California Homeowners Contemplating Bankruptcy : Know your Foreclosure Rights When Dealing With Your Home Owners Association

Posted by on Nov 9, 2011 in Chapter 11 Bankruptcy Issues, Chapter 13 Bankruptcy Issues, Chapter 7 Bankruptcy Issues, Foreclosure & Bankruptcy | 11 comments

Believe it or not, millions of Californians live in Home Owners Associations otherwise known as HOA’s.

California Homeowners who are facing problems with their HOA must recognize and understand what the HOA may and may not do. For example, while an HOA has the power to foreclose to force assessment payments under California Civil Code Section 1367.1, the assessments must be at a minimum of $1800 EXCLUDING collection costs. However, foreclosure may nonetheless be appropriate where the debt is less than $1800 but has been owed for 12 of more months to the HOA.

Typically an HOA will use non-judicial forclosure to collect but judicial foreclosures are always a possible means to foreclose on the property. However, any decision by the HOA must make economic sense, where the ends justify the means.

Where an assessment lien is at issue, California homeowners must keep in mind that the “one form of action rule” under California Civil Procedure Section 726 no longer applies to recovery of monies due under an assessment lien. CCP Section 726 makes foreclosure the sole remedy for a lienholder to recover monies; that means the particular lienholder enforcing the foreclosure is unable to concurrently or subsequently pursue the homeowner personally for the balance of any monies still unpaid. However, the Davis-Stirling Act excepts the effects of CCP 726 for collection efforts related to assessment liens. That means the HOA can file a complaint against a homeowner to collect delinquent dues related to an assessment lien even where an assessment lien has been recorded against the home itself.

If you are a California Homeowner contemplating bankruptcy due to HOA issues, or any other issues, contact JCH Law Firm. Attorney Jeffrey Hsu is an experienced, honest, and affordable bankruptcy attorney who will assist you with your legal options in and out of bankruptcy. Call us at 1-800-371-5523. We are here to help.

11 Responses to “California Homeowners Contemplating Bankruptcy : Know your Foreclosure Rights When Dealing With Your Home Owners Association”

  1. arthur basile says:

    My wife and I both filed Chapter 7 last DEC. we are working to keep our home with our lender through a loan modification now and we are being threatened by the HOA that they are going to foreclose and take title to our property.
    They have filed a motion for relief from stay, and i think now we need an attorney as we did not have one through the BK procedures!!!
    We are in Ventura county, and need to know if there is anything we can do to stop them and discharge the debt?
    Thank you

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