filing the lien, it should send the owner of record a notice including, among other things:
- A general description of the HOA's collection and lien enforcement procedures
- The method of calculation of the amount due
- A statement that if the homeowner's separate interest is placed in foreclosure because the homeowner is behind in his or her assessments, it may be sold without court action
- An itemized statement of the charges owed by the homeowner
- The right to dispute the assessment debt by submitting a written request for dispute resolution to the HOA
- The right to request alternative dispute resolution with a neutral third party before the HOA may initiate foreclosure
To establish the lien, the HOA must record a notice of delinquent assessment in the county where the owner's unit is located. The notice must comply with the requirements of state law. Thirty days after the lien is recorded, it may be enforced in any manner permitted by law, including sale by the court, sale by the trustee named in the notice of delinquent assessment, or sale by a properly substituted trustee.
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