An association is required to accept a partial payment made by a delinquent owner, notwithstanding whether the payment is sufficient to cover the total amount of delinquent assessments, late fees, interest, and collection costs owed by the owner to the association at the time the payment is made. (Huntington Continental Townhouse Assn. v. Miner (2014) 230 Cal.App.4th 590, 601-602.) Upon receipt of a partial payment, the association is further required to allocate the payment toward the owner’s debt in accordance with the priority set forth in Civil Code Section 5655 (i.e., first to the amount of assessments owed, then to other costs imposed on the owner in connection with the owner’s delinquency). (See “Priority of Payments.”) Notably, the Court in Huntington did not address whether such allocation is required in situations where the owner has agreed to a different allocation method pursuant to the terms of a payment plan executed between the owner and the association.
An association’s obligation to accept a partial payment exists even after the association has recorded an assessment lien against the owner’s property, or has commenced other measures to collect the owner’s assessment debt. (Huntington, at 602 (“…an owner can make a partial payment after an association has commenced measures, such as recording a lien, to collect the delinquency.”).)
Impact on Foreclosure of Assessment Lien
When an owner has made a partial payment, it may impact the association’s ability to commence foreclosure of the assessment lien due to the limitations set forth in Civil Code Section 5720 (i.e., if the partial payment reduces the amount of delinquent assessments below $1,800). (See “Limitations on Foreclosure of Assessment Lien.”)
Related Case Law
- Huntington Continental Townhouse Association, Inc. v. Miner
(2014) 230 Cal.App.4th 590
[Assessments & Collection; Partial Payments] An association is required to accept partial payments made by a delinquent homeowner and allocate them in accordance with Civil Code Section 5655, even after the association has recorded an assessment lien.