Facing Collections/Foreclosure in CA

Hi Everyone,

My nephew contacted me because he is facing collections/foreclosure on his condo in California. Apparently there is an arbitration process that he can use to help settle the dispute. I live in Connecticut and the state doesn't have anything like that so I can't offer much guidance. Initially, the HOA wanted him to pay the balance owed in 8 months and he proposed a longer repayment period - 16 months I think. The HOA did not accept his proposal and eventually sent it to collections - which is the very beginning steps to foreclosure if it goes unpaid. He mentioned that there is arbitration process and I wanted to learn more about that from someone that may have first hand knowledge on how it works?

Thanks

Here's a Google AI article on the subject - https://www.google.com/search?q=california+alternative+dispute+resolution&oq=california+alternative+dis&gs_lcrp=EgZjaHJvbWUqCAgBEAAYFhgeMgYIABBFGDkyCAgBEAAYFhgeMggIAhAAGBYYHjIICAMQABgWGB4yCAgEEAAYFhgeMggIBRAAGBYYHjINCAYQABiGAxiABBiKBTINCAcQABiGAxiABBiKBTIKCAgQABiABBiiBDIHCAkQABjvBTIHCAoQIRiPAjIHCAsQIRiPAjIHCAwQIRiPAtIBCTI0NzQzajBqN6gCELACAfEFtg_cpve-9Kc&client=tablet-android-tmus-us-rvc3&sourceid=chrome-mobile&ie=UTF-8#lfId=ChxjMe

I don't know whether mediation or arbitration would be better for your nephew, but I suspect he n eeds to come up with a faster payment plan, say, one year, instead of 16 months. As a firmer board treasurer, I'd be looking at payment history, current financial issues (e.g. job loss and they must be documented), previous contacts with the board regarding the debt. In b short, if you've been honest from the beginning about your financial situation, the more willing I'd be to negotiate a reasonable p l and. The amount of the debt n is the starting point - tge longer it remains unpaid the more difficult it becomes to collect.

I would vote to foreclose as early as possible. Why? Because condominiums cannot operate to the highest standard possible without assessment income. Better to foreclose, pay off the attorney fees with the house sale, and take whatever is legally allowed from the rest.

That's a duty of a director.

Oh and your nephew will be paying the HOA attorney fees for the costs of collection.

What is there to arbitrate? Your nephew admits he owes the money and his position is 8 months, which is generous, is unacceptable. He obviously doesn’t have good credit or he could borrow the money from a commercial lender and could easily borrow with a qualified co signer. (Like his uncle).

It’s amazing why people think HOAs should be a lender of last resort when no one else with accept the same risk. I’d tell your nephew to get a part time job, pay down the debt as best he can during the 8 months and then ask the HOA for more time after he has shown he is motivated to reduce the balance owed.

It appears in CA an HOA board must accept a payment plan after a lien is placed, but this does not apply to assessments secured by a lien that is more than 12 months delinquent. Paying down a debt to less than $1,800 end a foreclosure.

It’s unclear who gets to determine the terms of the repayment plan.