LAKESHORE COMMUNITY ASSOCIATION
ASSESSMENT COLLECTION POLICY

Because the Association is responsible for managing, maintaining and repairing the common areas, timely payment of assessments is extremely important to the operations of the Association.  Owners’ failure to pay assessments when due creates a cash‑flow problem for the Association and disrupts operations. As a result, the Board of Directors has adopted the following policies for the collection of delinquent assessments.

Assessment Due Date.  Regular assessments are payable monthly, in 12 equal installments.  Each installment is due on the 1^st day of each month and delinquent if not paid by the 30^th of the month.  Billing statements are sent as a courtesy.  Payment of assessments is required even if you do not receive a billing statement.  Special assessments shall be due and payable on the due date specified by the Board in the notice imposing the assessment.

Payments.  The Association’s mailing address for overnight payment of assessments is:  One Boardwalk, Suite 102, Thousand Oaks, California 91360.

Delinquent Assessments.  Delinquent assessments will be subject to late charges and interest as follows:

• Late Charge.  Delinquent assessments will be assessed a late charge of 10% or $17.20 on each delinquent assessment on the day it becomes delinquent. A late charge will not be imposed more than once per delinquent installment.
  
• Interest.  Any installment not paid by the thirtieth (30^th) day of the month will accrue interest at the rate of twelve percent (12%) per annum.

Liability for Collection Costs.  All late charges, interest, penalties, and fines, in addition to all attorneys’ fees and collection costs incurred by the Association, will be added to the owner’s account and will become the liability of the owner. Delinquent accounts will receive a thirty (30) day notice of Intent to Lien per occurrence at the charge of $50.00 each.

Enforcement Rights.  Assessments are the separate debt of owners.  In addition to any other rights provided for by law or described in the Association’s CC&Rs, Bylaws or other governing documents, the Board has the right to collect delinquent assessments as follows:

• File Suit.  The Association may commence and maintain a lawsuit directly on the debt without waiving its right to establish a lien and initiate foreclosure against the owner’s Unit for the delinquent assessment.  In any action to collect delinquent assessments, late charges or interest, the prevailing party will be entitled to costs and reasonable attorneys’ fees.  If such costs and fees are awarded to the Association, they will become a reimbursement special assessment against the owner.
• Lien and Foreclosure.  The Association may file a lien against the owner’s Unit for the amount of the delinquent assessment together with any late charges, interest, costs, attorneys’ fees and penalties.  The Association, through its Board, may bid on the Unit at the sale, and may hold, lease, mortgage, and convey the acquired Unit.
• Privileges and Voting Rights.  The Board may suspend the common area privileges and voting rights of any owner who is more than thirty (30) days delinquent in paying any assessment.  Common area privileges and voting rights will remain suspended until the delinquency, including any accumulated penalties, interest and costs of collection, has been paid in full.
• Additional Remedies.  The remedies described above are in addition to and not in substitution of any other rights and remedies the Association may have.

Lien and Nonjudicial Foreclosure.  Upon any installment becoming delinquent and prior to the recordation of a lien, the Association will use the following procedures:

• Notice of Delinquency.   A notice will be mailed to the owner via regular and certified mail to pay the account in full or a lien will be recorded against the owner’s property.  The notice shall begin with the following statement in 14-point boldface type, if printed, or in capital letters, if typed: “IMPORTANT NOTICE: IF YOUR SEPARATE INTEREST IS PLACED IN FORECLOSURE BECAUSE YOU ARE BEHIND IN YOUR ASSESSMENTS, IT MAY BE SOLD WITHOUT COURT ACTION.”  Also included in the notice will be:

– A copy of this collection policy;

– The method of calculation of the amount owed;

– A statement that the owner has the right to inspect the Association records, pursuant to Section 8333 of the Corporations Code;

– An itemized statement of the charges owed by the owner, including items on the statement which indicate the amount of any delinquent assessments, the fees and reasonable costs of collection, reasonable attorney’s fees, any late charges and their method of calculation, and interest, if any;

– A statement that the owner shall not be liable to pay the charges, interest, and costs of collection, if it is determined the assessment was paid on time to the association; and

– The owner’s right to request a meeting with the Board to discuss a payment plan.

• Recording of Lien.  If the owner fails to bring the account current, a lien will be recorded against the owner’s property.
• Notice of Lien.  Within ten (10) days following recordation of the lien, a copy of the lien will be mailed to all owners of record for that property as provided for in Section 2924b of the Civil Code.
• Foreclosure.  Thirty (30) days following recordation of the lien, foreclosure will begin.  In lieu of foreclosure, or concurrently, a lawsuit may be filed against the owner personally if the Board concludes such action is in the best interests of the Association.

Payment Plans.  Owners may request the Association to consider entering into a written payment plan to bring delinquent assessments current, prior to filing a notice of lien for delinquent assessments.  Payment plans will be granted in the Association’s sole discretion.  The Association will not enter into a payment plan (1) with any owner currently in bankruptcy, or (2) unless the owner agrees that the Association may record a lien against the property before the plan is instituted.

