The Wall Street Journal recently reported that secured bank lenders to General Motors would get a full recovery on $6 billion in loans made to the auto maker, under the bankruptcy plan being finalized by the U.S. Treasury.
If you are asking what this has to do with California community associations, then you need to read on. California community associations have the ability to secure a delinquent homeowners assessment obligation by recording an assessment lien.
With an increasing number of delinquent homeowners resorting to bankruptcy protection, it is more important than ever that California community associations move quickly with the assessment collection process and record a lien. Keep in mind that the lien cannot be recorded until 30 days after the pre-lien letter with all the required language and attachments (association collection policy, statement of account, etc.) has been sent out to the owner(s) in compliance with the California Civil Code. Click here for more information on what is required for the pre-lien letter.
Unfortunately, many associations are taking too long to take action to collect the assessments that are unpaid and many of them find out too late (after the owner has filed bankruptcy) that as an unsecured creditor, they are likely not going to collect any of the delinquent assessments that were owed.
California law provides associations with the ability to record an assessment lien, and we encourage all association managers and board members to take advantage of the protections built into the law. For more information on recording an assessment lien, please contact Association Lien Services at 310-207-2027.