Facts: An owner in a homeowners’ association (HOA) community became delinquent on HOA payments. After the HOA notified the homeowner of the delinquency and received no response, the HOA placed a lien on the owner’s property. Two weeks later, the HOA began foreclosure proceedings. After the foreclosure proceedings began, the owner requested a statement of sums due from the HOA. The owner proposed a payment plan to bring their payments current, which was accepted by the HOA. The owner tendered partial payments to the HOA in an amount inconsistent with the payment plan agreed to by the HOA. The HOA refused to accept the owner’s partial payments and resumed foreclosure proceedings.
Claim: The owner sought to avoid foreclosure, claiming the HOA must accept the partial payments since the payments were on-time in accordance with the proposed payment plan, although of a lesser amount.
Counter Claim: The HOA sought the previous balance paid in full, claiming the partial payments were not acceptable since the payments were less than the amount agreed upon by the HOA and the owner in the payment plan.
Holding: A California court of appeals held the HOA had to accept the partial payments of the owner since the owner was attempting to pay down the delinquency and the HOA used the lien and threat of foreclosure to bring about compliance from the owner. [Huntington Continental Town House Association, Inc. v. The JM Trust (January 21, 2014) _ CA4th_]
Editor’s note –This makes certain HOAs do not use foreclosure as their first remedy for payment of delinquent payments.