Delinquency Reports
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DELINQUENCY REPORTS

QUESTION: Where should delinquency reports and discussing delinquencies be held, in an open meeting or executive session? For privacy reasons, I think it should be in executive session.

ANSWER: Discussion of delinquencies should should be done in both open and closed sessions of the board.

Open Session. Delinquency reports should be in open sessions because members have a right to know the finances of their association. It allows them to monitor whether or not the board is taking care of business. Failure by the board to collect assessments means budget shortfalls, deferred maintenance, special assessments, and/or increased dues for the membership. If I were a member, I would want to know if my association had a $500 delinquency problem or a $50,000 problem.

Moreover, the Davis-Stirling Act requires that the decision to record a lien for delinquent assessments be made in an open meeting and recorded in the minutes of that meeting prior to recording the lien. (Civ. Code §5673.) Confidentiality is maintained by referencing units/lots by their assessor's parcel number.

Executive Session. Delinquency reports should also be on the agenda for executive session meetings. Once an owner is delinquent by at least $1,800 or the delinquency is at least twelve months old, the board can initiate foreclosure proceedings. (Civ. Code §5720(b)(2).) The vote must be held in executive session and recorded in the minutes of the next open meeting. As with liens, boards maintain confidentiality by using the assessor's parcel number to identify the property. (Civ. Code §5705(c).)

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC