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NOTICE REGARDING ASSESSMENTS AND FORECLOSURE
FOR 2009
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NOTICE ASSESSMENTS AND
FORECLOSURE |
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This notice outlines some of
the rights and responsibilities of owners of
property in common interest developments and
the associations that manage them. Please
refer to the sections of the Civil Code
indicated for further information. A
portion of the information in this notice
applies only to liens recorded on or after
January 1, 2003. You may wish to consult a
lawyer if you dispute an assessment.
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ASSESSMENTS AND FORECLOSURE
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Assessments become delinquent
15 days after they are due, unless the
governing documents provide for a longer
time. The failure to pay association
assessments may result in the loss of an
owner's property through foreclosure.
Foreclosure may occur either as a result of
a court action, known as judicial
foreclosure, or without court action, often
referred to as nonjudicial foreclosure. For
liens recorded on and after January 1, 2006,
an association may not use judicial or
nonjudicial foreclosure to enforce that lien
if the amount of the delinquent assessments
or dues, exclusive of any accelerated
assessments, late charges, fees, attorney's
fees, interest, and costs of collection, is
less than one thousand eight hundred dollars
($1,800) For delinquent assessments or dues
in excess of one thousand eight hundred
dollars ($1,800) or more than twelve (12)
months delinquent, an association may use
judicial or nonjudicial foreclosure subject
to the conditions set forth in Section
1367.4 of the Civil Code. When using
judicial or nonjudicial foreclosure, the
association records a lien on the owner’s
property. The owner’s property may be sold
to satisfy the lien if the amounts secured
by the lien are not paid. (Sections 1366,
1367.1, and 1367.4 of the Civil Code).
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In a judicial or nonjudicial
foreclosure, the association may recover
assessments, reasonable costs of collection,
reasonable attorney's fees, late charges,
and interest. The association may not use
nonjudicial foreclosure to collect fines or
penalties, except for costs to repair common
areas damaged by a member or a member's
guests, if the governing documents provide
for this. (Sections 1366 and 1367.1 of the
Civil Code).
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The association must comply
with the requirements of Section 1367.1 of
the Civil Code when collecting delinquent
assessments. If the association fails to
follow these requirements, it may not record
a lien on the owner's property until it has
satisfied those requirements. Any
additional costs that result from satisfying
the requirements are the responsibility of
the association. (Section 1367.1 of the
Civil Code).
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At least 30 days prior to
recording a lien on an owner's separate
interest, the association must provide the
owner of record with certain documents by
certified mail, including a description of
its collection and lien enforcement
procedures and the method of calculating the
amount. It must also provide an itemized
statement of the charges owed by the owner.
An owner has a right to review the
association's records to verify the debt.
(Section 1367.1 of the Civil Code).
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If a lien is recorded against
an owner's property in error, the person who
recorded the lien is required to record a
lien release within 21 days, and to provide
an owner certain documents in this regard.
(Section 1367.1 of the Civil Code).
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The collection practices of
the association may be governed by state and
federal laws regarding fair debt
collection. Penalties can be imposed for
debt collection practices that violate these
laws. |
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When an owner makes a
payment, he or she may request a receipt,
and the association is required to provide
it. On the receipt, the association must
indicate the date of payment and the person
who received it. The association must
inform owners of a mailing address for
overnight payments. (Section 1367.1 of the
Civil Code).
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An owner may, but is not
obligated to, pay under protest any disputed
charge or sum levied by the association,
including, but not limited to, an
assessment, fine, penalty, late fee,
collection cost, or monetary penalty imposed
as a disciplinary measure, and by so doing,
specifically reserve the right to contest
the disputed charge or sum in court or
otherwise.
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An owner may dispute an
assessment debt by submitting a written
request for dispute resolution to the
association as set forth in Article 5
(commencing with Section 1368.810) of
Chapter 4 of Title 6 of Division 2 of the
Civil Code. In addition, an association may
not initiate a foreclosure without
participating in alternative dispute
resolution with a neutral third party as set
forth in Article 2 (commencing with Section
1369.510) of Chapter 7 of Title 6 of
Division 2 of the Civil Code, if so
requested by the owner. Binding arbitration
shall not be available if the association
intends to initiate a judicial foreclosure.
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An owner is not liable for
charges, interest, and costs of collection,
if it is established that the assessment was
paid properly on time. (Section 1367.1 of
the Civil Code). |
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MEETINGS AND PAYMENT PLANS
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An owner of a separate
interest that is not a timeshare may request
the association to consider a payment plan
to satisfy a delinquent assessment. The
association must inform owners of the
standards for payment plans, if any exist.
(Section 1367.1 of the Civil Code).
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The board of directors must
meet with an owner who makes a proper
written request for a meeting to discuss a
payment plan when the owner has received a
notice of a delinquent assessment. These
payment plans must conform with the payment
plan standards of the association, if they
exist. (Section 1367.1 of the Civil Code).
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