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When property is sold through non-judicial foreclosure on an assessment lien, buyers (third parties or the association) take ownership subject to a 90-day right of redemption, which allows the foreclosed owner to recover the property if the owner pays the delinquency and any fees and costs (Civil Code §1367.4(c)(4); Code of Civil Proc. §729.035).

This right of redemption is unusual in that it does not apply to non-judicial foreclosure on trust deeds; it was added to the law for community associations several years ago to help owners so they do not lose their homes because they did not pay their associations assessments or fees. Owners rarely take advantage of this right.
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Sandra L. Gottlieb, Esq. and Alex Noland, Esq. of SwedelsonGottlieb have had two new articles published in the O.C. View, the official magazine for the Orange County Regional Chapter of the Community Associations Institute.

Sandra’s article, Electronic Delivery, describes a recent amendment to Civil Code Section 1350.7 and the positive benefits for community associations when statutes are updated to reflect advances in technology. In this case, the legislature has streamlined the process for confirming a homeowner’s consent to electronic delivery of documents.

 

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When I read this article, it sounded like something that would and could happen at a homeowners association. A man was asked to prune a Sycamore tree on the grounds of a hotel. Instead of leaning his ladder against the trunk of the tree itself, he placed his ladder against the branch that he was pruning. So you already know what happened… when he cut the branch, it fell and he fell with it, 14 feet to the ground, breaking his heel and damaging his ligaments, with a 10 day stay in the hospital to recover from his injuries.

He then sued his employer, the hotel, claiming that they should have given him more training in workplace ladders. Give me a break. Hard to make this stuff up. Click here to read the article.

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Assemblymember Julia Brownley has proposed legislation that would impose new and unwarranted restrictions on the assessment collection process for California community associations. Without any showing that there is a need for this new law, her proposed new legislation would protect delinquent owners at the expense of their associations and all of the owners that timely pay their fees and/or assessments.

Phone or e-mail Assembly committee members today. (Alternatively, you may send a fax.)

Suggested text for objecting to AB 2502

Text of the current amended bill
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You may remember the three pigs’ response to the wolf when he demanded entry into their homes in the old children’s story.

Unfortunately, we have seen some cases where a few homeowners seem to consider their homeowners association to be a “wolf” and will not cooperate with the association’s reasonable requests to enter their property when necessary in order to perform the association’s duties under the association’s governing documents. Far from being the bad guy in the story, the association often needs to gain entry in order to perform tasks that directly benefit the individual owner, as well as the association in general. Inspection of water leaks, mold testing, sound attenuation testing, and inspection for and/or repair of construction defects are just some examples. Even though the association’s right to do this may be explicitly spelled out in the association’s governing documents, some homeowners refuse to allow the association entry.

In some cases, a lawsuit must be filed, seeking a court order to allow entry. Attorneys’ fees and costs may be awarded to the association, in addition to the cost for a locksmith, which may become a judgment lien against the owner’s property. And all of these costs could have been avoided by the owner simply opening the door!

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No joke; this was the headline in a recent edition of the Ventura County Star newspaper. The article describes a bitter neighborhood dispute at the Bridle Path Community Association. There are accusations of ballots not being counted and other election issues. It appears that there is a fight by some to get on the board, all apparently the result of a dispute involving owners who fought to keep eight cows on their ranch style property. The article describes the acrimony at this community and states: “The topper was a FedEx delivery – cow patties (not the kind you eat) nestled in happy face boxes with a knife and fork – sent last spring to four of the five Bridle Path HOA board members. Since then, four board members have resigned for various reasons and replacements had to be appointed to the volunteer positions.” Although these types of disputes are not that uncommon, they are usually not so public. Interesting reading.

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We are seeing many associations deferring common area maintenance and repair because they are afraid to increase their regular assessments or levy special assessments because they are concerned that the owners cannot pay any more money. In many cases, associations are experiencing 20% to 30% (or more) delinquencies. This is but one additional consequence from the Great Recession. What boards and their association management need to understand is that their buildings were not designed to last forever, and their useful lives are reduced when maintenance and repair is deferred. More importantly, deferred maintenance usually results in a higher cost of repair later.

We were therefore not surprised by an article in the Santa Cruz Sentinel that reported on a 50-year-old condominium building that was yellow tagged by the city after the owners noticed the roof was sagging. Eight residents were required to temporarily relocate while repairs (including shoring) were made to the sagging roof.

While we understand that many associations are having hard times and difficulty collecting assessments, deferring maintenance is not a good idea, as it will not only increase the cost of repair later when the problem is more serious and there is damage to the structure of the buildings and the interior of units, but it will also lead to lawsuits from owners who have suffered damage to their units or a diminution in the value of their property.

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We recently received an interesting request from a board of directors regarding amending the pet provision in their Declaration of Covenants, Conditions and Restrictions. Apparently, many members of the association have a distinct love of ferrets. Following is the language we developed for this association…
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E-mail has become the communication method of choice for many board members and association management. It is a rare board member or manager that does not utilize e-mail, and while we all can agree that e-mail has improved our respective ability to communicate with one another, it does have its downsides. And now, text messaging is becoming an important communication tool; just consider what you say before sending that message.

You cannot help seeing the headlines about the many major company and public officials, sports and entertainment figures that have been brought down by their e-mails and/or text messages (and even tweets). Many company executives that are currently or recently being prosecuted for bringing down their companies and/or defrauding shareholders have to defend their e-mails. In many cases it is the e-mails themselves that got these people into trouble.
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Recent reports indicate that about 4 million U.S. homeowners are 90 days or more delinquent on their loans or in foreclosure proceedings. Many experts are forecasting another wave of foreclosures. Follow these links for some interesting stories from the following sources: L.A. Times, Foreclosure Pulse, and MSN Money Central
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