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INFORMATION AND RESOURCES for Boards & Owners
Let’s say you have walked away from your homeowners association unit or home. Or you want to buy a home or condo unit in a homeowners association and want to find out what money is due and owing in assessments. Or you are on a board and there are several foreclosures in your association listed for short sales or foreclosure by lenders, and you want to make sure these peopld can find the assocition to get the assessment information and pay the debt.
If you are a seller, you may be able to run but you can’t hide – forever. I am quick to counsel owners that even if they are not paying their mortgage, they have to pay assessments or take the chance on getting sued at some point in a personal debt action for outstanding fees and costs. Owners cannot avoid the possibility of a judgment for past assessents- there is no debt foregiveness like what happens when the lender forecloses. It usually costs less to stay in a HOA home and pay assessments than run away and rent an apartment, especially given that the assessments are accruing against you at the same time, while you are waiting for the bank to foreclose. So stay awhile, cooperate with the association, and make the payments. Why not?
That said, a person who “walks” away better hope that the bank, title company or buyer’s agent can locate the association so the parties can figure the outstanding association debt into the sale, and get ahold of the seller if there is a possibility of a short sale (because seller has to sign off).
I got a call today from a realtor, a common occurrence today, asking for an association’s contact information. She got my name off of some documents I had drafted for the association years ago. Sometimes I don’t hear from an association but once every 4 or five years or more, when there has been turnover of 2 boards or more, and maybe one or more management companies, so I do not always have current contact information.
I get the calls from realtors, lenders, and title companies all the time. This particular time, I was on the computer while talking on the telephone, and I put the association name in for a google search and voila! Up came a website with the association contact and lots of other information.
These days, many associations have websites. I’m not going to suggest that boards have to answer inquiries such as the above from a prospective buyer’s agent. Directors and managers are commonly warned not to communicate with parties that are involved in the sales transactions other than the owner or the owner’s appointed agent. That is because establishing additional legal relationships can add additional liability exposure.
But these days, realtors, lenders and title company representatives are driven to locate the associations and establish communications because of outstanding assessment issues. They need to be able to locate a warm body that can provide meaningful information about accounts outstanding, fines, and nonconforming improvements. So if they can’t find anything by using Google, what can they do?
- Most efficient: Ask the seller. If the seller has “walked”… (which often seems to be the case) …
- Check the Secretary of State website (www.sos.ca.gov) and do a business entity search – if the association is incorporated there should be a record of the agent for service of process and that usually is the manager or a board member. Since the records are updated every two years with the filing of the corporate statement, this record should be current. No guarantees, but it should be a good lead.
- Check for a recorded statement under Civil Code Section 1366.2. The very purpose of that law is to give associations the opportunity to record a document providing contact information “to the world” so that they can be found and subsequently contacted by those who want to settle accounts.I don’t believe that many associations have recorded such a statement but I have been contacted to prepare the forms for a few. The problem with these recorded documents is that they are also outdated after board and/or manager turnover. The big discussion at the introduction and passage of this law at the outset was whether recording a document and then not keeping it current would trigger some responsibility (and thereby liability) if the contact person could not be located.
But maybe the above information may be helpful in locating homeowner associations.
And as a last resort you can always check out the name and address on documents even if they are years old. Sometimes you will get lucky.