Facts.

After paying your association dues for many years, you inadvertently neglect to pay your association dues for one month. You realize you forgot to pay the association dues the following month. So you pay two months of association dues in the second month. The association returns your check stating that you have to pay a late fee. You request the association to waive the late fee. You then receive a letter from the association's attorney stating that you not only have to pay the late fee, but you also have to pay the association's cost of the attorney's letter. Are there any defenses available?

Legal Analysis.

This subject is governed by Civil Code sections 1365 to 1367.5.

The association is required to annually distribute to its members its board approved written policies and practices for enforcing lien rights and other legal remedies for any default in the payment of assessments. If the association has not approved and distributed its written policies, the association may be barred from collection activity.

If the association exceeds the scope of its written policy on collection enforcement, the collection activity may be barred. For example, if the written policy provides for interest on past due assessments but does not provide for late fees, the association cannot recover late fees from the owner. Thus, the association is restricted to its approved and distributed policy.

The association cannot proceed with foreclosure (judicial or non-judicial) until the assessments exceed $1,800 or the assessments are more than 12 months delinquent. Further, the $1,800 must be comprised of just association dues. It cannot include fines, penalties or attorney's fees.

Thirty days prior to recording a lien for non-payment of assessments, the association must provide the owner with its written collection policy, its method of calculating the amount owed and an itemized statement of charges. The owner then has the right to review the association's records in order to verify the debt. If the association records a lien in error, the association must release the lien within 21 days and provide the owner with written confirmation that it has been released.

The owner has the right to dispute any assessment imposed by the association by submitting a written request for dispute resolution. The association may not initiate foreclosure without participating in the requested alternative dispute resolution. Alternative dispute resolution may consist of either mediation or arbitration.

The owner may request the association for a payment plan. The association must explain its standards for payment plans. The board must meet with the owner to discuss the payment plan.

There are limitations on how much the association dues may be increased. The association may not increase the regular annual assessment by more than 20% per year or impose a special assessment which exceeds 5% of the budgeted gross expense of the association without approval of a majority vote of the owners. If the board increases the association dues beyond these amounts without the approval of the vote of a majority of the owners, the increases are invalid.

Under very limited circumstances, emergency assessments may be permitted. These must be required by court order or under circumstances where there is a threat to personal safety or under circumstances where the expense could not have been reasonably foreseen by the board.

If the assessment is delinquent, the association may recover reasonable collection costs, including reasonable attorney's fees, late fees not exceeding 10% or $10.00 whichever is greater and interest thereon not to exceed 12%. It bears emphasis that the attorney's fees must be "reasonable."

An excessive assessment or fee is prohibited.

Conclusion.

This is a complicated and technical area of the law. If the legal requirements are not followed by the association, an owner may be able to avoid paying the assessments or fines. However, the owner must balance the cost of competent representation with the amount in dispute. In some cases, it may be more economical for the owner to pay the assessment or fine than to fight it.

More info on your stop foreclosure information search:

Get Free Foreclosure Advice and Free Refinance Quotes
Get your free on-line foreclosure refinance quote and free advice from foreclosure mitigation specialist in minutes. Compare real offers from top national subprime and hard money lenders... more...

Foreclosure Victims Helping Foreclosure Victims
A number of the homeowners that we talk to everyday are motivated by two main goals. The first, obviously, is to save their home from foreclosure, avoid potential scams, and get their financial lives back to normal. Teaching homeowners how to do each of these is the main purpose of our website, ... more...

Master The Mechanics Of Foreclosure - The Key To Being Effective In Pre-Foreclosure Investing
To confidently compete in the pre-foreclosure arena, every investor must master the mechanics of foreclosure. The events of foreclosure, the timeframes, the disposition of the proceeds of sale, and the effects of the sale ? these are all important landmarks in navigating through the foreclosure ... more...

Summary Of Vermont State Foreclosure Law
There are four different type of foreclosure are followed in Vermont. Strict foreclosure Power of sale foreclosure Judicial foreclosure Non-Judicial foreclosure What is the processing period for foreclosure in Vermont? Processing period is normally 210 days (Approximately 7 months) in Vermont. Is ... more...

Home Forclosure Help
9 tips for home foreclosure help Here outlined for you are nine things you can do if you want or need home foreclosure help. Home Foreclosure Help Tip #1. Make sure you have in place a Home Equity Line of Credit. For this home foreclosure help tip remember that if something comes up forcing you to ... more...