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 may have the authority to record liens for delinquent assessments and, in certain situations, initiate foreclosure proceedings. Understanding these processes can help homeowners better understand their rights and obligations under California law.

The Role Of Homeowners Associations In California

HOAs are established to oversee the management and operation of common interest developments. Their responsibilities often 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 delinquent assessments (and certain related charges permitted by statute) 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 claimed 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 and to request internal dispute resolution.
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 record assessment liens for various reasons, including:
Delinquent regular or special assessments.
Certain charges, interest, and collection costs that may be added to delinquent assessments as allowed by the Davis-Stirling Act.

The Foreclosure Process Initiated By HOAs

Judicial Foreclosure

In a judicial foreclosure, the HOA files a lawsuit in court seeking to enforce the lien. If the court rules in favor of the HOA, the property may be sold to satisfy the debt. Depending on the claims and relief sought, judicial actions may also involve requests for a personal money judgment for amounts due.

Nonjudicial Foreclosure

A nonjudicial foreclosure generally follows the statutory process applicable to trustee’s sales (including Civil Code §5710 and related provisions), which typically 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 regular or special assessments amount to at least $1,800 or are more than 12 months overdue, excluding accelerated assessments, late charges, fees and costs of collection, attorney’s fees, and interest.
The decision to foreclose is made by a majority vote of the board of directors in an executive session, consistent with California Civil Code §5705.
The homeowner is notified of the board's decision to foreclose.​
Additionally, homeowners are generally entitled to request internal dispute resolution (IDR) regarding a dispute over the assessments or charges. Alternative dispute resolution (ADR) is required in some circumstances before certain HOA-related lawsuits, but ADR is not necessarily a prerequisite to nonjudicial foreclosure.

Homeowner Rights And Protections

Challenging Unsanctioned Assessments

Homeowners may dispute charges they believe are not authorized by the HOA's governing documents or applicable law. It's helpful to be aware of homeowner rights to effectively respond to and, if necessary, contest alleged violations. If an assessment or fee appears to lack 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 explanations and records supporting the assessment.
Formal Dispute: Submit a written dispute to the HOA, outlining the reasons for contesting the charge.
Consider Legal Guidance: In some situations, consulting an attorney familiar with California HOA law may help a homeowner evaluate potential options.

Addressing Erroneous Accounting

Errors in accounting can lead to incorrect assessments or liens. Homeowners should:
Access HOA Records: Under California Civil Code §§5200–5240, homeowners have rights to inspect and copy certain association records, including many financial records.
Identify Discrepancies: Compare personal payment records with HOA statements to spot inconsistencies.
Communicate with the HOA: Present findings to the HOA and request corrections.

Understanding Redemption Periods

Redemption rights can differ depending on the type of foreclosure:
Nonjudicial Foreclosure: Under California law, nonjudicial foreclosure sales are generally final, and a post-sale right of redemption typically does not apply.
Judicial Foreclosure: A right of redemption may apply in some judicial foreclosure cases, and the length and availability of any redemption period can depend on the type of judgment and other factors.

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: If requested, the HOA generally must meet with the homeowner within 45 days to discuss the plan.
Plan Terms: Payment plans may address delinquent amounts while current assessments continue to come due.
Default Consequences: Failure to comply with the plan may allow the HOA to resume collection efforts consistent with applicable law.

Legal Resources And Assistance

Role of HOA Attorneys

Attorneys may assist parties involved in HOA disputes in a variety of ways, such as:
Helping interpret governing documents and applicable statutes.
Representing parties in dispute resolution processes or litigation.
Explaining procedural requirements that may apply to liens and foreclosure.

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 issues a decision, which may be binding depending on the agreement and procedure.
Benefits: ADR can be less adversarial, more cost-effective, and quicker than litigation.
Legal Requirement: California law requires ADR in some circumstances before certain HOA-related lawsuits (for example, many actions to enforce governing documents).

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 can help 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: Understanding Your Rights And Options

Working through the complexities of HOA liens and potential foreclosure in California involves understanding the Davis-Stirling Act and related statutes. Homeowners may benefit from reviewing the association’s notices carefully, understanding statutory timelines, and documenting payments and communications. This article is general information and not legal advice.