What You Don’t Know About Your HOA/POA Could Cost You

Pine Mountain Club is a property owners association and also a 501(c)(7) social club subject to specific IRS regulations about membership income and activities.  A homeowners’ association or property owners’ association (abbrev. HOA or POA) is an organization created by a real estate developer for the purpose of developing, managing and selling a development of homes.  California HOA/POA’s are subject to the Davis-Stirling Common Interest Development Act, which is the common name of the Civil Code beginning with section 1350.

But here’s what you really need to know, and so many of my friends and neighbors in PMCPOA don’t know this:

If you fail to pay your association assessment, you can lose your property through foreclosure!
There is no provision to withhold your assessment for personal reasons, hardship, or disagreement with the financial management of the HOA.  Additionally, the association is not required to grant you any relief through a hardship plan.

In 2008, Pine Mountain Club board members did develop and approve a hardship payment plan but it is not publicized or mentioned much.  I’m not even sure that the program is still available.  If you have not made your assessment payment on time, you need to contact Best Alliance and inquire about this program before you lose your home.

What else you might not know: PMCPOA applies your payment to the oldest assessment due and will not accept partial payments in the office.  You cannot make a full payment on the most recent assessment if you still have an old assessment and related fees outstanding.

What if you have a legitimate dispute regarding your assessment? An example of a legitimate dispute would be your assertion that you made your assessment payment on time, but were sent to collections anyway.

According to the Davis-Stirling Act, “an owner may dispute an assessment debt by submitting a written request for dispute resolution to the association as set forth in Article 5 (commencing with Section 1363.810) of Chapter 4 of Title 6 of Division 2 of the Civil Code.  In addition, an association may not initiate a foreclosure without participating in alternative dispute resolution with a neutral third party as set forth in Article 2 (commencing with Section 1369.510) of Chapter 7 of Title 6 of Division 2 of the Civil Code, if so requested by the owner.  Binding arbitration shall not be available if the association intends to initiate a judicial foreclosure.”

Note:  This is not intended to be legal advice.  If you truly believe you have a dispute, seek an attorney experienced in association matters.

The association must also follow California foreclosure law if initiating foreclosure.  More on that to come.