articles by barry A. Ross

Recent Developments In Homeowner Association Law

A shift in the balance of power

THERE ARE 36,000 COMMON INTEREST DEVELOPMENTS IN CALIFORNIA comprising more than 3 million housing units occupied by approximately 7 million people. This is roughly one-quarter of the state's housing. With most of the new housing developments being common interest developments and the anticipated influx in population, these numbers are likely to increase in the years ahead. The Legislature has recognized an obligation to address some of the perceived abuses of common interest developments because of the large number of people residing in them.

During the 2005 session, the Legislature enacted several, new laws designed to address the perceived abuses; including limitations on assessment collections, limitations on the conveyance of the exclusive use of common area, procedural safeguards for elections,changes in the architectural decisions and increased access to homeowner association records.


Incidents were reported where homeowners associations were foreclosing on homes of low income senior citizens m order to collect the unpaid association dues of a relatively small amount (i.e., less than. $1,000), resulting in the loss of family homes, as well as the loss of substantial equity in their homes, in some instances, more than $100,000. When, an incident was investigated, the Board of Directors said it was not informed of this action by its staff and the property owners said they were not aware of what was happening!

Senate Bill 137 became effective on January 1,2006 (see Code of Civil Procedure §§ '116.540 and 729.035). This legislation provides special protection to the property owner where the delinquent assessments are less than. $1,800. In such a. case, the homeowners association may file a civil action in Small Claims Court. The homeowners association is not permitted to record a lien or initiate foreclosure until the unpaid assessment exceeds $1,800 or the assessments are more than 12 months delinquent.

In connection with any dispute relating to assessment collections, the homeowners association must offer the property owner both. internal dispute resolution and alternative dispute resolution before proceeding with foreclosure. In the event that the Board of Directors wishes to proceed with foreclosure, the Board of Directors must approve the decision by a majority vote and must provide written notice of this decision to the property owner. In addition, the homeowners association must provide the property owner with an Itemized statement of the charges owed by the property owner. Finally, the property owner has a 90 day right of redemption to recover the property after the foreclosure sale.

Copyrighted and printed with the permission of Orange County Lawyer