Returned Checks.  Returned checks are subject to a service fee.

No Offsets Allowed.  As required by law, owners may not offset payment of their assessments for any reason.

Crediting Payments.  Any payments received will be credited to the outstanding balance in the following order: special assessments, reimbursement special assessments, regular assessments, monetary penalties and fines for rules violations, late charges, attorneys’ fees and costs, and interest.

Attorneys’ Fees.  If a lawsuit or foreclosure action is initiated by the Association to recover assessments, the Association is entitled to recover not only the amount in default but also reasonable costs of collection, including title company charges and attorney fees as provided for by statute as well as the Association’s CC&Rs, Bylaws or other governing documents.

Fair Debt Collection Laws.  The collection practices of the Association’s agents may be governed by state and federal fair debt collection laws.  Penalties may be imposed for failure to comply with those laws.

Fines and Penalties.  A schedule of the Association’s schedule of fines and penalties imposed for violation of its CC&Rs or Rules is contained in Attachment “A” to this policy.

Notice of Assessments and Foreclosure.  The statutorily required Notice of Assessments and Foreclosure is contained in Attachment “B” to this policy.

A.    In order to enforce the CC&R’s, Bylaws and Rules and Regulations, the Board of Directors may levy, assess and collect reasonable fines, as established by the Board of Directors to cover such costs as time or labor, legal expense, postage, etc., for violation of published rules and regulations.  The fines shall be assessed against the homeowner involved for violations by the owner, members of his or her family, or by any invitee, licensee, or lessee of such owner.  The fine schedule shall be as follows:

1.         First Violation -Written Warning Notice
2.         Second Violation – Hearing Notice
3.         Third Violation – $25 to $100 Fine
4.         Fourth Violation – $200 Fine for same occurrence
5.         Subsequent Violations – $400 Fine for same occurrence

B.    In the case of violations:  Upon written notice to the Board of Directors of a violation of the Rules and Regulations, CC&R’s, or Bylaws, a formal letter will be written to the homeowner violator.  If the violation is repeated, the homeowner will be notified in writing that at the next Board meeting a fine will be levied at the next billing of homeowner’s fees.  Time will be set aside at this meeting as a formal hearing, at which time that homeowner will have the right to appeal the levy or fine.

C.    In the event a fine is not paid within thirty (30) days from date of levy, or in the event that the homeowner continues violations after warnings and fine, and following a reasonable time for an appeal and hearing by the homeowner before the Board of Directors, legal action may ensue.  In the event said homeowner fails to pay said fine, the Association will institute legal action for its for its collection as well as legal fees and court costs.

 

ATTACHMENT “B”
NOTICE
ASSESSMENTS AND FORECLOSURE

This notice outlines some of the rights and responsibilities of owners of property in common interest developments and the associations that manage them. Please refer to the sections of the Civil Code indicated for further information. A portion of the information in this notice applies only to liens recorded on or after January 1, 2003. You may wish to consult a lawyer if you dispute an assessment.

ASSESSMENTS AND NONJUDICIAL FORECLOSURE.  The failure to pay association assessments may result in the loss of an owner’s property without court action, often referred to as nonjudicial foreclosure. When using nonjudicial foreclosure, the association records a lien on the owner’s property. The owner’s property may be sold to satisfy the lien if the lien is not paid. Assessments become delinquent 15 days after they are due, unless the governing documents of the association provide for a longer time.  (Sections 1366 and 1367.1 of the Civil Code)

In a nonjudicial foreclosure, the association may recover assessments, reasonable costs of collection, reasonable attorney’s fees, late charges, and interest. The association may not use nonjudicial foreclosure to collect fines or penalties, except for costs to repair common areas damaged by a member or a member’s guests, if the governing documents provide for this. (Sections 1366 and 1367.1 of the Civil Code)

The association must comply with the requirements of section 1367.1 of the Civil Code when collecting delinquent assessments. If the association fails to follow these requirements, it may not record a lien on the owner’s property until it has satisfied those requirements. Any additional costs that result from satisfying the requirements are the responsibility of the association.  (Section 1367.1 of the Civil Code)

At least 30 days prior to recording a lien on an owner’s separate interest, the association must provide the owner of record with certain documents by certified mail. Among these documents, the association must send a description of its collection and lien enforcement procedures and the method of calculating the amount. It must also provide an itemized statement of the charges owed by the owner. An owner has a right to review the association’s records to verify the debt.  (Section 1367.1 of the Civil Code)

If a lien is recorded against an owner’s property in error, the person who recorded the lien is required to record a lien release within 21 days, and to provide an owner certain documents in this regard.  (Section 1367.1 of the Civil Code)

The collection practices of the association may be governed by state and federal laws regarding fair debt collection. Penalties can be imposed for debt collection practices that violate these laws.

PAYMENTS.  When an owner makes a payment, he or she may request a receipt, and the association is required to provide it. On the receipt, the association must indicate the date of payment and the person who received it. The association must inform owners of a mailing address for overnight payments.  (Sections 1367.1 and 1367.1 of the Civil Code)