When you don't pay regular or special assessments as they become due, your HOA has two options. It can place a lien against your home and conduct a foreclosure sale in order to satisfy the amounts you owe, or it may elect to file a lawsuit against you seeking a judgment including a monetary award. If you have been served with an HOA lawsuit, you may be perplexed and wondering how you could possibly be sued. As a homeowner in California, you are subject to the recorded CC&Rs that existed and encumbered your property at the time that you took title and ownership. If your house is situated within a community that is governed by a homeowner association, then there no doubt is a set of CC&Rs encumbering your property and the CC&Rs make you liable for HOA dues as long as you are on title. To be clear, as long as you are an owner of your property you are personally on the hook for all HOA fees assessed against the property. Even if you surrender your house and walk away from it (for example, expecting your lender to foreclose), you are still liable for HOA dues as long as you remain on title. So if your lender takes a year to foreclose, you'll be liable for one (1) year of HOA dues after you walked away from your property.
How to Get Out of An HOA Lawsuit in San Diego
If you don’t pay the HOA fees as they are assessed, then the homeowners' association can (and often will) hire a lawyer to sue you and obtain a judgment against you personally for the unpaid assessments. An HOA lawsuit can really come as a surprise, since most people never expect an association to file a lawsuit. It used to be that homeowners' associations would not pay an attorney to sue you and instead would record a lien and foreclose, which cost significantly less than filing a lawsuit. But when the San Diego home value began to decline during the most recent market downturn, HOAs realized that recording and pursuing a lien is often worthless. As a result, many associations started hiring attorneys to file lawsuits in order to sue homeowners personally to obtain a judgment that can be collected through the bank levy or wage garnishment process. To get out of an HOA lawsuit in San Diego, you'll want to talk to an attorney. If you have already filed bankruptcy, your best option will be to settle the case and get on a payment plan. If you have not filed bankruptcy, you should consult with a San Diego bankruptcy lawyer and get rid of the lawsuit with your bankruptcy filing.
Do I Have a Defense to the HOA Lawsuit?
In most cases, you won't have any legitimate defense to the HOA lawsuit. It is very easy for the association to win the lawsuit. The association simply has to prove that you are an owner and that you didn’t pay your HOA dues. The association proves you are an owner by showing that you are on title as reflected in the records of the San Diego County recorder, and they prove that you didn’t pay your assessments by producing an accounting. The result is: the association wins and you lose. What is more, under most CC&Rs, you are also liable for the association's attorneys fees and costs incurred in collecting the delinquent HOA assessments. That means that it is relatively certain that you will lose the HOA lawsuit and a judgment will be entered against you, not only for the HOA fees for the time that you are an owner of the property but also for the attorney’s fees that the association paid to its attorney who is suing you.
Should I Respond to the Lawsuit?
Because HOA lawsuits are usually very easy for associations to win, you will usually be harming yourself by responding, since you will only cause the HOA’s lawyer fees to increase. The result will be a larger lawyer fee award added to the judgment that you will ultimately be liable to pay.
Ignoring the Lawsuit
Ignoring the lawsuit is also a bad idea because the association will automatically obtain a default judgment against you, plus an award of its lawyer fees. Then the association will proceed to attempt to enforce its judgment by doing a bank levy, a wage garnishment, or other judgment collection remedy. This means more lawyer fees that you will ultimately have to pay for.
Settlement of the Lawsuit
You can try to enter into a settlement with your homeowners' association or its attorney. However, most homeowners' association lawyers will demand full payment of the delinquent assessments, plus any attorney’s fees incurred to date, through a payment plan. So unless you are willing to repay all of the HOA dues plus lawyer fees, settlement is not your best option.
File Bankruptcy on the Lawsuit
Often, HOA lawsuits arise after you abandon a property that you no longer want, only to be surprised down the road that you are now on the hook for HOA fees. For many people who have been served with an HOA lawsuit, they are facing financial hardship and could benefit from obtaining bankruptcy debt relief. You can file bankruptcy on the lawsuit. Bankruptcy will stop a lawsuit instantly, including a lawsuit to collect HOA fees. Bankruptcy can be a good option to help you get out of an HOA lawsuit in San Diego.
Talk to a Lawyer
If you have received an HOA lawsuit you are likely asking yourself, “what can an HOA do to me?” The best advice is to talk to a lawyer immediately and discuss your options for dealing with the lawsuit. Without the help of an attorney, there is little you can do and you are almost certain to lose the lawsuit. If you wait too long, you may lose important legal rights. With the help of a bankruptcy lawyer, you can get out of debt San Diego, stop an HOA lawsuit, and get a fresh start.