Notwithstanding the fact that the payment of homeowner assessments is critical to the financial survival of a homeowners association, the collection of those assessments is an ongoing challenge for association management personnel. While at times it may appear that the nonpayment of HOA assessments by an owner is justified, in reality there is generally no justification for the owner of a separate interest not paying their share of the association’s assessments.

Reasons for owners not paying their share of HOA assessments vary from not using facilities, to having financial difficulties, to trying to get leverage due to having issues regarding various aspects of the association’s operations. These issues could be personal to the owner (i.e. the HOA has refused a request of the owner or has levied a fine for a violation of the governing documents that the owner disputes), or they could involve the entire community (i.e. annual budgets are not being provided, or board meetings or elections are not being held, or property is not being maintained). HOA Assessments are also frequently not paid when there has been a foreclosure sale of an owner’s separate interest and a new owner, such as the foreclosing financial institution does not step in and start paying the association as the new owner of the separate interest.

Sometimes owners who have vacated or abandoned their separate interest (usually because they owe more on it than it is worth and they have elected to allow their lender or the association to foreclosure on their separate interest) feel they are justified in not paying their assessments. There is no such justification because, even though they may have elected to no longer retain possession of the property, as long as they continue to be the record owner of the property they are legally responsible for payment of the assessments and they continue to be a member of the association and receive the benefits of the ongoing operations of the association.

State statutes provide that association assessments (regular and/or special) are a debt of the owner of a separate interest within the common interest development at the time that the assessment is levied. The responsibility for payment of the assessment includes late charges, collection costs, attorney fees, and interest in accordance with the association’s governing documents. Even though the obligation to pay assessments is personal to the owner of the separate interest, nonpayment can also result in the creation of a lien against the owner’s separate property interest when the association records an appropriate notice of the delinquent assessment(s) in the office of the county recorder where the owner’s property is located. The recording of the lien gives the association a security interest in the owner’s separate interest that is similar to the lien created by the recording of a deed of trust in favor of a lender. State laws vary as to the priority of the association’s assessment lien over other liens and encumbrances that are recorded against the same property.

The construction of the state statutes is reflective of the importance of the payment of assessments to the proper functioning of a homeowners association. Without having the ability to regularly collect assessments that are vital to the ongoing operations of a homeowners association, the association would collapse. Thus, to protect against such a result the states have laws that are designed to provide quick and efficient relief against owners who do not pay their share of assessments and which prohibit owners from unilateral decisions to offset amounts they believe are owed to them against the amounts they owe for their share of assessments. Such laws allow for the payment of contested assessments under protest and without prejudice to an owner’s right to seek recovery of the disputed amount in a separate action against the association. Similarly, it is inappropriate for owners to attempt to pay their disputed amounts into an escrow account.

Owners who purchase properties that are part of a common interest development that is governed by a homeowners association know when they buy into the community that they are going to be responsible for the payment of assessments. The success of their community is dependent upon owners doing their part and paying their fair share of assessments. Owners who have personal issues that could interfere with the payment of assessments should confront those issues and seek a resolution that does not involve the cessation of payments that the association is dependent upon.