By John F. Baumgardner
Subsequently Accruing Assessments: SECURED OR UNSECURED?
delinquent assessments owed by its members who have declared bankruptcy. In Highland Greens Homeowners Ass’n v. de Guillen (Bankr.9th Cir. 2019) 604 B.R. 826, the 9th
A 24 Circuit held that liens
“purport[ing] to secure future assessments [over the $1,800.00 threshold] . . . [are] impermissible under the Davis-Stirling Act, which limits the lien to the amount specified in the notice.” (Id. at 837.) Te de Guillen Court reasoned that “the Davis-Stirling Act reflects the legislature’s intent to impose and rigorously enforce its procedural requirements to protect the interest of the homeowner.” (Id. at p. 839.) Based upon this legislative intent, the notice requirements for delinquent assessments over the $1,800.00 threshold “must be strictly construed.” (Id. at 837.)
bankruptcy opinion by the 9th Circuit Court of Appeal has thrown another obstacle into an association’s right to collect
While the opinion generally prohibits securing future delinquent assessments in a recorded lien, it acknowledges there is a statutory exception. If an association records a lien securing less than $1,800.00, the association “may include such [future delinquent] assessments without requiring a new notice” until all delinquent assessments reach $1,800.00. (de Guillen, supra, 604 B.R. at pp. 838- 839.) Additionally, the ruling does not exclude other secured recoverable costs from accruing after the lien is recorded (i.e. interest and reasonable collection costs). (Id.)
Circuit opinion in Goudelock v. Sixty-01 Association of Apartment
Under de Guillen, associations should consider recording successive liens to ensure that delinquent assessments are secured in bankruptcy matters. Tis is especially true following 2018 9th
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