Effective Date: August 7th, 2024
Key points:
Mediation Requirement Before Foreclosure: HOAs are mandated to offer mediation to homeowners at least 30 days before initiating foreclosure proceedings for unpaid assessments or dues. This step aims to facilitate dispute resolution without immediate legal action.
Caps on Attorney Fees: The bill limits the amount HOAs can charge homeowners for attorney fees related to collection efforts. Reimbursement for such fees is capped at the lesser of $5,000 or 50% of the original amount owed, protecting homeowners from excessive legal costs.
Preconditions for Lien Foreclosure: Before foreclosing on a lien for unpaid dues, an HOA must obtain a personal judgment against the homeowner or demonstrate attempts to do so, such as being unable to serve the homeowner within 180 days. This ensures foreclosure is a last resort.
Right of Redemption: The bill establishes a 180-day redemption period following a foreclosure sale, allowing homeowners or eligible parties to reclaim the foreclosed property by reimbursing the purchaser. This provision offers homeowners additional time to address their financial obligations and retain ownership.
Prohibition of Certain Purchasers in Foreclosures: Individuals or entities affiliated with the HOA or its management, such as community association management companies representing the HOA, are prohibited from purchasing properties foreclosed upon under an association lien. This measure aims to prevent conflicts of interest during foreclosure sales.
