The United States Bankruptcy Court in California recently ruled in a case that may impact the terms under which Homeowners Associations ("HOAs") contract with collections companies to pursue delinquent assessments.

In the bankruptcy case of "In re Antonio Cisneros," the debtor, Cisneros, owned two properties within the HOA and had fallen behind on his assessment payments. Cisneros ultimately filed Chapter 13 bankruptcy in order to save his properties and cure his assessment arrears. The HOA had contracted with a collections company to recover the delinquencies from Cisneros. That contract specifically stated that if the collections company was "unable to collect fees or costs from the delinquent Owner or other responsible party, [then the] Association shall not be responsible for such fees or costs." (Emphasis added.) Accordingly, under the terms of the contract, the HOA was under no true obligation to pay the fees or costs incurred by the collections company. That contractual provision was what the Bankruptcy Court relied upon in disallowing the collections company's claims to recover its roughly $14,000 in collections fees and costs from Cisneros...

Click here to continue reading our blogpost entitled:  

"Assessment Collections Fees in "No-Cost" Collections Contracts "

The California Court of Appeal's recent ruling in a case underscores how crucial it is for HOAs to strictly comply with the Civil Code's election procedures and requirements.

The court in That v. Alders Maintenance Association (2012) applied Civil Code � 1363.09 to hold that a HOA's attorneys' fees and costs are generally not recoverable by a HOA should it prevail against a member in an election dispute. However, the same is not true for a member should she instead prevail against her HOA...

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"Recovering Attorneys' Fees in HOA Election Disputes "

Homeowners Association ("HOA") Boards and industry professionals are keenly aware of the financial impact that the economic downturn has had on HOAs throughout California, especially with foreclosures. The difficulty in identifying/contacting the bank who foreclosed on a property, as well as delays in the recording of certain property transfer documents, has hampered the ability of HOAs to quickly reestablish the assessment revenue stream from the new owner of the foreclosed property (often, the bank).

Fortunately, AB 2273 was recently signed into law to add new Section 2924.1 to the Civil Code and amend current Section 2924(b) of the Civil Code. AB 2273 serves two important functions...

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"AB 2273: Resecuring HOA Assessment Streams from Foreclosed Properties "

The Community Associations Institute (CAI) has just reported that the Federal Housing Administration (FHA) has released revisions to its condominium approval guidelines. In response to recent market and industry pressure, the FHA has determined to modify the existing rules and standards regulating the eligibility of condominiums to acquire FHA financing. CAI's initial review of the revisions indicate that the substantive changes pertain to (1) Delinquencies, (2) Employee Dishonesty Insurance, (3) Project Certification, and (4) Commercial Space Limits...

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"FHA Releases Revisions to Condominium Approval Guidelines"

We are proud to announce that on October 1, 2012 the Tinnelly Law group welcomed Sommer Banich as its Director of Marketing & Operations. Ms. Banich will be responsible for crafting and implementing a cohesive marketing plan, as well as creating and implementing operations processes to improve the service the firm provides to its hundreds of HOA clients throughout the State of California.

"We are incredibly excited to have Ms. Banich join the TLG team. We know she will be an asset in helping to steer the firm's continued growth while ensuring that we retain the level of quality and responsive service for which we are known." - Steve Tinnelly, Managing Shareholder.

Prior to joining the Tinnelly Law Group, Ms. Banich was an integral part of the Business Development Department at Merit Property Management. Ms. Banich graduated from California State University at Fullerton with a Bachelor of Arts Degree in English.

Our blog is updated weekly with mini articles on an array of HOA legal topics and new case law.  We encourage Boards and Managers to send us questions online for our attorneys to answer on our blog.  

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