WHAT ABOUT LIENS IF WE ARE NOT A CID?
In California, associations that are common interest developments under the Davis Stirling Act usually have the right by the regulatory recorded documents to file liens and exercise rights to judicial or nonjudicial foreclosure for unpaid assessments. They usually have the right to pursue a personal debt action as an alternative means of collecting delinquencies. But what if you are not a common interest development (CID)?
Here is the question that triggered this blog:
“Six years ago, our board and attorney decided we are not a CID after 28 years of existance. We only have common area that is landscaped through a Landscape Maintenance District. Despite that and the many references in the newsletter to not being a CID, the Attorney continues to file ASSESSMENT LIENS pursuant to Davis-Stirling. I believe that is only allowed if we are a CID subject to Davis-Stirling. I can’t find any other reference to this special lien in the Corp. Code or otherwise. Don’t they have to file in court, win, and file an abstract to have a lien on Real Property?”
I would say check the association recorded Declaration (sometimes called CC&Rs), or whatever recorded document regulates the association. If this recorded document has proper legal language sufficient to authorize the board to record a lien that could be “foreclosed”, then the lien and foreclosure could be legal if proper notices are given to the owner of the property. The question is what the language, if any exists, actually authorizes. All association powers and authority comes from the governing documents and what they say about the type of association and governing body, and rights and obligations of the owners. No one can pull these rights “out of a hat”.
Some older associations have authority for lien rights in the Bylaws or Articles of Incorporation. I have seen just about everything. I could not bless a lien and foreclosure action that occurred without some proper authority in a recorded document that regulates a particular piece of property.
I do not give advice about what is going on in any particular situation because I cannot second guess whatever any attorney is recommending without familiarizing myself with the paper trail that leads to the rights. I do not believe the Davis Stirling Act authorizes the type of lien and foreclosure regulated under “Davis Stirling”, without supporting language in the recorded regulatory document for any given situation in California. And without the support of being subject to the Davis Stirling Act, the authority in the documents must stand alone, and be legal and be clear or recording liens could create an unlawful “cloud” on the title that could be challenged.