RaquelB (Arizona)
Posts: 17
Posts: 17
Posted:
Our HOA, which is kind of a developer-run HOA (but I bought my lot before the developer came along and formed the HOA) assessed our vacant lots $35,000 to put in streets, sewers, utilities, etc., then recorded a lien on all our lots for $35k and then assigned the assessment to investors who were promised 10%. Now one of the assignees is trying to collect more than half a million dollars ($550,000) on ten of my lots with more than six years interest.
I have a lawyer, we're going to challenge the liens expired due to statutes of limitations but he also wants to challenge whether it's legal for an HOA to assign the lien to a 3rd party.
I did a little research on this at the law library and on the internet, all I can find is a California statute that makes it illegal:
(g) An association may not voluntarily assign or pledge the
association's right to collect payments or assessments, or to enforce
or foreclose a lien to a third party, except when the assignment or
pledge is made to a financial institution or lender chartered or
licensed under federal or state law, when acting within the scope of
that charter or license, as security for a loan obtained by the
association; however, the foregoing provision may not restrict the
right or ability of an association to assign any unpaid obligations
of a former member to a third party for purposes of collection.
Several lawyers I've spoken to -- when I tell them that the Special Assessment was assigned to a 3rd party ask me, "is that legal"? They seem to think it should be illegal but banks are allowed to sell mortgages so why can't HOAs sell liens/assessments to raise money?
I have a lawyer, we're going to challenge the liens expired due to statutes of limitations but he also wants to challenge whether it's legal for an HOA to assign the lien to a 3rd party.
I did a little research on this at the law library and on the internet, all I can find is a California statute that makes it illegal:
(g) An association may not voluntarily assign or pledge the
association's right to collect payments or assessments, or to enforce
or foreclose a lien to a third party, except when the assignment or
pledge is made to a financial institution or lender chartered or
licensed under federal or state law, when acting within the scope of
that charter or license, as security for a loan obtained by the
association; however, the foregoing provision may not restrict the
right or ability of an association to assign any unpaid obligations
of a former member to a third party for purposes of collection.
Several lawyers I've spoken to -- when I tell them that the Special Assessment was assigned to a 3rd party ask me, "is that legal"? They seem to think it should be illegal but banks are allowed to sell mortgages so why can't HOAs sell liens/assessments to raise money?