Collection Methods
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COLLECTION METHODS

Boards have a duty to collect delinquent assessments. Collections are subject to the one action rule.

  Judicial Foreclosure Non-Judicial Foreclosure Money Judgment Suspend Privileges
Remedy HOA forces sale of a unit/lot via the courts. Judicial foreclosure is useful when the amount owed is significant and the association wants to replace a nonpaying owner with a paying one. HOA sells property via trustee sale. Like Judicial foreclosure, nonjudicial foreclosure is useful when the amount owed is significant and the association wants to replace a nonpaying owner with a paying one. HOA receives a money judgment. As a general rule, small claims and superior court actions are successful when used early in the process with owners who can afford to pay. Owner voluntarily pays delinquent assessment
Benefits If there is 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. Timeline and costs are greatly reduced if owner fails to respond and HOA obtains a default judgment. Less expensive than judicial foreclosure. If no bidders, HOA acquires property (subject to 90-day right of redemption) 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. There is no cost to the association.
1st Step Record a lien ($300-$500) to secure the debt. Record a lien to secure the debt. Record a lien to secure the debt. Record a  lien  to secure the debt then hold hearing with the delinquent owner.
Action A lawsuit is filed in superior court. The process takes place without court or attorney involvement. (See sequence of steps.) HOA sues owner in small claims or superior court. Voting and common area privileges are suspended.
Potential
Problems
Owner must be personally served. Can be more expensive, especially if no equity in property and deficiency judgment turns out to be noncollectable. Recovery is limited to sale of property. Buyers take subject to right of redemption. Collection efforts on the judgment require additional legal expenses and are often uncollectable. They are avoidable if the owner declares bankruptcy. Owner may try to violate the suspension. 
Average
Timeline
200-400 days (unless owner defaults, then ~90 days) 9 months-1 year (see timeline) 90-180 days (unless vigorously opposed) 10-day notice of hearing then notice of suspension within 15 days of hearing.


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