Assessment Collections What Are Your Options?
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By Nicole A. Lilomaiava, Esq.
ssessments paid by members are the main source of income for an association. Members’ failure to pay assessments can therefore be crippling to an association and under the right circumstances, catastrophic. Payment of assessments is necessary for an association’s operation, and collection of delinquent assessments, vital to its longevity. Under the Davis-Stirling Common Interest Development Act, assessments and related charges are the debt of the owner and may be a lien against the separate interest from and after the time a notice of delinquent assessment (lien) is recorded against the property (Civil Code “CC” §5650 and §5675). Most CC&Rs have similar provisions. As such, associations have various options for collection of assessments.
6 The Law Journal Summer 2022 | cacm.org
In seeking recovery of delinquent assessments, an association can file a lawsuit in either Small Claims Court or Superior Court, depending on the amount being sought. Associations can also opt to pursue foreclosure of the property. There are two types of foreclosure options available to associations: judicial foreclosure and non-judicial foreclosure. In judicial foreclosure, associations file a lawsuit against a delinquent homeowner seeking a judgment to sell the property. In non-judicial foreclosure, an association can sell the property without court involvement; a trustee handles the sale. Judicial and non-judicial foreclosures start off in the same manner. They both require a prelien demand to be sent to all record owners (CC §5660). A lien must be recorded after proper
