SB 137 will prohibit Homeowner Associations from using non-judicial foreclosure for delinquent assessments under $2500

February 03, 2005

By Senator Denise Moreno Ducheny (View author info)

Senator Denise Moreno Ducheny (D-San Diego) unveiled a proposal, similar to one she offered last year, aimed at protecting homeowners in common interest developments from unfair foreclosures by their homeowners association.

Last year‚s legislation passed 33-1 in the Senate and 69-7 in the Assembly but was ultimately vetoed by the Governor. The Senator will work with the Administration to reach a consensus on this important issue.

SB 137 prohibits a homeowners‚ association from using non-judicial foreclosure for delinquent assessments of less than $2,500. It provides that homeowners‚ associations may collect such debts only through a judgment in small claims courts or by placing a lien without foreclosing on the property.

The proposal responds to complaints from homeowners who have had their homes foreclosed upon for a small amount of delinquent dues. One such case involved the Radcliff family of Copperopolis, who lost their life savings invested in their home when the association foreclosed over $120 in late fees. A study of five counties in the Bay Area by Sentinel Fair Housing found that the average debt in common interest development foreclosure actions was $2,557, including collection costs, which generally comprise the majority of the debt.

"It is simply wrong for a homeowners‚ association to take someone‚s home over a $120 debt said Senator Ducheny. Despite last year's setback, I am confident that the governor will work with me in this new session to protect California homeowners. This issue is too important to Californian's to allow this practice to continue.

This measure is supported by a variety of consumer groups including: American Homeowners Resource Center, Congress of California Seniors,California Alliance of Retired Americans, Gray Panthers and the Older Women‚s League (OWL).

Senator Denise Moreno Ducheny represents parts of San Diego and Riverside Counties and all of Imperial County. She is a member the Senate Committee on Transportation and Housing.

Notes

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