HOA Law Blog

By Sean D. Allen, Associate, SwedelsonGottlieb. Edited by David C. Swedelson, Partner, SwedelsonGottlieb

So, your Association has a homeowner who is delinquent on his assessments. Before you are able to make any progress on collection and before a lien is recorded, you receive notice that he has filed for bankruptcy. What happens next?

The moment a debtor files for bankruptcy, an “automatic stay” is imposed. The automatic stay prevents creditors from taking any action to collect from a debtor. This is intended to give the debtor some breathing room and allow him to clearly evaluate his financial position without having to fend off creditors. Therefore, all collection efforts must cease until the automatic stay is either lifted or terminated.

Continue reading " How Bankruptcy Affects Assessment Collection " »

By Sean D. Allen, Associate, SwedelsonGottlieb. Edited by David C. Swedelson, Partner, SwedelsonGottlieb

We have all heard the terms “Senior Lien”, “Junior Lien”, “First Mortgage”, “Second Trust Deed” and whatever other variations of those terms are out there. Here I am going to explain exactly what those terms mean and how they relate to a foreclosure action.

A lien is simply a way to secure a debt to a piece of property so that the association has some priority especially over the delinquent owner's unsecured debts. When someone owes money to another, that debt can be secured by recording a lien. That debt is then attached to the property, and the lien must be paid before the property can be sold. The property becomes collateral for the debt. If the borrower fails to pay the debt when due, the lien holder can force the sale of the property in a foreclosure action in order to get paid.

Continue reading " Lien Priority Explained – Who Gets Paid After A Foreclosure " »

By Sandra Gottlieb, Senior Partner SwedelsonGottlieb; Condo Lawyer and HOA Attorney

We know that there is a tendency to classify some condo and HOA staff as independent contractors rather then employees. Some community association boards want to do this because they think that such a classification will mean that their association will not have to pay for all of fees, charges, taxes, etc. that are normally associated with an employee. They also think that they can avoid vacation pay, payroll taxes, medical insurance, etc.

The staff member may want the independent contractor classification as then they believe that they will not have taxes deducted from their checks, that they can then write off their car and other expenses and benefit in other ways.

Well, the government knows what you are doing and they are not happy about it. There has been an increasing effort by the State and Federal governments to address this “problem". The fact is that in many situations, that staff member is not really an independent contractor, as they work full time at the association, use the equipment, etc. provided by the association and get their direction from the association.

Continue reading " New Law—Independent Contractors: Willful Misclassification SB 459 Corbett " »

By David C. Swedelson, Senior Partner SwedelsonGottlieb, California Condo Lawyer and HOA attorney

Interesting article in the October 23, 2011 edition of the Los Angeles Times regarding recent rule revisions by the Federal Housing Administration (FHA). Follow this link to read the article. We have been reporting on this issue, follow this link to read our blog post from August 21, 2011, "CAI Slams latest FHA Guidance". As pointed out by the article, a little-publicized switch in federal mortgage policy is causing problems for condominium sellers, buyers and homeowner association boards across the country.

The recent series of rule revisions by the Federal Housing Administration has apparently caused thousands of common-interest developments to become ineligible for FHA mortgages. The article suggests that this has abruptly shut off loan money for would-be buyers and refinancers, forcing them to pursue conventional bank loans requiring much higher down payments — sometimes 20% or higher versus the FHA's 3.5% minimum — that they often cannot afford.

The FHA defends the rule changes it has adopted, which focus on community association budgets, insurance and financial reserves, as having been prudent and designed to avert losses from delinquencies and foreclosures. The FHA nonetheless acknowledges that thousands of community associations have failed to obtain or apply for required recertifications under the new rules. “Out of approximately 25,000 common-interest developments nationwide with expiration dates for FHA eligibility between last December and Sept. 30 of this year, only 2,100 — just 8.4% — have been approved or recertified by the agency, according to Lemar Wooley, an agency spokesman."

Continue reading " New FHA Certification Rules Make Compliance Difficult " »

Blog posting by David C. Swedelson, Condo lawyer and HOA attorney; Senior Partner SwedelsonGottlieb

Amazing story out of Florida involving an attorney/owner of a condominium who asked her condo association to place a trash receptacle in the mail room so she could have a convenient place to dispose of her junk mail. When her association declined the request because of a concern about having to maintain that trash receptacle (as owners may put more than junk mail in the trash), the owner decided that she would just dump her mail on the floor. This is a true story; you can’t make this stuff up.

Continue reading " Attorney Owner Wins Condo Association Wastebasket War, Uses $201K Check to Pay Off Mortgage " »