Titleholders best interest to make sure HOAs have all their addresses
Los Angles Times
Donie Vanitzian
19 November 2016
Question:
My daughter just learned that her homeowner association is
foreclosing on her condominium, but she was never served with notice.
Doesn’t she have to be personally served? Also, the board told her she
did not comply with a legal requirement that she inform them of other
addresses she may have. I don’t understand why they need this
information. What is the existing law and is there a new law?
Answer:
The board should request current contact information from
association titleholders, and it’s in each owner’s best interest to
regularly update that information. No action adverse to a member, or
their property, may be taken without notice, but not all notices
require personal service.
A change in the law that becomes effective Jan. 1, Civil Code Section
4041, requires the association to obtain completed annual address
information from each titleholder. The law places a burden on owners
too, requiring them to provide written notice to the association of the
following:
1. The address or addresses to which notices from the association are
to be delivered, including alternative or secondary addresses.
2. The name and address of the titleholder’s legal representative, if
any, including any person with power of attorney or any person who can
be contacted in the event of the titleholder’s extended absence from
the property, whether it is owner-occupied or rented out.
Owners need to be diligent about this, because if the titleholder fails
to provide the required addresses, the address of the owner’s HOA
property shall be deemed to be the address to which notices are to be
delivered, even if the titleholder does not live there.
Owners also need to pay close attention to several existing laws
related to titleholders who are subject to homeowner association
enforcement actions.
An association may record a lien against an owner’s property in the
amount of any delinquent assessment, plus any costs of collection, late
charges and interest assessed, as specified, under Civil Code Section
5675. That decision to record a lien is strictly regulated by Civil
Code Section 5673, which states that the decision may be made only by a
majority vote of the directors in an open meeting, with the vote
recorded in the minutes.
Once the board votes, Civil Code Section 5660 requires an association
to send the owner of record a notice by certified mail at least 30 days
prior to recording a lien to collect the debt. That notice must include
lien-enforcement procedures, a general description of the collection
and an itemized statement of charges. It also must enumerate the
titleholder’s legal rights, including the right to inspect the
association records, to request a meeting with the board, to dispute
the debt and to request alternative-dispute resolution with a neutral
third party before initiation of foreclosure.
Then, once the lien is recorded, a copy of the notice of delinquent
assessment must be mailed by certified mail to the owner within 10
calendar days, according to Civil Code Section 5675.
Should a board’s enforcement action move toward foreclosure, that also
is highly regulated. An association that seeks to collect delinquent
assessments in the amount of $1,800, or more, or assessments that are
delinquent by more than 12 months and secured by a lien against an
owner’s property, can use judicial or non-judicial foreclosure, subject
to specified requirements under Civil Code Section 5720.
Notice of a lien can be served by mail to the titleholder. However,
foreclosure requires a board vote before initiating foreclosure
proceedings. If the titleholder lives in the unit, notice of
foreclosure must be personally served and cannot merely be mailed. If
the titleholder does not live in the unit, notice of foreclosure can be
mailed, under Civil Code Section 5705. Any notice of default in
assessments owed to the association (which is the first step in the
nonjudicial foreclosure process) must be personally served on the
titleholder.
A board’s failure to follow the law in any of these areas may
invalidate the lien or foreclosure process. But it is the titleholder’s
responsibility to make certain his or her information on file with the
association is kept current. Even though you may have sent the
communication using a recognized method of tracking, always ask for
written confirmation that this required information was received.
Zachary Levine, a partner at Wolk & Levine, a business and
intellectual property law firm, co-wrote this column. Vanitzian is an
arbitrator and mediator.
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