Boards have a
duty to collect delinquent assessments. Collections are subject to the
one action rule.
| |
Judicial Foreclosure |
Non-Judicial Foreclosure |
Sue for Money Judgment |
| Remedy |
HOA sues to sell property and for money judgment. |
HOA sells property via trustee sale. |
HOA sues owner in small claims or superior court for money judgment. |
| Benefits |
If
insufficient equity in the property, a deficiency judgment is awarded
allowing the HOA to collect by sale of personal property, wage
garnishment, rent levy, bank levy, etc. |
Less
expensive than judicial foreclosure. If no bidders, HOA acquires property and can rent or sell the property. Although HOA is not required to pay senior loans and property taxes, if lien holders go unpaid, they may foreclose on the property and terminate the HOA's ownership.
|
Can
include fines and penalties. Judgment can be obtained fairly quickly
but debt is unsecured until an abstract of judgment is recorded.
Collectible through wage garnishment, bank levy, etc. |
| Problems |
Can be more expensive, especially if no equity in property and deficiency judgment turns out to be uncollectable. |
Recovery is limited to sale of the property. Buyers take subject to right of redemption. |
Collection efforts on the judgment require more legal expenses and may be uncollectable.
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