The power an association has to foreclose on an assessment lien (whether through nonjudicial or judicial foreclosure) is subject to the limitations set forth in Civil Code Section 5720. Section 5720 generally prohibits an association from collecting an assessment debt through foreclosure of an assessment lien unless any of the following are true:
- At least $1,800 in Assessment Debt – The amount of delinquent assessments owed by the delinquent owner must total at least $1,800, not including any accelerated assessments, late charges, interest, collection fees or attorney’s fees. (Civ. Code §5720(b).)
- More than 12 Months Delinquent – The delinquent assessments secured by the assessment lien are more than twelve (12) months delinquent. (Civ. Code § 5720(c)(1).)
- Time-Share Interests – The delinquent assessments are owed by owners of separate interests in time-share estates, as defined under Business & Professions Code Section 11212(x). (Civ. Code § 5720(c)(2).)
- Assessments Owed by Developer – The delinquent assessments are owed by the developer of the association (the builder of the CID). (Civ. Code § 5720(c)(3).)
Partial Payments
Because an association is legally required to accept partial payments from a delinquent owner, and because Civil Code Section 5655 requires partial payments to be first applied to the amount of outstanding assessments before applying them to other costs (i.e., late charges, interest, collection costs, etc.), a delinquent owner may be able to elude foreclosure of an assessment lien by submitting partial payments sufficient to keep the assessment debt below the $1,800 threshold and less than 12 months delinquent. (Huntington Continental Townhouse Assn. v. Miner (2014) 230 Cal.App.4th 590, 605; See also “Partial Payments.”)
Small Claims Actions
If an association is unable to foreclose on an assessment lien due to the limitations set forth above, the association may attempt to collect the assessment debt through a civil action filed against the delinquent owner in small claims court. (Civ. Code § 5720(b)(1); See also “Small Claims Collection Actions.”)