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NO COLLECTION POLICY
 QUESTION: Our HOA does not have a collection policy as required
by Civil Code §1365(e). They levied a special assessment. If I
pay this late, or maybe not at all, would I have to later pay any late
fees and collection costs?
ANSWER: Before I address your question, you should be aware that by statute and case law, members have a duty to pay
their HOA assessments. Even if you believe you have grounds for challenging the
special assessment, you do not have a legal basis for withholding payment. Now let's address the issue of late fees and collection costs.
Collection Policy Required. The Davis-Stirling Act requires that associations annually distribute their collection policies:
A
statement describing the association's policies and practices in
enforcing lien rights or other legal remedies for default in payment of
its assessments against its members shall be annually delivered to the
members not less than 30 days nor more than 90 days immediately
preceding the beginning of the association's fiscal year. (Civil Code §1365(e))
If associations must distribute a collection policy, that means they must first adopt one with certain required elements.
Failure to Adopt Policy.
Although the statute requires a collection policy,
it does not provide a penalty for failing to do so. However, if an
association without a collection policy tried to collect late fees
against delinquent members and foreclose on their units,
it would likely lose a legal challenge.
Court Decision.
In an unpublished decision involving the collection of delinquent
assessments, the Court of Appeals noted that before an association can
record a lien on a property to collect delinquent assessments it must,
among other things, notify the owner in writing of the association's
collection practices. In the Gurich case, the delinquent owner testified
that she had not received the association's collection policy. The
court found that the board could not provide sufficient evidence that it
had sent her the policy. Accordingly, the lower court's award to the
association of $41,818.29 plus fees and costs of $15,451.25 was
reversed. In addition, the association had to pay the delinquent owner's
costs on appeal. See T.D. Service Co. v. Gurich.
 RECOMMENDATION.
If any association does not already have a written collection policy,
the board should immediately work with legal counsel to adopt a policy
that satisfies their governing documents and applicable laws.
Tina Chu, Esq.
HOMEBUYER'S SOLAR OPTION
A
new statute took effect January 1, 2011 that requires builders of
certain homes to give home buyers the option of having a solar energy
system installed in their new home or participate in an offset program.
Builders only have to offer solar energy systems; buyers decide whether
they want them or not. The builders of new common interest developments
and boards of new associations need to take certain steps to successfully implement the program. -Helene Fransz, Esq.
FEEDBACK ON NOD
 When to Lien? You gave some good
information on NOD, but what we would like to know is, "What is the
amount in delinquency when you can put the lien on the property? -Jay S.
RESPONSE:
There is no minimum amount required before an association can record a
lien to secure the debt. The limitation is on the foreclosure, i.e., $1,800 or 12 months. Although boards could follow a more aggressive lien policy, the typical timeline
is 46 days from the original due date of the delinquent assessment for
sending a pre-lien letter and 76 days for recording the lien. -Tina Chu, Esq.
Small Claims.
With respect to the issue of dues in the arrears, my association adopted
a policy of prosecuting arrears, two payments late, in small claims
court. Most of the time, the owner pays immediately because he or she
does not want a judgment against them personally. The Association still
has the option of recording the judgment against the property, if the
owner does not pay, thereby securing the loan against said property.
-Ilbert P
FEEDBACK ON
RULES ENFORCEMENT
No "Touchy Feely."
I'm presently our board president. The old saying; "Good fences make
for good neighbors" or words to that effect certainly applies here. Let
there be no doubt of the board member's transgression. Maybe the board
president or other member can talk to him as you say, but if he tries to
lie his way out of it or take no responsibility, having evidence to the
contrary will certainly save everybody a lot of time. Board members
need to set the example so the rules should be held the same for them as
anybody else. Board members change more than once a year and nobody can
afford the "touchy feely" approach to some obstinate individual, board
member or not. -Sam M.
Cost-Benefit Analysis. In our own
HOA, we set the goal, "to seek compliance to the will of the majority
not punishment for infractions." I believe your response to the "Dog
off the leash" issue is consistent with that approach and I applaud it.
However, I also might add that infractions that cause NO DAMAGE are
sometimes better overlooked; i.e. the poor cost-benefit of trying to
enforce a no leash infraction on a dog out in the front yard with his
master, etc, etc. -Tom M.
Frivolous Complaints. Our HOA
began to require photos of violations for things like parking and dogs
off leash because two vindictive owners would report "violations" that
did not exist. Also, violators would deny wrongdoing, and there would be
no proof. I agree it is not an ideal situation, but it has cut down on
unsubstantiated and frivolous complaints. -M.B.
Don't Take Kindly.
Regarding rules enforcement, I have yet to find anyone who graciously
accepts being told what the rules are. Offenders who already know they
are breaking the rules do not take kindly to being approached by
someone, no matter how polite that person is. And people who
unknowingly break the rules often respond negatively simply out of
embarrassment. -Pat C.
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