California - The California Senate did one step in the right direction to protect homeowners living in mandated properties from unjust liens and foreclosures and will give them 30 days to correct any problems before being hit by huge legal cost and/or foreclosure ambush. It will give homeowners as well the right to a hearing in front of the association board. This may not always be helpful since many homeowners claim that some of these dictatorial boards act like they are judge, jury and executioner, but it can possibly avoid the litigation and foreclosure trap used by many association attorneys to tag huge legal fees to small assessments actually due.

Bill AB 2289 passed the Senate with 32 AYES. Only two Senators voted against it : Senators Ackerman and Haynes. It would possibly be interesting to know their reasons? 

Please read as well the article - Courtesy of The Orange County Register :
Senate passes 30-day association lien notice

The bill was heavily opposed by the CAI, but definitely not with the interest of the homeowners in mind. In a big appeal on the CLAC Home Page at :
http://www.clac.org , which features prominently the CAI logo and sports the interesting statement : "The VOICE of Homeowners Associations in California"
the author called it (quote) :

Assembly Bill 2289, authored by San Diego Assemblywoman Christine Kehoe, is well-intentioned legislation that purports to protect homeowners from foreclosure when they do not pay their association dues. The legislation (1) creates a 30-day waiting period, before condominium and homeowner associations may file a lien on the property of homeowners who do not pay their dues; and (2) requires that association board members meet with each delinquent homeowner to work out a personalized payment plan -- if the homeowner requests such a meeting. 

Mandating a 30-day delay before a lien may be filed can detrimentally place your homeowners association low on the lien priority and recovery list. This is because liens are based on a “first-to-file, first-to-recover” basis. Other creditors who file ahead of your association will be paid first. 

Whether sufficient funds would remain to pay the outstanding association dues is unlikely. Indeed a homeowner could sell the property before the association has the ability to record the lien and the association would need to chalk the amount up as a bad debt! In either case, associations would have to make up this loss by passing it on to the paying homeowners in the form of increased dues. Associations that decide not to increase dues will have a difficult time appropriately maintaining the property of the association. This would result in falling property values.

Please call your State Senator NOW to ask him/her to vote NO on AB 2289. Since AB 2289 is expected to be voted upon as soon as Monday (August 12th), it is imperative that you do not delay in leaving your message today or even over the weekend. Get your neighbors to do likewise. Share this Alert with them by fax or email right away. 

First, and importantly, inform the Senator that you are a constituent. (See roster) Then, request that he/she “VOTE NO on AB 2289” because:

• ”It jeopardizes my association’s ability to collect unpaid dues.” 
• ”It shifts the financial burden to others on fixed income when non- paying owners refuse to pay dues.” 
•  “Why should I have to pay more dues than my neighbor??? Every homeowner in a condominium or homeowner association has an obligation to pay their dues on time, or to make other arrangements to pay their dues, just like they have an obligation to make their monthly mortgage payments.” 
• ”Since condominium and homeowner associations are not-for-profit in nature, they rely entirely upon dues to run the association and keep up the grounds and buildings. If the State Legislature makes it more difficult for associations to collect dues, upkeep on the property will suffer and the value of my property will go down!”

One small step in the right direction, but still many big steps ahead in order to take the power away from abusive boards, attorneys and management companies and give the people, who have invested their life-savings in their homes, back the power to make decisions regarding their money and investment.

If the Assembly agrees, the property groups would have to wait to file legal sanctions over late homeowner fees. 

Homeowners who are late paying their association fees might soon have one less legal entanglement to worry about.

The state Senate on Tuesday passed a bill to require homeowner associations to give 30 days' notice to owners before recording a lien against a property for late payments.

It also would give owners the right to meet with association boards to discuss the issue. Currently, community associations can send out a notice of their intent to file a lien and the day they file it.

A lien is a legal claim that makes it difficult to sell property without settling the debt.

"The bill creates an opportunity (for the homeowner) to determine whether debt is owed and what's a reasonable (way) to repay debt," said Norma Garcia, senior attorney with Consumers Union, publisher of Consumer Reports magazine. 

One of four Californians is part of a homeowner association. In Orange County, about one of two residents lives in a community governed by one of the county's 3,500 associations, according to the California Association of Community Managers in Irvine. 

Many groups already provide 30 days' notice either because they think that's fair or because they believe it's required under federal and state fair-debt collection laws, which give debtors 30 days to dispute a claim, according to the office of Assemblywoman Christine Kehoe, D-San Diego, author of the bill.

The bill was passed by the Assembly in May and will now go back for approval of minor changes made in the Senate.

After that, it would go to Gov. Gray Davis, who has not taken a position on the bill. If he signs it, the bill would take effect Jan. 1.

Management for Leisure World in Laguna Woods opposes the bill. 

"It's whittling away our ability to collect (dues)," said Joe Winkler, legislative analyst for Leisure World.