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Seller has delinquent dues

Started by JohnD63 • 13 replies • 839 views

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JohnD63 (California)
Posts: 4
Posted:
I'm treasurer of an HOA located in California. Owner of a unit is behind in HOA dues and refuses to pay because they paid for pest control and shoddy dry wall patching out of pocket without bringing anything to the HOAs attention.

The home is not in escrow but the owner is requesting the HOA documents. Can I withhold documents until the dues are paid or until the unit goes into escrow? Again the unit is not in escrow but is for sale. My concern is the unit goes into escrow and closes without the boards knowledge so we cant make a demand through escrow.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Slap a lien on them immediately.
RichardP13 (California)
Posts: 3,868
Posted:
How much do they owe? If the amount is substantial, why wasn't anything done until the last minute.

Sorry, JohnC46, you can't just slap a lien on a property, especially in California and it's something you should know from experience. It will take a minimum of 76 days to "slap" a lien.

Do you handle your own escrows or have someone do them for you. Don't EVER without documents during a selling process. Make sure that whoever does the demand fills the form out ACCURATELY and CORRECTLY!
JohnD63 (California)
Posts: 4
Posted:
We have been on them for months. The owner simply ignores our demands. They feel justified in not paying November and December dues because they had out of pocket expenses.

We looked into getting a lien but figured it was more trouble than it's worth. Again they are trying to sell the unit but as far as we know there's no offers and it's not in escrow. They just want the HOA docs ahead of time.

We got advice from a nonattorney to refuse HOA documents unless it's from an escrow officer as we can make a demand through escrow once we know who the escrow is.
RichardP13 (California)
Posts: 3,868
Posted:
Quote:
Posted By JohnD63 on 06/26/2018 3:16 PM
We have been on them for months. The owner simply ignores our demands. They feel justified in not paying November and December dues because they had out of pocket expenses.

We looked into getting a lien but figured it was more trouble than it's worth. Again they are trying to sell the unit but as far as we know there's no offers and it's not in escrow. They just want the HOA docs ahead of time.

We got advice from a nonattorney to refuse HOA documents unless it's from an escrow officer as we can make a demand through escrow once we know who the escrow is.

My old HOA said that about an owner, that it was more trouble than it is worth and now they are $20,000.00 behind. The lien protects the HOA, the same one that you are the treasurer of.

Are you self-managed? Do you do your own escrows?

Good Luck
JohnD63 (California)
Posts: 4
Posted:
They have paid subsequent dues but have not paid two months in 2017. The question is can we withhold HOA docs until requested by escrow?
RichardP13 (California)
Posts: 3,868
Posted:
You might be best to speak to an attorney. It's not a path I would go down.
DouglasK1 (Florida)
Posts: 2,046
Posted:
Quote:
Posted By JohnD63 on 06/26/2018 4:03 PM
They have paid subsequent dues but have not paid two months in 2017. The question is can we withhold HOA docs until requested by escrow?

I'm not in CA, but a quick search of the Davis-Stirling web site suggests you can't. This page:
https://www.davis-stirling.com/HOME/Escrow-Disclosures#axzz1yjimSodF

includes:
Deadline for Production. Upon written request, the association shall, within ten days of the mailing or delivery of the request, provide the owner of a separate interest, or any other recipient authorized by the owner, with a copy of the requested documents. (Civ. Code §4530.)

Escaped former treasurer and director of a self managed association.
DouglasK1 (Florida)
Posts: 2,046
Posted:
Quote:
Posted By DouglasK1 on 06/26/2018 4:39 PM
Posted By JohnD63 on 06/26/2018 4:03 PM
They have paid subsequent dues but have not paid two months in 2017. The question is can we withhold HOA docs until requested by escrow?


I'm not in CA, but a quick search of the Davis-Stirling web site suggests you can't. This page:
https://www.davis-stirling.com/HOME/Escrow-Disclosures#axzz1yjimSodF

includes:
Deadline for Production. Upon written request, the association shall, within ten days of the mailing or delivery of the request, provide the owner of a separate interest, or any other recipient authorized by the owner, with a copy of the requested documents. (Civ. Code §4530.)

I forgot to note that the page also says:
Associations are allowed to collect a reasonable fee
and
Delivery of the documents may not be withheld for any reason nor subject to any condition except the payment of the fee

You don't say how much the owner owes, but maybe a fee could recoup some of that. Richard might have an idea what "reasonable" might encompass.
Escaped former treasurer and director of a self managed association.
RichardP13 (California)
Posts: 3,868
Posted:
IF the association handles escrow correctly, they will get all of their money back.
GeorgeS21 (Florida)
Posts: 3,808
Posted:
Couple of points:

1. Documents are pretty easy to provide, now. If they are already in pdf format, just send them. If they have been recorded, just send them the link. Holding up documents, or even talking about it the way you did sounds silly in the age of open information.

2. If they have not paid dues, and you have suitable processes and records of their failure to pay, simply write them a letter saying they either need to pay, or you will lien the property - this starts the ball rolling. California laws must be complied with when you do this. Not liening makes zero sense and is almost a failure to act as a fiduciary of the HOA.
JohnD63 (California)
Posts: 4
Posted:
Our HOA is small with four units. We have no website. All documents are in paper. Our bylaws and CCRs say that if documents are sent to escrow they need to be sent via certified mailed, granted they were written in the 1970s before email.

Like I said we looked into a lien and it's not worth it based on the amount owed. In California it's more complicated than paying 50 bucks or so to record a lien with the county. The attorney fee exceeds the dues owed. Like I also said they listed their house for sale and there is no escrow yet. We have never had anyone request documents before escrow, but that is likely irrelevant.

I already mentioned the concern of the house selling without anyone being notified and thus, we cant place a demand through escrow.
GeorgeS21 (Florida)
Posts: 3,808
Posted:
Hmmm ... first order of business, then, is to scan your docs (CCRs and Bylaws and Rules and Regs) and then send them ...just get past the charging thing. It made sense 10 years ago, but does not now. Charging or delaying is something that simply makes things worse.

So, in California, you have to be an attorney to lien a property? Some states just use a form, downloadable, and then you fill it out and go to the courthouse and file it.
RichardP13 (California)
Posts: 3,868
Posted:
While you don't need an attorney to file a lien, it's not as easy as downloading a form in California.

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