ALS advances all collection costs — recording fees, title searches, trustee sale guarantees, publishing costs, etc.

Most delinquencies cleared within 90 days.

Collections are easy to initiate. A signed authorization form mailed to our office starts the process without delay.

The program is flexible, offering short-term payment plans to owners experiencing temporary financial difficulties.

Attorneys oversee all aspect of the collection process to ensure compliance with continuing changes in the law.

Monthly reports sent on the status of each collection.

At ALS, our combined experience has found that an aggressive stance taken by ALS in this sometimes awkward area usually results in the timely collection of assessments on the association's behalf to the mutual benefit of the association and its homeowners. Let ALS and our attorney-supervised, systemized non-judicial foreclosure procedures contribute to the association’s success.

The collection process begins by informing the delinquent homeowner, in writing, that assessments are overdue. If a demand letter by the association, its managing agent or a collection professional such as ALS does not prompt action, other measures must be taken. California law provides three options:

1. A civil action to collect the debt, usually a small claims court action.

2. Judicial proceedings to foreclose on the recorded assessment lien.

3. Foreclosure of the assessment lien non-judicially by a Trustee’s sale.

In the case of a personal lawsuit and a judgment against a delinquent homeowner, attempts to collect the judgment can be time-consuming, expensive and often fruitless.

A recent study found that only 40% of all small claims court judgements are ever collected. Likewise, judicial foreclosure, as a court action, also requires an order from a judge. This is a lengthy procedure, requiring several months to several years. Once a judgement is obtained, the association may either proceed with foreclosure on the unit, or attempt to collect the amount due from the homeowner’s assets. Generally, the association will be required to advance costs and/or pay attorney’s fees.

Non-judicial foreclosure, on the other hand, does not require a lawsuit or court order. An association can immediately proceed with the foreclosure of a delinquent homeowner’s unit or home, just as a lender would foreclose on a trust deed. The delinquent homeowner can stop the foreclosure process only by paying the delinquent assessment, or by applying to the court for an injunction. By utilizing ALS, the association pays no deposit or advance fee — all fees and costs are billed to the delinquent homeowner.

We believe non-judicial foreclosure is the fastest and most effective way to collect overdue assessments …. in over 90% of the cases, the delinquent assessments, costs and fees are collected from the delinquent homeowner.

THE SECOND STEP — Attorney’s Notice
If the homeowner has not paid the delinquent assessments as requested by your demand, the ALS takes charge of the collection process.

Upon receipt of the signed authorization form, we will immediately write an attorney’s letter to the delinquent homeowner advising that the matter has been turned over to ALS for processing and collection of delinquent assessments.

The homeowner will be given thirty (30) days to cure the delinquency. The homeowner will be charged attorney’s time for preparation of the file, review and recalculation of the accounting, review of the governing documents, initial attorney letter and phone conversations with the homeowner and management company and/or Board of Directors.

Note: Once the matter has been turned over to ALS, the association should not have any further contact with the homeowner regarding the delinquent assessments, and should not accept any money from the homeowner. All inquiries must be directed to ALS. Otherwise, the foreclosure process may be hampered, resulting in the association being responsible for all of ALS’s costs and fees. Please refer all questions and/or correspondence from the delinquent homeowner to our office.

When the homeowner pays the amount of the delinquent assessments plus all fees and costs, the money will be forwarded to the association.

 THE THIRD STEP — Notice of Delinquent Assessment/Lien
If thirty (30) days after the attorney’s letter assessments still remain unpaid, ALS will prepare and record the Notice of Delinquent Assessment. We will forward a copy to the homeowner with a cover letter stating that a lien on their property for the total amount due has been recorded and that they have thirty (30) days to satisfy the lien. The lien will not be removed until all delinquent assessments, cost and fees have been paid. The homeowner will be billed for the preparation and recordation of the lien and, ultimately, the Release of Lien.

THE FOURTH STEP — Notice of Default/Foreclosure
If the delinquency is not cured within thirty days from the recording of the lien, we will proceed to have our Trustee record the Notice of Default, which is permitted under California law. This is the first step of the foreclosure process; the assessment lien being foreclosed in the same fashion as a trust deed. There is then a ninety (90) day redemption period after the Notice of Default is recorded.

Upon expiration of the ninety days, if the homeowner has not either entered into a payment plan with the association, or paid the delinquency in full, a sale is consummated, and all the delinquencies will be paid to the association from proceeds of the sale to a third party. If the property reverts to the association, there is the possibility that the association will not obtain the entire amount of the unpaid assessments. Our experience, however, is that few homeowners will allow their home to go to a foreclosure sale for nonpayment of delinquent homeowner assessments.

With a completed foreclosure (judicial or non-judicial), times are changing, and title companies are realizing that foreclosure on an assessment lien is an appropriate way to collect delinquent assessments and are issuing title insurance policies on foreclosure property.

In the event the foreclosure process is terminated (by bankruptcy or foreclosure of a senior lien), a cancellation fee will be charged to the association, depending upon which stage the procedure has reached and what fees have been incurred.

You are requested to review fully the authorization form provided. You will be notified of the status of each account by copies of letters and other notices which will be forwarded to you at the time they are sent to the delinquent homeowner, along with our monthly status report which is sent out at the beginning of each month. We make every effort to complete the process within the guidelines of our timetable and request that you refer to this article for information relating to the procedure. However, should you have any question, please feel free to contact our offices.