Partial payment law
DAVIS-STIRLING ACT
Civil Code §1367. Association’s Lien Rights.
[New: Civ. Code §5740]
(a) A regular or special assessment and any late charges, reasonable costs of collection, and interest, as assessed in accordance with Section 1366, shall be a debt of the owner of the separate interest at the time the assessment or other sums are levied. Before an association may place a lien upon the separate interest of an owner to collect a debt which is past due under this subdivision, the association shall notify the owner in writing by certified mail of the fee and penalty procedures of the association, provide an itemized statement of the charges owed by the owner, including items on the statement which indicate the assessments owed, any late charges and the method of calculation, any attorney’s fees, and the collection practices used by the association, including the right of the association to the reasonable costs of collection. In addition, any payments toward that debt shall first be applied to the assessments owed, and only after the principal owed is paid in full shall the payments be applied to interest or collection expenses.
Civil Code §1367.1. Notice of Lien; Priority of Payments; Payment Under Protest; Monetary Penalties; Applies to Liens Recorded After January 1, 2003.
(a) A regular or special assessment and any late charges, reasonable fees and costs of collection, reasonable attorney’s fees, if any, and interest, if any, as determined in accordance with Section 1366, shall be a debt of the owner of the separate interest at the time the assessment or other sums are levied. [New: Civ. Code §5650(a)] At least 30 days prior to recording a lien upon the separate interest of the owner of record to collect a debt that is past due under this subdivision, the association shall notify the owner of record in writing by certified mail of the following:[New:Civ. Code §5660 (intro)]
(1) A general description of the collection and lien enforcement procedures of the association and the method of calculation of the amount, a statement that the owner of the separate interest has the right to inspect the association records, pursuant to Section 8333 of the Corporations Code, and the following statement in 14-point boldface type, if printed, or in capital letters, if typed: “IMPORTANT NOTICE: IF YOUR SEPARATE INTEREST IS PLACED IN FORECLOSURE BECAUSE YOU ARE BEHIND IN YOUR ASSESSMENTS, IT MAY BE SOLD WITHOUT COURT ACTION.”(2) An itemized statement of the charges owed by the owner, including items on the statement which indicate the amount of any delinquent assessments, the fees and reasonable costs of collection, reasonable attorney’s fees, any late charges, and interest, if any.
(3) A statement that the owner shall not be liable to pay the charges, interest, and costs of collection, if it is determined the assessment was paid on time to the association.(4) The right to request a meeting with the board as provided by paragraph (3) of subdivision (c).
(5) The right to dispute the assessment debt by submitting a written request for dispute resolution to the association pursuant to the association’s “meet and confer” program required in Article 5 (commencing with Section 1363.810) of Chapter 4.(6) The right to request alternative dispute resolution with a neutral third party pursuant to Article 2 (commencing with Section 1369.510) of Chapter 7 before the association may initiate foreclosure against the owner’s separate interest, except that binding arbitration shall not be available if the association intends to initiate a judicial foreclosure. [New: Civ. Code §5660(a)-(f)]
(b) Any payments made by the owner of a separate interest toward the debt set forth, as required in subdivision (a), shall first be applied to the assessments owed, and, only after the assessments owed are paid in full shall the payments be applied to the fees and costs of collection, attorney’s fees, late charges, or interest. When an owner makes a payment, the owner may request a receipt and the association shall provide it. The receipt shall indicate the date of payment and the person who received it. The association shall provide a mailing address for overnight payment of assessments. [New: Civ. Code §5655]
.
ALSO SEE Civil Code §5730 [Old: Civ. Code §1365.1]
.
When an owner makes a payment, he or she may request a receipt, and the association is required to provide it. On the receipt, the association must indicate the date of payment and the person who received it. The association must inform owners of a mailing address for overnight payments. (Section 1367.1 of the Civil Code)
An owner may, but is not obligated to, pay under protest any disputed charge or sum levied by the association, including, but not limited to, an assessment, fine, penalty, late fee, collection cost, or monetary penalty imposed as a disciplinary measure, and by so doing, specifically reserve the right to contest the disputed charge or sum in court or otherwise.
.
COMMENT
So… how is one supposed to contest a charge in court, after making a payment under protest, with the association then rejecting the payment? To me is sure looks like you can make any payment at any time whether under protest or not. When you go to court you can protest the payment or not. This last section under the old code 1365.1 underlines the fact you can make payments before court.
.
Note – nowhere does it say they can refuse payments. In fact it states just the opposite – Any payments made SHALL first be applied to assessments. I am not an attorney but three Superior Court Judges agreed with our argument and wrote a certified opinion in our favor.
.
The problem is this. How does a homeowner fight the big bad association by themselves? In the Huntington Continental 450 families are paying the Association per month – $90,000 monthly. The Association has a million dollars on reserve. The laws can be written in stone but if the Board of Directors and the HOA Attorneys don’t follow the laws what is a poor homeowner to do? This is a very dire situation for each and every homeowner in an Association.
.
You can show them the law, your can read them the law, you can explain the law but if they refuse to follow the law you lose and they they take your house. The attorney firms have made a racket out of stonewalling HOA members. They know its a Goliath v. David fight and they know they are Goliath. At every corner they threaten you with Attorney fees. The law states the prevailing party is rewarded attorney fees. It’s a scary battle to fight Goliath.