Adams Stirling PLC


QUESTION: What is the individual unit owner's liability/responsibility when the HOA takes out a bank loan?

ANSWER: Most HOA bank loans are secured by a special assessment approved by the membership. In such cases, owners are responsible for their portion of the assessment. However, their obligation could expand if other members become delinquent, are foreclosed upon or declare bankruptcy. Unless the number of defaults are significant, the delinquency is absorbed into the budge and adjustments are made. If the number of delinquencies are significant, an association may have no choice but to increase the burden on everyone via higher dues or special assessments to make up the lost revenue.

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