Because the Association is responsible for managing, maintaining and repairing the common areas, timely payment of assessments is extremely important to the operations of the Association. Owners' failure to pay assessments when due creates a cash-flow problem for the Association and disrupts operations. As a result, the Board has adopted the following policies for the collection of delinquent assessments.
Assessment Due Date. The regular annual assessment is due and payable on December 1. Any Dues payments not received at the Club Donatello Administrative Office on or before close of business on December 15, are classified as Late, and will then include the following charges:
Delinquent Assessments. Any assessment not paid when due shall become delinquent if not paid by December 15 (“the Date of Delinquency”). Any Dues payments not received at the Club Donatello Administrative Office on or before close of business on December 15, are classified as Late, and will then be subject to the following charges as of the following dates:
- As of December 15 a 10% delinquent Assessment Fee of total amount due.
- As of January 7, an initial $150 Administrative Collection Fee will be added for each PIU that remains Delinquent
- As of February 4, an additional $75 Administrative Collection Fee will be added for each PIU that remains Delinquent.
In addition to the above, any assessment payment not paid by December 31 will accrue interest at the rate of ten percent (10%) per annum. Interest will thereafter continue to accrue both on the delinquent assessment as well as on any unpaid Assessment Fees then or thereafter assessed because of continued nonpayment of the assessment.
Liability for Collection Costs. All late charges, interest, attorneys' fees, and collection costs incurred by the Association will be added to the owner's account and will become the liability of the owner.
Enforcement Rights. Assessments are the separate debt of owners. In addition to any other rights provided for by law or described in the Association's CC&Rs, Bylaws or other governing documents, the Board has the right to collect delinquent assessments as follows:
- File Suit. The Association may commence and maintain a lawsuit directly on the debt without waiving its right to establish a lien and initiate foreclosure against the owner's Unit for the delinquent assessment. In any action to collect delinquent assessments, late charges or interest, the prevailing party will be entitled to costs and reasonable attorneys' fees. If such costs and fees are awarded to the Association, they will become a reimbursement special assessment against the owner.
- Lien and Foreclosure. The Association may file a lien against the owner's Unit for the amount of the delinquent assessment together with any late charges, interest, costs, attorneys' fees and penalties. The Association, through its Board, may bid on the Unit at the sale, and may hold, lease, mortgage, and convey the acquired Unit.
- Additional Remedies. The remedies described above are in addition to and not in substitution of any other rights and remedies the Association may have.
Lien and Nonjudicial Foreclosure. Upon any assessment becoming delinquent and prior to the recordation of a lien, the Association will use the following procedures
- Notice of Delinquency. A notice will be mailed to the owner via regular and certified mail to pay the account in full or a lien will be recorded against the owner's property. Included in the notice will be:
- A copy or summary of this collection policy;
- The method of calculation of the amount owed;
- A statement that the owner has the right to inspect the Association records, pursuant to Section 8333 of the Corporations Code;
- 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 their method of calculation, and interest, if any;
- 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; and
- The owner's right to request a meeting with the Board to discuss a payment plan.
Recording of Lien. If the owner fails to bring the account current, a lien will be recorded against the owner's property.
Notice of Lien. Within ten (10) days following recordation of the lien, a copy of the lien will be mailed to all owners of record for that property as provided for in Section 2924b of the Civil Code.
Foreclosure. Thirty (30) days following recordation of the lien, foreclosure may begin. In lieu of foreclosure, or concurrently, a lawsuit may be filed against the owner personally if the Board concludes such action is in the best interests of the Association.
Returned Checks. Returned checks are subject to a $30.00 service fee.
No Offsets Allowed. As required by law, owners may not offset payment of their assessments for any reason.
Crediting Payments. Any payments received will be credited to the outstanding balance in the following order: special assessments, reimbursement special assessments, regular assessments, monetary penalties and fines for rules violations, late charges, attorneys' fees and costs, and interest.
Attorneys' Fees. If a lawsuit or foreclosure action is initiated by the Association to recover assessments, the Association is entitled to recover not only the amount in default but also reasonable costs of collection, including title company charges and attorney fees as provided for by statute as well as the Association's CC&Rs, Bylaws or other governing documents.
NOTICE OF ASSESSMENTS AND FORECLOSURE
The statutorily required Notice of Assessments and Foreclosure is as follows:
This notice outlines some of the rights and responsibilities of Owners of property in common interest developments and the Associations that manage them. Please refer to the sections of the Civil Code indicated for further information. You may wish to consult a lawyer if you dispute an assessment.
Assessments become delinquent 15 days after they are due, unless the governing documents provide for a longer time. Failure to pay Association assessments may result in the loss of an Owner’s property through foreclosure. Foreclosure may occur either as a result of a court action, known as judicial foreclosure or without court action, often referred to as non- judicial foreclosure. For liens recorded on and after January 1, an Association may not use judicial or non- judicial foreclosure to enforce that lien if the amount of the delinquent assessments or dues, exclusive of any accelerated assessments, late charges, fees, attorney’s fees, interest, and cost of collection, is less than one thousand eight hundred dollars ($1,800).
For delinquent assessments or dues in excess of one thousand eight hundred dollars ($1,800) or more than 12 months delinquent, an Association may use judicial or non- judicial foreclosure subject to the conditions set forth Section 5720 of the Civil Code. When using judicial or non- judicial foreclosure, the Association records a lien on the Owner’s property. The Owner’s property may be sold to satisfy the lien if the amounts secured by the lien are not paid. (Sections 5600, 5650 and 5720 of the Civil Code). In a judicial or no- judicial foreclosure, the Association may recover assessments, reasonable costs of collection, reasonable attorney’s fees, late charges, and interest. The Association may not use nonjudicial foreclosure to collect fines or penalties, except for costs to repair common areas damaged by a Member or a Members Guest’s, if the governing documents provide for this. (Sections 5600 and 5650 of the Civil Code) The Association must comply with the requirements of Section 5650 of the Civil Code when collecting delinquent assessments. If the Association fails to follow these requirements, it may not record a lien on the Owner’s property until it has satisfied those requirements. Any additional costs that result from satisfying the requirements are the responsibility of the Association. (Section 5650 of the Civil Code).
At least 30 days prior to recording a lien on an Owner’s separate interest, the Association must provide the Owner of record with certain documents by certified mail, including a description of its collection and lien enforcement procedures and the method of calculating the amount. It must also provide an itemized statement of the charges owed by the Owner. An Owner has a right to review Association’s records to verify the debt. (Section 5650 of the Civil Code)
If a lien is recorded against an Owner’s property in error, the person who recorded the lien is required to record a lien release within 21 days, and to provide an Owner certain documents in this regard. (Section 5650 of the Civil Code). The collection practices of the Association may be governed by State and Federal laws regarding fair debt collection. Penalties can be imposed for debt collection practices that violate these laws.
When and 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 5650 of the Civil Code)
An Owner may dispute an assessment debt by submitting a written request for Dispute Resolution to the Association as set forth in Article 5 (Commencing with Section 5900) of Chapter 4 of Title 6 of Division 2 of the Civil Code.
In Addition, an Association may not initiate a foreclosure without participating in Alternative Dispute Resolution with a neutral third party as set forth in Article 2 (commencing with Section 5925) of Chapter 7 of Title 6 of Division 2 of the Civil Code, if so requested by the Owner.
Binding arbitration shall not be available if the Association intends to initiate a judicial foreclosure. An Owner is not liable for charges, interest, and costs of collection if it is established that the assessment was paid properly on time. (Section 5650 of the Civil Code)