ALS' four-step systematized non-judicial collection process begins with the California Civil Code required notification to the delinquent owner of their delinquency and continues with recordation of a Notice of Delinquent Assessment (also known as the "lien"), followed by recording of a Notice of Default and a foreclosure sale, if necessary.
At ALS, our goal is to collect the unpaid assessments, late fees, interest, collection fees and costs. We understand that the delinquent homeowner is a member of the association and a neighbor. ALS will work with those homeowners who are experiencing financial problems but want to bring their account current by negotiating and monitoring a payment plan (subject to board approval). ALS attorneys, account managers and support staff are trained to conduct all communications with courtesy and civility.
THE FIRST STEP - Attorney's Letter/Notice
of Intent To Lien. If the homeowner has not paid the delinquent assessments, ALS will take charge of the collection process. Upon receipt of the ALS Delinquent Assessment Collection Agreement, we will prepare the Civil Code Section 1367.1 required Notice of Intent to Lien attorney demand letter to the delinquent homeowner, advising that the matter has been turned over to ALS for processing and collection of delinquent assessments.
The letter will contain the Code-required accounting and other information, and it will advise the homeowner that they have 30 days to cure the delinquency or an assessment lien will be recorded on their property as a preliminary step in the foreclosure process. The homeowner will be charged collection fees for the ALS staff and attorney's time for setting up and preparing the file, review and confirmation of the debt, review of the governing documents, preparation of the initial attorney demand letter and phone conversations and other communications with the homeowner and management company and/or board of directors.
Note: Once the matter has been turned over to ALS, the association should not have any further contact with the homeowner regarding the delinquent assessments, and should not accept any money from the homeowner. All inquiries must be directed to ALS. Otherwise, the foreclosure process may be impaired. Please refer all questions and/or correspondence from the delinquent homeowner to your designated ALS account manager.
When the homeowner pays the amount of the delinquent assessments plus all fees and costs, within fourteen (14) days of verification, the money will be forwarded to the association.
THE SECOND STEP - Notice of Delinquent Assessment/Lien.
If assessments still remain unpaid 30 days after the Notice of Intent To Lien letter from the attorney, ALS will prepare and record the Notice of Delinquent Assessment (the lien). We will forward a copy to the homeowner with a cover letter stating that a lien has been recorded on their property for the total amount due and that they have 30 days to satisfy the lien. The lien will not be released until all delinquent assessments, fees and costs have been paid. The homeowner will be charged for the preparation and recordation of the lien and, ultimately, the Release of Lien.
THE THIRD STEP - Notice of Default.
If the delinquency is not cured within 30 days from the recording of the lien, ALS will proceed to record the Civil Code required Notice of Default. The Notice of Default is just that, a notice to the owners that they are in default on their obligation to pay assessments to their association. It is considered a redemption period giving the delinquent owner 90 days to pay their obligation before the Notice of (foreclosure) Sale is recorded and mailed.
THE FOURTH STEP - Notice of Sale/Foreclosure. Upon expiration of the 90 days, if the homeowner has not either entered into a payment plan with the association, or paid their delinquency in full, upon receipt of board authorization, a foreclosure sale is noticed and held (with 25 days notice), and if there is a third party buyer, all the delinquencies will be paid to the association from proceeds of the sale. If no third parties bid on the property at the sale, the property reverts to the association, and there is the possibility that the association will not obtain unpaid assessments. Our experience, however, is that most homeowners will not allow their home to go to a foreclosure sale for nonpayment of delinquent homeowner assessments. ALS will work with the board and management to assess collection options.
Under California law, the homeowner is given an additional 90 days after the actual sale to redeem their property following foreclosure. We find that many owners who have allowed their property to be sold at the foreclosure sale are taking advantage of this additional redemption period.
With a completed foreclosure (judicial or non-judicial), most title companies realize that foreclosure on an assessment lien is an appropriate way to collect delinquent assessments and will issue title insurance policies on the foreclosed property.
Questions? Contact Association Lien Services at 800-825-5510 or
Follow this link to review a sample non-judicial foreclosure timeline.
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