Archives for June 2013

Homeowners Associations and Foreclosure Assessment Liens: What You Should Know

Foreclosure AssessmentHomeowners or condominium owners who have never bought a property to be assessed annually by a Homeowners Association (HOA) are often surprised at the fact that in many states, the Homeowners Association has the power to foreclose on your property if your assessment dues are not paid. This foreclosure can be a non-judicial one if you, the property owner, are in a common interest development such as a condominium, timeshare, or planned unit development.

However, while an HOA does have the power to place a foreclosure assessment lien on your property, there are certain laws in place in the State of California that restricts their ability to do so. One such restriction is the “right of redemption,” which is a time period following the initiation of the foreclosure assessment lien in which you, the owner, have a right to redeem the property by paying the full amount of what is owed in assessment fees.

To be clear, this right of redemption does not normally exist in non-judicial foreclosures. However, in California, if you are in a common interest development, a 90-day right of redemption does exist if your property has had a foreclosure assessment lien placed against it. This means that if you can make the full payment required on the assessment fees before the 90-day period has ended, you will keep your property and avoid foreclosure on it.

Other restrictions placed on this type of procedure are written in Civil Code section 1367.4, which prohibits an HOA from placing a property in foreclosure if the assessment fees are less than $1,800. If the fees total more than that amount, they must still follow several guidelines, which include the following:

  • The HOA must offer to enter into mediation with the owner as a form of alternative dispute resolution (ADR) before placing the property under a foreclosure assessment lien.
  • Only the board of directors of the HOA can make the decision to place the property in a foreclosure assessment lien if the assessment fees accrued meet the minimum requirement.
  • The board of directors must be personally responsible for informing the owner or occupant that the property will be foreclosed upon, and must serve him or her the proper paperwork for it to be initiated.
  • The owner-occupant must be given a 90-day redemption period once the property is slated for a non-judicial foreclosure if the property is part of a planned unit development.

Top Ten Consumer Rights in California Home Purchase

Consumer Rights in California

If you are purchasing (or planning to purchase) a home in California, it is important to know your rights as a consumer before you start your search. Many unscrupulous sellers and brokers rely on the fact that home buyers have not done their research and are not aware of their rights in the exchange. Such assumptions can lead them to attempt to take advantage of you as you are searching for a home.

However, if you show them from the onset that you are educated about your rights, you’re much more likely to settle on a fair deal.

  • As a consumer, you have the right to select your own lender, real estate broker/agent and inspector.
  • As a consumer, you have the right to use California’s approved Residential Purchase Agreement (RPA-CA) when participating in the process of making offers or accepting an offer.
  • As a consumer, you should always be given up-front information concerning the real estate agent’s relationship to the seller. This information is usually given through an Agency Disclosure Form and should be available to you at all times.
  • As a consumer, you have the right to hire an attorney or mediator to review all of the documents involved in the sale or potential sale of the property. As California is considered an escrow state, you will also deal with an escrow company, which acts as a neutral third party in ensuring that the contract is upheld properly.
  • As a consumer, once you have signed a RPA-CA contract, you have 17 days to change your mind after your offer has been accepted. While there are certain conditions to this–such as dissatisfaction with the condition of the home or the neighborhood in which it is located–you can back out of the offer and contract without being penalized.
  • During the 17-day timeframe provided to you in the RPA-CA contract, as a consumer, you have the right to negotiate with the seller regarding repairs that you believe should be made or credit that should be applied to the asking price to cover the cost of those repairs (if they are not made by the seller). Even if you purchase a property that is sold to you “as is,” you have this right.
  • As a consumer, you should be given a copy of every piece of documentation signed pertaining to the property’s purchase.
  • As a consumer, you always have the right to walk away from the purchase while it is in escrow, although you could be penalized financially for this decision. It is important to speak with an attorney or mediator if you choose this route to make sure that it is in your best interest to do so.
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