Legal Question in Real Estate Law in California

I have had a primary resident and a rental in California. Due to my loss of job after 20 years with one company, I have both homes on short sale. I stopped paying my rental's HOA back in Aug. They now want to take me to small claim court to collect unpaid fees plus interest and other fees they have added to it. Since I only receive unemployment benefits as my source of income, I don't have ANY extra to pay them. What are my chances of winning (not paying HOA). Or if I was ordered to pay, how can the court mandate since I don't have any income/money.

Thank you in advance for your help.


Asked on 5/16/11, 9:06 pm

3 Answers from Attorneys

Erik Nowacki Business Law Inc.

As an owner of a unit in the complex, you automatically become a member of the HOA. All members of the HOA are contractually obligated to contribute to the HOA for payment of the expenses, such as repairs, maintenance and water bills.

If you don't pay the dues, the HOA can obtain a judgment against you for the unpaid dues. Not having the money to pay is not a valid excuse. Most likely scenario is that the HOA will win in court, i.e. obtain a judgment against you.

You can negotiate a settlement with the HOA, either before or after going to court. That's where your lack of funds will become relevant. Without a settlement, the HOA can use the judgment (if they prevail in court) to garnish wages and levy your bank account.

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Answered on 5/16/11, 9:15 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Your chances of winning a lawsuit you don't defend are virtually zero.

The HOA will get a judgment against you, which they may or may not actively try to collect. It will remain due and payable for a long time, with 10% interest accruing. Someday you will have some money, and they may swoop in and collect when you least expect it -- wage garnishment, foreclosure of a judgment lien on property you just inherited, etc. etc.

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Answered on 5/16/11, 9:30 pm

You sound like a prime candidate for bankruptcy, perhaps even a chapter 13 that might save one or both houses. I strongly recommend you consult with a good bankruptcy attorney.

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Answered on 5/16/11, 9:31 pm


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