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 |
Sue for lien foreclosure and money judgment. |
Association sells property by trustee sale. |
Sue in small claims or superior court for money judgment. |
| Benefits |
If
insufficient equity in the property, a deficiency judgment is awarded
allowing the association to collect by sale of personal property, wage
garnishment, rent levy, bank levy, etc. |
Less
expensive than judicial foreclosure. If no bidders, association
acquires property and can rent or sell the property but is obligated to
pay senior loans, property taxes, and other expenses |
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 |
More expensive process, 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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For a list of companies specializing in collections for homeowner associations, see "Collections" in our Business Directory.