California Civil Code Section 5660 plays a pivotal role in regulating how homeowner associations (HOAs) handle delinquent assessments. Instituted in 2013, this legislation requires HOAs to follow strict guidelines before recording a lien on an owner’s separate interest to recover past due assessments. Failure to comply can expose HOAs to legal ramifications. This article aims to explore the salient features of Section 5660 and demonstrate its real-world implications through a hypothetical scenario.
Key Provisions of Civil Code Section 5660
30-Day Pre-Lien Notification
The HOA is mandated to notify the owner of the separate interest by certified mail at least 30 days before recording a lien. The notice should include:
Subsection (a)
A general description of the collection and lien enforcement procedures, the method of amount calculation, the right to inspect association records, and a bold or capitalized warning about the potential foreclosure.
Subsection (b)
An itemized statement indicating the delinquent assessments, collection fees, attorney fees, late charges, and any applicable interest.
Subsection (c)
A statement clarifying that the owner won’t be liable for charges if it is determined that the assessment was timely paid.
Subsection (d)
The right of the owner to request a meeting with the HOA board.
Subsection (e)
The option to dispute the assessment through the association’s “meet and confer” program.
Subsection (f)
The right to engage in alternative dispute resolution before the initiation of foreclosure proceedings by the association.
Hypothetical Scenario: The Case of Jane Doe
Jane Doe, an owner in the XYZ Homeowners Association, in Alameda County, who found herself in a financial bind and missed two consecutive quarterly assessments. The HOA, abiding by Section 5660, sent her a certified pre-lien notice 35 days before recording the lien, explaining all her rights and options under each subsection.
Jane, alarmed by the notice, immediately exercised her right under Subsection (d) to request a board meeting. At the meeting, she produced evidence showing that she had indeed paid one of the assessments but due to a clerical error, it was not credited to her account. The HOA, realizing the mistake, acknowledged that under Subsection (c) Jane would not be liable for the charges relating to that assessment.
Furthermore, Jane took advantage of her right under Subsection (f) to undergo alternative dispute resolution, which helped her and the HOA agree on a reasonable payment plan for the remaining delinquent assessment.
Conclusion
California Civil Code Section 5660 imposes strict requirements on HOAs to ensure transparent and fair collection practices. Understanding this legislation is crucial for both HOAs and homeowners, as it not only mandates procedural obligations but also provides several layers of protection for homeowners against unfair lien and foreclosure actions.
Disclaimer: This article is for informational purposes only and should not be construed as legal advice. Consult a qualified attorney for advice tailored to your specific circumstances.
(Added by Stats. 2012, Ch. 180, Sec. 2. Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)
