Homeowner's associations, or HOAs, are a common occurrence in California. There are around 50,000 HOAs in the state. Living in an HOA gives you access to numerous community amenities.
Some homeowners might not know that HOAs can file a lien and foreclose on your home. This blog will cover the basics of an HOA foreclosure.
Understanding HOA Foreclosures in California
HOAs collect fees and assessments from residents on a special or regular basis. These funds cover various community expenses, such as:
- Association insurance
- Utilities such as water and trash removal
- Maintenance and repairs of common areas
- Amenities, including fitness centers and pools
- Reserve funds
Homeowners agree to pay these fees when they join an HOA community. If you fall behind on paying your fees, HOAs will usually start trying to collect these fees using debt collection methods.
The HOA may take away your rights to access community facilities or seek a money judgment against you. If this is unsuccessful, you may get hit with an HOA lien and foreclosure.
What Is an HOA Lien?
Once homeowners become delinquent on their assessment fees, a lien typically automatically attaches to the property. The HOA can choose to record the lien with the county recorder. This ensures there is public notice of the existence of the lien.
A lien can't be recorded in California until 30 days after the HOA sends the homeowner a notice about the late assessments. The notice they issue must include some of the following information:
- An itemized list of outstanding charges
- A description of the lien enforcement and collection procedures
- A homeowner association foreclosure warning
- Various suggestions on how to fix the problem
The HOA has to offer and participate in dispute resolution with the homeowner before they can record the lien. Homeowners can also ask to meet with the HOA board to discuss a payment plan.
HOA Foreclosure Process
An HOA board can foreclose on a lien nonjudicially or judicially 30 days after they record the lien. Most HOA foreclosures are nonjudicial. However, local laws can vary.
Keep in mind that an HOA board can't foreclose unless they meet the following criteria:
- The fees are more than 12 months past due
- The delinquent fees are more than $1,800
The HOA may decide to sue you for a money judgment if they're unable to foreclose.
How to Defend Against an HOA Foreclosure
HOA foreclosures can be intimidating. Homeowners have a few ways they can fight foreclosures, such as:
- The HOA doesn't have the authority to foreclose
- The HOA imposed an assessment that isn't sanctioned
- Inaccurate accounting and financial recording
- Non-compliance with foreclosure laws
Learn More About an HOA Foreclosure in Del Mar
Dealing with an HOA foreclosure as a board member can be complicated. There are many foreclosure laws in an HOA community you need to follow. That's why it's important to partner with an experienced property management company in Del Mar that has experience working with HOAs.
PMI Del Mar works extensively with HOA boards in the Del Mar area. We offer a wide range of association management services, including maintenance and financial management. Reach out to our office to schedule a consultation to discuss your options.
