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November 24, 2006
My HOA Has Liened My Property For Not Fixing Damage Caused by the Association - Can They Do That?
Whenever I receive emails from owners whose homes have been damaged in the course of destructive testing in a lawsuit, I cringe. Of course, readers who were taken care of do not have reason to write.
This is just such a letter (modified to keep from pointing to one association, as this happens more than I would like to see).
"I am a home owner looking for help with an unfair lein from my HOA. A few years ago, the HOA won a lawsuit against the original builder for defects. The net proceeds were about $________. The board began repairs shortly after the win. Unfortunately, the board was inept, and the HOA lawyers and builders ran the association out of money within a year. There is another lawsuit pending against them.
The problem is that the roof was a major problem. The builder removed the roof during the lawsuit, in order to assess problems, just as the winter rains began. He covered it with tarps. Then, after going through the entire rainy season without a roof, my ceiling collapsed and parts were open the sky. The unit was rendered unihabitable.
The HOA kept promising to make repairs although they have not done so yet. The roof was taken off two years ago! I requested arbitration under the CC&Rs but they refuse to answer me.
After all this time, they placed a $___[huge, 5 figures] ____ special assessment against my unit. Of course, I can not refinance, rent or sell the unit in its present condition and therefore I cannot pay the assessment. I did try to sell the unit, but the realtor said I needed to make about $5000 in repairs just to sell it. I did not have the money and the HOA had not made the repairs, so I stopped making the monthly dues payment to accrue the repair money. I informed them in writing of what I was doing and why and they did not answer in writing. One of the board members with a conscience reported to me how the association lawyer advised the board that they were putting me in a psoition to make a lost use claim against them.
This week they filed a lein against my unit. They say they are beginning foreclosure proceedings against me.
How much should I expect to pay a property lawyer to represent me in arbitration? My guess is that it is more than the cost of the repairs, but counting nearly three years of lost use, damages and repairs needed, I think they owe me much more than the amount of the lien. Thus, I think I should fight them on this. What do you think?"
First of all, I believe that if all of the above facts are true, this person should be able to find an attorney that would pursue the case. Most cases that I am aware of that involved liens that are lopsided or unfair, or even that are fair in the first place but which involve sympathetic owners, tend to resolve in settlement discussions with cash settlements without going to trial. The public abhors liens, so if one of these went to trial, and the facts were as stated, without valid defenses, the HOA could find itself being "punished" royally.
As for how much one should pay a lawyer to take on a case like this, one could look until they find an attorney that might take on something like this on a contingency or partial contingency basis. Where would one look? I have to suggest contacting the local Community Associations Institute Chapter or any local HOA group that puts out a directory and calling all the lawyers to see who might be interested in taking the case. Even if an attorney would not take it, one with integrity would be willing to recommend an honest lawyer who has a good reputation that does speak to and represent owners. I know because other attorneys representing HOAs in this state in a situation where an owner has a complaint against the HOA have sent the owners with complaints to talk with me. If I cannot help them, either because of time constraints or the fact that I do not litigate, I try and help them find a knowledgeable attorney who can help them. Of course, it a fact that not every HOA attorney will represent individual owners, but those that do generally "help" things get settled sooner and reasonably. An attorney who knows nothing about HOA law can mislead an Owner and/or delay proceedings or make accusations or threats that are groundless and sometimes because of the lack of knowledge actually protract the litigation process causing everyone to pay more to get to a resolution.
This is a case that demands attention, if indeed the facts are as stated. And sometimes it simply comes down to the "squeaky wheel" gets the grease. But I would suggest this owner talk to attorneys in his or her area, striving to find one that understands HOA laws in California, and does not like mistreatment, from whichever side it comes.
When the Association designates certain units for destructive testing in a construction defects lawsuit, at the VERY LEAST it would be my feeling that those units should get first attention when a "fix" is identified and at the VERY LEAST what was destroyed in testing should be moved to the top of the list for being repaired at the first reasonable opportunity. If any of these cases goes to trial, I do not believe the HOA will receive much sympathy if a home is destroyed to pursue a claim and then not repaired. Years ago I took one of these on and the Association told the owner it ran out of money and could not fix the hole in the dining room floor. They told the owner to put a board and rug over it. NOT ACCEPTABLE!
On the other hand, sometimes (all too often really) the Board determines that there is not enough money left after a lawsuit to repair all identified construction defects, and I could envision a situation where the owner whose unit was used for destructive testing might not get prioroty in making repairs that others are not going to get. Still, the damage that was caused needs to be repaired!! There is no question in my mind about this, even if it takes a special assessment to do it. Leaving an owner without a home, when others still have use of their homes, albiet with some identified defects, should not be considered a viable option.
if this owner gave all relevant facts, I would suggest he or she keep looking, actively and immediately, to find a lawyer that is local enough to at least threaten or file a lawsuit, or engage in meaningful arbitration or mediation, to resolve this.
But there is one thing that everyone should know. In California, there is case law that says an owner cannot withhold assessments and put them into an escrow account or whatever they might claim to do to separate out the money and then use that to pressure the Association to take action. The requirement of paying assessments goes on even if you do not like the flowers, the maintenence performed (or not performed) or the paint color. So discontinuing paying an assessment can lead to a lien and extra charges associated with it, and to foreclosure. In this case, the owner needs to find legal counsel asap because of the pending lien issues.
Posted by Beth Grimm at November 24, 2006 9:36 AM