In California, Homeowners Associations (HOAs) play a pivotal role in managing residential communities, ensuring maintenance of common areas, and upholding community standards. However, when homeowners fall behind on their dues, HOAs have the authority to place liens on properties and, in certain situations, initiate foreclosure proceedings. Understanding these processes is crucial for homeowners to protect their property rights and financial well-being.​

The Role Of Homeowners Associations In California

HOAs are established to oversee the management and operation of common interest developments. Their responsibilities include:​
Maintaining common areas such as parks, pools, and community centers.
Enforcing community rules and regulations as outlined in the Covenants, Conditions, and Restrictions (CC&Rs).
Collecting assessments to fund maintenance and operational costs.​

Legal Framework: The Davis-Stirling Act

The Davis-Stirling Common Interest Development Act governs HOAs in California. This comprehensive legislation outlines the rights and responsibilities of both HOAs and homeowners. Key provisions include:
Procedures for levying and collecting assessments.
Guidelines for imposing liens and initiating foreclosure.
Requirements for dispute resolution between HOAs and homeowners.​

What Are HOA Liens?

An HOA lien is a legal claim placed on a property due to unpaid assessments or fees owed to the HOA. Once recorded with the county, it serves as a public notice to potential buyers and lenders that the property has outstanding debts.​

How Liens Are Imposed

Before recording a lien, the HOA must:​
Provide the homeowner with a written notice detailing the delinquent amount, a description of the collection and lien enforcement procedures, and the homeowner's right to request a payment plan.
Wait at least 30 days after sending the notice before recording the lien with the county recorder's office.
These steps are mandated by the California Civil Code §5660.

Common Reasons for Liens

HOAs may impose liens for various reasons, including:
Delinquent regular or special assessments.
Unpaid fines or fees authorized by the HOA's governing documents.​

The Foreclosure Process Initiated By HOAs

Judicial Foreclosure

In a judicial foreclosure, the HOA files a lawsuit in court to obtain a judgment against the homeowner. If the court rules in favor of the HOA, the property may be sold to satisfy the debt. This process can result in a money judgment in addition to the foreclosure.​

Nonjudicial Foreclosure

A nonjudicial foreclosure does not involve court proceedings. Instead, the HOA follows a specific statutory process outlined in the California Civil Code §5710, which includes:​
Recording a Notice of Default.
Waiting a minimum of 90 days.
Recording a Notice of Sale.
Conducting a public auction of the property.​

Timeline and Requirements

Before initiating foreclosure, the HOA must ensure:​
The delinquent assessments amount to at least $1,800 or are more than 12 months overdue, excluding late fees, interest, and collection costs.
The decision to foreclose is made by a majority vote of the board of directors in an executive session, as required by California Civil Code §5705(c).
The homeowner is notified of the board's decision to foreclose.​
Additionally, the HOA must offer the homeowner the opportunity to participate in alternative dispute resolution (ADR) before proceeding with foreclosure.​

Homeowner Rights And Protections

Challenging Unsanctioned Assessments

Homeowners have the right to dispute charges not authorized by the HOA's governing documents. It's crucial to be aware of your homeowner rights to effectively respond to and, if necessary, contest any alleged violations. If an assessment or fee lacks proper authorization:
Review Governing Documents: Examine the Covenants, Conditions, and Restrictions (CC&Rs), bylaws, and rules to determine the validity of the charge.
Request Documentation: Ask the HOA for detailed explanations and records supporting the assessment.
Formal Dispute: Submit a written dispute to the HOA, outlining the reasons for contesting the charge.
Seek Legal Counsel: If the issue remains unresolved, consulting an HOA attorney California can provide guidance on further actions.

Addressing Erroneous Accounting

Errors in accounting can lead to incorrect assessments or liens. Homeowners should:
Access HOA Records: Under California Civil Code § 5200, homeowners can request financial records to verify debts.
Identify Discrepancies: Compare personal payment records with HOA statements to spot inconsistencies.
Communicate with the HOA: Present findings to the HOA and request corrections.
Legal Assistance: If discrepancies persist, seeking help from HOA lawyers near me can ensure accurate resolution.

Understanding Redemption Periods

California law provides homeowners with a redemption period after foreclosure:
Nonjudicial Foreclosure: A 90-day redemption period allows homeowners to reclaim their property by paying the owed amount plus costs .
Judicial Foreclosure: Redemption periods vary; typically, it's three months if the sale covers the debt or one year if it doesn't .
Redemption Process: Homeowners must pay all assessments, interest, attorney fees, and other costs to redeem the property.

Options for Negotiating Payment Plans

Homeowners struggling with assessments can request payment plans:
Written Request: Submit a written proposal to the HOA board outlining a feasible payment plan.
Board Meeting: The HOA must meet with the homeowner within 45 days to discuss the plan.
Plan Terms: Payment plans may include current assessments and should prevent additional late fees if adhered to.
Default Consequences: Failure to comply with the plan can lead the HOA to resume collection efforts.

Legal Resources And Assistance

Role of HOA Attorneys

Engaging an HOA attorney near me can be invaluable:
Legal Representation: Attorneys can represent homeowners in disputes, ensuring their rights are protected.
Foreclosure Navigation: Legal advisors can guide homeowners through HOA foreclosure processes, exploring options to prevent loss of property.

Seeking Mediation and Arbitration

Alternative dispute resolution (ADR) methods offer avenues to resolve conflicts:
Mediation: A neutral third party facilitates discussions to help both parties reach a voluntary agreement.
Arbitration: A neutral arbitrator hears both sides and makes a binding decision.
Benefits: ADR can be less adversarial, more cost-effective, and quicker than litigation.
Legal Requirement: California law often requires ADR before initiating lawsuits related to HOA disputes .

Preventative Measures For Homeowners

Staying Informed About HOA Policies

Awareness is key to preventing disputes:
Regular Review: Periodically review the HOA's governing documents and any updates.
Attend Meetings: Participate in HOA meetings to stay informed about decisions and policy changes.
Communication: Maintain open lines of communication with HOA board members.

Regular Payment and Dues Management

Timely payments prevent liens and foreclosures:
Budgeting: Allocate funds for regular assessments and anticipate potential special assessments.
Automation: Set up automatic payments to avoid missed dues.
Prompt Action: Address any financial difficulties early by communicating with the HOA.

Building Communication with HOA Boards

Fostering a positive relationship with the HOA can mitigate conflicts:
Engagement: Attend meetings and voice concerns constructively.
Feedback: Provide input on community matters and decisions.
Collaboration: Work with the board on initiatives that benefit the community.

Protecting Your Home: Contact LS Carlson Law To Know Your Rights And Options

Working through the complexities of foreclosure and HOA liens California requires a clear understanding of your rights and the legal processes involved. By staying informed about the Davis-Stirling Act, recognizing the implications of assessment delinquencies, and knowing the procedures for judicial and nonjudicial foreclosures, homeowners can take proactive steps to safeguard their property.​
If you're facing challenges with your HOA or have concerns about potential foreclosure, it's crucial to seek legal guidance.​
Contact LS Carlson Law today to consult with an experienced HOA attorney California. Our dedicated team is here to help you understand your options and protect your home.