Personal Debt of Owner. "A regular or special assessment and any late charges, reasonable fees and costs of collection, reasonable attorney’s fees, if any, and interest, if any..., shall be a debt of the owner of the separate interest at the time the assessment or other sums are levied." (Civ. Code §5650(a).)
It should be noted that Civil Code section , which gives the homeowners association the right to collect assessments made in conformity with their CC&Rs specifically makes this obligation a "debt of the owner" at the time the assessment is made. Therefore, such obligation is personal in nature, even though it may also become a lien against the property under circumstances as provided in that code section. (Cerro de Alcala HOA v. Burns.)
A condominium assessment becomes a debt of the owner when the assessment is levied by the condominium association. The debt is only a personal obligation of the owner, however, until the community association records a notice of delinquent assessment against the owner's interest in the development. Recording this notice creates a lien and gives the association a security interest in the lot or unit against which the assessment was imposed. The lien dates from the time the lien is properly recorded. California follows the "first in time, first in right" system of lien priorities. Condominium assessment liens follow this same system. An assessment lien is prior to all other liens recorded subsequent to the notice of assessment, except that the [CC&Rs] may provide for the subordination thereof to any other liens and encumbrances. (Diamond Heights v. Financial Freedom, internal cites and quotes deleted)
No Offsets. Members cannot deduct a portion of their dues because they do not use recreational facilities or because they have a grievance against their association.
A system that would tolerate a [condominium] owner's refusal to pay an assessment because the unit owner asserts a grievance . . . would threaten the financial integrity of the entire condominium operation. (Park Place v. Naber.)
These statutory provisions reflect the Legislature's recognition of the importance of assessments to the proper functioning of condominiums in this state. Because homeowners associations would cease to exist without regular payment of assessment fees, the Legislature has created procedures for associations to quickly and efficiently seek relief against a nonpaying owner. Permitting an owner to broadly assert the homeowners association's conduct as a defense or "setoff" to such enforcement action would seriously undermine these rules. (Park Place v. Naber.)
Abandonment of Property. Vacating or abandoning a property in an association (merely vacating possession) does not release a homeowner of liability for paying his maintenance assessments.
Although respondent ceased to enjoy the possession of his property, he continued to enjoy other aspects of ownership until the very moment of recordation of the trustee's deed which effected a transfer of the property. As the record owner of the property, respondent continued to benefit from the homeowners association's ongoing schedule of maintenance and repairs to the common areas. In addition, respondent benefited from the protection of a policy of general liability insurance maintained by the homeowners association. Also, at all times prior to the transfer of title, respondent was entitled to lease, encumber, assign, exchange or sell the property as well as reoccupy the unit at no expense. Thus, it is clear that respondent did not cease to enjoy the benefits of the estate by voluntarily vacating the premises. (Cerro de Alcala HOA v. Burns.)
No Escrow Accounts. Owners cannot put their assessments in an escrow account and claim they are "paying" their assessments. Homeowners can dispute charges but they must continue to pay their assessments while they dispute them.
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