Home > Blogs > California > Sonoma County > Santa Rosa > Good news for short sales and HOA's. 

Suzanne Ash's Blog

By Suzanne Ash | Agent in Sonoma County, CA

Good news for short sales and HOA's.

HOA information in Short sales.

In a short sale or a sale of a property after foreclosure in a common interest development, unpaid homeowners’ association (“HOA”) assessments and HOA liens can complicate a transaction and may sometimes prevent a transaction from taking place. This Q&A will review the applicable law and address many of the frequently asked questions relating to HOA liens and assessments and their impact on short sales and sales of properties after foreclosure that C.A.R. member legal attorneys receive from REALTORS® who call the C.A.R. legal hotline.

II. Homeowners’ Associations Liens and Assessments

Q 1. What are HOA assessments?

A An assessment is a levy of money imposed by a HOA against the owner of a unit in a common interest development. An example of an assessment is the monthly dues payment that most homeowners pay in a condominium complex. HOAs are empowered by California law to levy such assessments so that the association may perform its duties as required by the governing documents of the association (such as the covenant, conditions and restrictions (“CC&Rs”) and bylaws) and California law. (Cal. Civ. Code section 1366(a).)

Q 2. How often are a HOA’s assessments due?

A HOAs typically will have regular assessments which are due on a monthly basis (sometimes less than monthly, typically in resort properties). HOAs will also at times have special assessments which are due on the date determined at the time the special assessment is enacted by the board of the HOA.

Q 3. When does an assessment become a debt of the owner?

A The assessment becomes a debt of the owner at the time the assessment is levied. For example, if a regular assessment is due on the first of the month, the unit owner owes the debt as of that date. (Cal. Civ. Code section 1367.1(a).)

Q 4. Is an unpaid assessment the responsibility and debt of the owner even if he or she ceases to own the property?

A Yes, the debt belongs to the person who owns the property at the time of the assessment. A HOA can pursue a person for unpaid assessments even if he or she is no longer the owner of the property. (Cal. Civ. Code section 1367.1(a).)

Q 5. When is an assessment considered delinquent?

A An assessment is delinquent 15 days after it is due, unless the governing documents provide for a longer time period. (Cal. Civ. Code section 1366(e).)

Q 6. Once an assessment is delinquent what penalties or charges can a HOA charge the homeowner?

A Once an assessment is delinquent, the HOA may collect the following charges:

  1. Reasonable costs incurred collecting the delinquent assessment including reasonable attorney fees.
  2. A late charge not exceeding 10 of the delinquent assessment or $10.00 whichever is greater, unless the governing documents specify a lower amount.
  3. Interest on all sums imposed including the delinquent assessment at an annual interest rate not to exceed 12% commencing 30 days after the assessment comes due, unless the governing documents specify a lower amount.

(Cal. Civ. Code section 1366(e).)

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer