Legal Question in Real Estate Law in California

Background:

I live in a small (10 unit) condominium building in the mid-peninsula of the San Francisco Bay Area in California. The issue is that we have one unit that has become delinquent on their HOA payments for over a year now. The amount owed not only includes the monthly home owners association (HOA) dues but also several special assessments we as an association assessed ourselves after a full home owner vote. The amount owed excluding interest accrued is well over $40,000. Given that we're always tight on our budgets, any delinquencies hurts us and we have to increase our monthly dues or collect more special assessments to meet our budget. Essentially 9 units are paying for the upkeep and maintenance of a 10 unit condo building. At the urging of some owners and our property manager we have put a lien on the delinquent unit.

Additional info: We have learned that the delinquent unit also defaulted on its mortgage payments and the mortgage lender moved to foreclose the condo about a year ago. That proceeding was to be finalized late last summer but given some irregularities that the feds identified in some banks foreclosure procedures all foreclosures came to a screeching halt and we lost another 6 months. Now that unit's owner is trying to modify his mortgage loan terms and that's where it stands. There is no foreclosure process as far as I know since the bank is working on the loan modification.

Questions:

1. What can we do besides putting a lien on his condominium unit to collect the mounting debt the delinquent unit is piling up?

2. Are we at the mercy of the bank and it's lengthy loan mod, and if that is not approved, a lengthy foreclosure procedure?

3. What happens if it is foreclosed, do stand a chance of collecting what is owed to us? i.e, does the lien guarantee that the unit can be sold only if the lien is cleared (ie, we're paid first)? Our building is in a very desirable zipcode and should the unit sell at prevailing market prices, it should more than cover the mortgage loan, so do we have a good chance of collecting what is owed to us? If not, ie, if it fetches a price less than the value of the mortgage loan, can we prevent it's sale since we have a lien on the unit? (the reason for preventing would be, the mortgage lender would get whatever it fetches as senior debt holder, and we would be left with nothing).

4. What if there is no foreclosure but a loan modification is approved? What can do then? (same as Question 1).

5. Can as home owners initiate our own foreclosure procedure against the delinquent unit?

6. Can we seek a court order to garnish the wages of the delinquent unit's owner?

The other 9 homeowners are sick and tired of a free loader who is oblivious to our financial situation.


Asked on 2/04/11, 1:18 am

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

In brief, you should at least consider legal action to perfect a lien and enforce it, and at the same time adjust your thinking to accept the reality that the amount owed may never be collectible from the debtor

Read more
Answered on 2/08/11, 9:06 pm


Related Questions & Answers

More Real Estate and Real Property questions and answers in California