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Hugh R's Avatar
 
Join Date: May 2003
Location: southern California
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Sueing a neighbor for HOA Back dues in Small Claims Court

I'm the Prez of a 25 home HOA, one neighbor hasn't paid dues in almost 3 years. So I decided to sue them in Small Claims Ct. for just under the $5,000 that an association can sue for. He owes more, but I am only taking them to court for the $5,000 that he is behind through last September. My understanding is I can sue him again in the future for the dues, late fees and interest from October forward.

I understand its tough times, but I've got to protect the HOA. I'm guessing that a statement of back dues from the Treasurer (my brother) is sufficient? Never sued anyone before. I know one or both of them works, but I don't know where. With a judgment, I assume they have to disclose where they work/bank info so I can attach paychecks or bank accounts. If he's smart, he'll empty out his bank account before the court date which is March 4.
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Old 01-08-2013, 12:57 PM
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Non Compos Mentis
 
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Bummer to have to do this. Serious bummer.

But if word gets around that there are no consequenses of not paying dues, it will soon be time to disband the HOA.
Old 01-08-2013, 01:04 PM
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Non Compos Mentis
 
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Has the neighbor made any attempt to pay? Had any communication as to why he/she cannot pay?

Or are they simply refusing to pay because they don't feel like it?

A payment plan that takes their financial situation into account may be a good idea, if they have any desire to pay what they owe.
If they are truely on the ropes financially, I'd hate to add to their dufficulties.

I wish you (and them!) well.
Old 01-08-2013, 01:08 PM
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The statement of back dues is certainly needed but you should also get copies of every correspondence and notification sent to the homeowner as well as a copy of the provisions in the CC&R dealing with notifications on lack of payment. Review the procedures taken by the HOA regarding notices and timelines (ie. registered mail within X days of non-payment) and document they have been followed. Bring everything remotely connected to the default and the HOA's notification process--you may not need it all but be prepared for anything to come out of the mouth of the defendant. You need to be able to counter his story with facts.

BTW, before appearing before the judge, each side is told to review each others evidence and documents. The more you have, the less likely he will try to defend and may choose to arbitrate--something Cal. small claims offers because it takes less court time.

Anything can happen in small claims. Be prepared, no, be overly prepared!
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Old 01-08-2013, 01:18 PM
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Asked them many times about paying something. Even $25/month for their trash. Nothing.... They filed for BK a couple of times and were denied by the courts. I don' think they live a lavish lifestyle at all. Two small Nissans that I think they lease. BofA tried to foreclose a couple of times, but it never happened. I think their mortgage is like $150K on the 1st, but have another $400K on the 2nd, and 3rd. I think they kept borrowing on equity when stupid money was being lent out. I could wait for them to move or die, but that could take years.
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Old 01-08-2013, 01:19 PM
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File a Lien against the house. Force sale of house to collect Lien. Of course you will be in a third position, but if the bank wants to sell the house post-foreclosure, they will need to clear the lien with your HOA.
Old 01-08-2013, 01:26 PM
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Quote:
Originally Posted by SeanPizzle View Post
File a Lien against the house. Force sale of house to collect Lien. Of course you will be in a third position, but if the bank wants to sell the house post-foreclosure, they will need to clear the lien with your HOA.
Not necessarily. Depending on the state and the HOA documents, the lien might be infront of the second and third mortgages. As a mininum, the banks then own the property and the HOA payments start. If they don't, then the HOA can foreclose on the bank.
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Old 01-08-2013, 02:35 PM
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We went through the same type of problem. It wasn't a HOA thing but just the same, we won the judgement in small claims and I asked the Judge how do we collect?
He said you have to lein them. Whatever real property they have.
It was a waste of our time in the end because we never recovered anything.
They filed a financial statement that pretty much said they owned nothing.
You know.... car doesn't run and worth $100 dollars, etc.
The judgement at the time was for the max. I think it was $3000.00.

All I learned from the experience was to be more careful in the future.
I wasted time off from work. Had to stay in a motel, etc just to show up with the suit. Didn't work for me. Good luck.
Old 01-08-2013, 02:38 PM
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Man what a bummer to have to go through all of this. I do agree tho that if they skate on the HOA fees then others may follow.
Tough for you Hugh! I'm sure that you just planned to help keep the services on track in your neighborhood when signing on for the job. But now have to deal with this hassle.
I've all ready been asked to join the board at the condo complex where we bought our unit in Princeville. Primarily because we live on island and are available. Most owners live else where. I'm holding off for the time being, for a chance to go to a couple of meetings and feel things out a bit.
Thanks for posting, I have and continue to learn so much from yours and others contributions here. Some of the insight gained here shaped our choice of complex to buy into, bringing our focus much more into the dynamics of the association involved.

I do hope this situation comes to a reasonable outcome for you.

Cheers Richard
Old 01-08-2013, 03:05 PM
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I was the Pres of a 250 unit condo where we had an owner on the 28th floor that refused to pay his fees. I deactivated his elevator and garage FOB.

He paid!
Old 01-08-2013, 03:12 PM
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Our previous neighborhood HOA pursued it as well. Had several homes go into foreclosure - and you can then only collect the pro-rated portion of the current annual HOA dues for the duration that the bank has taken ownership of the property.
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Old 01-08-2013, 03:31 PM
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If it hasn't been said before, in California, the Davis Sterling act covers HOA's. They have a web site. You can go for a non judicial foreclosure. Only requirement is non payment for a minimum of 12 months. My HOA did this on a property and took possession even though the bank had first position.. Rented the property month to month to make up losses. Bank finally took over and sold property.
Old 01-08-2013, 04:44 PM
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Quote:
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I could wait for them to move or die, but that could take years.
Anything can be arranged....for a price.

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Old 01-08-2013, 04:50 PM
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What a sticky mess. I will never buy into a area that has HOA fees. No winners here....
Old 01-08-2013, 04:59 PM
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Quote:
Originally Posted by SeanPizzle View Post
File a Lien against the house. Force sale of house to collect Lien. Of course you will be in a third position, but if the bank wants to sell the house post-foreclosure, they will need to clear the lien with your HOA.
This, you sue them and what does that get you?

A judgement. If they are not paying now, what makes you think they will pay the judgement?

Put a lien in place and the HOA will eventually get paid. Might be cheaper than going through SCC too. That is what we did when I was the prez of our HOA back in TX
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Old 01-08-2013, 05:19 PM
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Quote:
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Put a lien in place and the HOA will eventually get paid.
Not if the underwater mortgage homeowner walks away or is foreclosed upon...
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Old 01-08-2013, 05:35 PM
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If that happens you are not getting paid anyway
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Old 01-08-2013, 06:00 PM
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Quote:
Originally Posted by roboat99 View Post
If it hasn't been said before, in California, the Davis Sterling act covers HOA's. They have a web site. You can go for a non judicial foreclosure. Only requirement is non payment for a minimum of 12 months. My HOA did this on a property and took possession even though the bank had first position.. Rented the property month to month to make up losses. Bank finally took over and sold property.
This looks like the best advice.

Davis-Stirling.com, the #1 resource for California's condominium associations, stock cooperatives, gated communities and community associations.
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Old 01-08-2013, 07:44 PM
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What the hell does the HOA provide? For $5k over 3 years it better be monthly BJs.
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Old 01-08-2013, 08:22 PM
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Truth is you're not going to see a dime...but I think you know that and are just doing your required duty. Sucks to be in the middle of that I'm sure.
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Old 01-08-2013, 08:56 PM
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