HOA Law Blog

To foreclose or not foreclose, that seems to be the question that many association board members and managers are asking themselves these days. There is no question that the sub-prime meltdown/crisis has increased the number of delinquent homeowners. Data Quick Information Services reports that in the first three months of 2008, 47,171 homes were lost to foreclosure, more than four times as many as a year earlier. In that same period, 110,000 California homeowners received default notices which is a 143% increase from the same period in 2007. Data Quick estimates that only 32% of the properties in default will avoid foreclosure, which is down from 52% a year ago. It is therefore no surprise that Association Lien Services has seen a steep rise in the number of delinquent matters that are being turned over for collection. With the potential lack of equity and the fact that these delinquent homeowners may not have any assets to collect on, making the decision as to how to proceed to collect and whether or not to foreclose are questions that many associations are having to face. Attorneys David Swedelson and Tracy Neal (supervising attorney at Association Lien Services) have written an article that will help board members and managers answer these questions. Download a PDF copy of the article To Foreclose or Not Foreclose.

Although the FCC regulations which allow a owner to install a satelite dish on their property has been the law for several years now, it is still widely misunderstood. The attached PDF story from the Ventura County Star shows just how misunderstood this law is. A owner at a condo association cannot, without the associations approval, place a satellite dish on the common area and that is exactly where this disgruntled owner placed his. What do you think?Download ventura_county_star__ventura_010505.pdf

Calaveras Enterprise  - April 13, 2005 

Copperopolis couple get their house back

By Vanessa Turner

Tom and Anita Radcliff got the deed to their house back and the Copper Cove couple is ready to get on with their lives.

The Radcliffs get to keep their home and have received money from the Copper Cove Lake Tulloch Homeowners Association and Coast Assessment Services of Garden Grove as part of a lawsuit settlement reached Friday.

Back in December 2003, the Radcliff's home was foreclosed on and auctioned off for $70,000 after they failed to pay a $120 association bill.

The Radcliffs continued to live in their home while they sued the association, Coast and Robert Vardanega of Oakland, the man who bought their home.

The association and Coast settled out of the lawsuit two months ago, the Radcliff's attorney Michael Macomber of Sonora said.

"They paid money damages," Macomber said. "It was a cash payment."

During a case settlement conference Friday, Macomber announced he and Vardanega's attorney agreed on a settlement at 10:30 a.m. that morning.

Macomber wouldn't say what the Radcliffs would pay Vardanega to get their home back.

"He's entitled to get his initial payment plus 10 percent," he said.

The paperwork still needs to be drawn up between the two parties and a case settlement conference is set for July 11.

If dismissal papers are filed before that, that date will be vacated, Judge Dwayne Martin said.

Martin told Macomber he did, "Good work. I'm sure you saved their home."

"It's all we can expect," Anita Radcliff said about the settlements. "I just want to put it behind us now."

The Radcliff's ordeal sparked an attempt to get legislation passed that would prevent homeowners' associations from foreclosing for trivial delinquent fees.

One such bill, co-authored by former Sen. Rico Oller, R-San Andreas and Sen. Denise Ducheny, D-San Diego, was vetoed by the Governor in September 2004.

This year Ducheny renewed her attempt by introducing very similar legislation and vowing to work with the governor to get the bill passed.

Download owner_of_recordarticlefnl.pdf

BILL BANNING FORECLOSURES ON SMALL DEBTS ADVANCES

By JIM WASSERMAN
Associated Press

SACRAMENTO - A bill proposing to ban home foreclosures as a tool to collect small debts in private communities easily cleared a key Senate hurdle Tuesday, beginning a journey that could eventually collide with the veto pen of Gov. Arnold Schwarzenegger.

The Senate Judiciary Committee voted 4-1 to send the bill affecting more than one-fourth of California's households to a full Senate vote later this spring. Lawmakers passed a near identical bill last year making California's 37,000 homeowner associations use small claims court to collect unpaid sums below $2,500, but Schwarzenegger vetoed it.

Schwarzenegger said it could force dues-paying homeowners to make up for lost money caused by those who don't pay.

The new version, by Sen. Denise Ducheny, D-San Diego, would end the long-standing power of homeowner associations to auction off a member's home for failing to pay assessments that average about $200 a month in California.

"Often for less than $200 people are losing their homes and being evicted without the due process rights given to tenants," Ducheny told the committee. "We understand the need for everyone to pay their agreed-upon debts, but we also want to protect both the equity of homeowners and their due process rights."

Nearly a dozen homeowners across the United States have lost their homes over small unpaid sums since 2001, triggering widespread negative publicity for one of the nation's fastest growing residential lifestyles.

Ducheny's bill would continue to allow foreclosures for amounts over $2,500 without a court's review. It would also significantly toughen foreclosure practices, giving homeowners 90 days to get back their homes and make buyers at auctions pay a minimum of 65 percent of the home's value.

Attempts to reach compromises that would meet Schwarzenegger's favor haven't worked, Ducheny said, adding that meetings haven't led to any specific proposals.

Several retirees groups backed the bill Tuesday, saying it protects home equity that takes a lifetime to build.

"Homeowners need to pay assessments and homeowners associations need legal tools to collect them," said Marjorie Murray, lobbyist for the California Alliance for Retired Americans. "But it is our strong belief that foreclosure should be the last procedure used and only used reasonably."

While no definitive figures exist of how many foreclosure actions associations initiate in California, an unofficial survey of state association lawyers last summer indicated nearly 20,000 filings during the last five years. Most homeowners quickly paid their debts.

Lobbyists representing association managers and boards of directors tried unsuccessfully to reduce the amount qualifying for small claims court collection procedures to $1,000 or six months worth of late payments. They also failed to win changes to make the bill effective for only two years.

Though the bill moved forward, significant disagreements still loom over its future.

Especially large is the idea of a $2,500 grace period before foreclosure can begin.

''We feel by placing the threshold it requires us to increase assessments on all other innocent homeowners who do try to pay their assessment on time,'' said Jennifer Wada, lobbyist for the California Association of Community Managers.

California associations collect dues for a range of needs that including lawn mowing, pool maintenance and private security.

Ducheny's original bill surfaced last year after a pair of Calaveras County retirees lost their home for missing a $120 payment to their association. The couple still live in the residence pending the outcome of a lawsuit against the association and collection agency.