Past due HOA fees now in collections

[drod2070]

What is the name of your state (only U.S. law)? CA

I'm currently living in California in a condo with my mom as her caretaker in a condo that she owns and being her caretaker, I am unable to work so we are having to live off of her SS check as our only source of income. Our HOA dues are roughly $350/month and we knew that we were behind on payments and in July 2016, we received a letter from a collection agency indicating a balance of about $4,000 which was due prior to August 2016 or further action would be taken. That date came and went and over the next few months, my mom was in and out of the hospital so HOA issues were not at the top of my list. Currently, we are in the process of getting a reverse mortgage to get everything caught up and the other day we received a collection letter from a DIFFERENT collection agency indicating a new total of about $14,000 and they broke it down this way: Unpaid Assesments: $7,200.00, Interest: $0, Collection Costs: $6,600.12, Attorneys Fees and costs: $250.00. It seems to me that their 'collection costs' are rather excessive, we know that we owe for the unpaid assesments, which is a combination of monthly dues and late fees but basically doubling that for our new grand total? They increased the amount by $10,000 in about 8 month's time. I have two questions regarding this amount, first, is this an excessive amount? And since the reverse mortgage is going to be completed soon, how negotiable are these numbers?

 

[festival]

In general, assessments are not negotiable. Your association has a duty to collect the assessments. However, both late fees and collection fees are negotiable.

You say that they added $10,000, but over $3,000 of that is for assessments from August 2016 until now, so they really have added the $6,600 in collection fees and $250 in legal fees. The collection fees are negotiable. (Legal fees are also somewhat negotiable.)

Your association has to have a collection policy that they send out each year to owners. Did they send that policy? The late fees and collection fees may not withstand a court challenge if they did not send a collection policy to you, which would make a good negotiation point for you.

Get in touch with the board/treasurer and get a statement of your assessments and late fees from the association. You have a right to these records from the association. Don't rely on the collection agency for this information. You should be able to add it up for yourself from your own records. You may be able to negotiate the late fees with the association, although you will likely have to negotiate the collection fees with the collection agency.

Your mother's unit may have a lien, making the reverse mortgage difficult to obtain. That may be the source of the legal fees.

 

[drod2070]

I realized my math was incorrect as I was reading your response. Thanks for the advice. I tried to see if there was a lien but for whatever reason, the site for the County of San Diego's page to find that information isn't there anymore. I guess that we'll have to go into their offices to find out. My main concern is to make sure that if there is one, to get it off of there. If there has been a lien placed on our condo, once we get caught up, how would we know if the lien has been removed? We've never been in this situation before so I was curious to know if there was a basic rule as to how much of that $6,600 we should expect to actually pay? I would love to not pay a dime of that if we're able to pay this thing off all at once but I am expecting them to stick us with something so is there a target dollar amount that we should hold out for? I'm sure that each collection agency is different and each situation is unique but I want to pay the least amount possible.

 

[festival]

This has to be a three-way negotiation, between you, the association, and the collection agency, with all three entities fully engaged. You make a very good point about making sure the lien is removed quickly as part of the deal, and I would ask for that in writing from the association and the collection agency as part of the deal, so that the collection agency doesn't try to keep some of the money.

By law, the association has to decide to put a lien on your condo in an open meeting of the board, and send you a pre-lien letter.

The collection agency should not get $6,600.10 just for writing one letter to you, but on the other hand I have no way of knowing their expenses. I have experience with condo admin, but not with collection agencies. You should be able to get a better sense of it after contacting the association.

More info from this law firm here:
https://www.davis-stirling.com/Main-Index/Collection-Menu

 

[festival]

Actually, everything should be in writing, so the money is applied first to all assessments (as of a certain date) and all other fees are also specified, and each and every thing settled / forgiven / paid as appropriate. Just common sense. You may want to hire a lawyer to review it.

 

[drod2070]

Thanks again for the information. How quickly are liens removed? Is this something that we should expect to be done immediately? 30 days? More? I'm just wondering what my expectations should be.

 

[festival]

Thanks again for the information. How quickly are liens removed? Is this something that we should expect to be done immediately? 30 days? More? I'm just wondering what my expectations should be.

I went to a real estate lawyer a few years ago (not in California) who had an internet connection to the county recorder of deeds. He could theoretically open an old notice to remove a lien, change the names and dates, and send it to the recorder in maybe 10-15 minutes total. Realistically, it might take a few days or a week or more. You might have to wait for a decision at a board meeting. The original recording of the lien is never un-recorded or removed. As far as I know, it just takes a new notice to be recorded.

 

[drod2070]

Good enough, thank you again for the info today...