Facts: An owner of a property located in a Common Interest Development (CID) became delinquent in payment of regular assessments levied by the homeowners’ association (HOA). The HOA recorded an assessment lien on the owner’s property for the amount of the delinquent payments, late charges and related costs and fees. The owner established a payment plan with the HOA to cure the delinquency, on which the owner later defaulted. The owner made a partial payment which brought the amount of delinquent assessments, exclusive of fees and charges, to less than $1,800—the threshold for collecting delinquent assessments through judicial or nonjudicial foreclosure. The HOA rejected the partial payment and moved to foreclose on the owner’s property.
Claim: The owner sought to stop the foreclosure proceedings and reinstate the payment plan, arguing the HOA is required to accept and apply partial payments to delinquent assessments first and is prohibited from seeking to foreclose on an assessment lien when the delinquent assessment amount is less than $1,800, exclusive of fees and charges.
Counterclaim: The HOA sought to complete the foreclosure process, claiming it was not compelled to accept partial payments since the payment plan had become delinquent and thus the entire amount of the assessment in default was greater than the $1,800 threshold for assessment lien foreclosure.
Holding: A California Court of Appeals held that the HOA was required to accept the partial payment and apply it to the delinquent assessment amount before any charges and fees and, since the partial payment reduced the delinquent assessments to less than $1,800, the HOA was prohibited from foreclosing on the assessment lien. [Huntington Continental Townhouse Association, Inc. v. Miner (2014) 230 CA4th 590]