Pay your assessments. Sit down, calculate the unpaid assessments that you owe, and send in a check for the full amount of the unpaid assessments. If you cannot afford to pay, in full, the assessments that you owe, pay what you can.Read More
Short-term rental restrictions are popping up in planned communities and condominiums throughout Arizona at an alarming rate. While exactly what constitutes "short-term" may vary from one association to another, with prohibitive periods ranging from 30 days to in some cases one year, the bans are real and they are having a disastrous impact on owners. In some cases, these bans are being adopted by board edict; in others, a large number of homeowners band together. In both cases, it is very likely that new rental restrictions are unlawful regardless of the number of owners who support them.
There are several arguments for why new rental restrictions are invalid even in cases where a majority or super-majority of members votes to enforce the ban. The Arizona Condominium Act, for example, provides that an amendment to a declaration "shall not create or increase special declarant rights, increase the number of units or change the boundaries of any unit, the allocated interests of a unit or the uses to which any unit is restricted, in the absence of unanimous consent of the unit owners.” A rental restriction is the classic type of use restriction that would seemingly require such unanimous consent.
In addition, the Arizona Court of Appeals in Dreamland Villa v. Raimey held that amendments to declarations must be with unanimous consent if they “unreasonably alter the nature of the covenants" and that “any amendment must be directed at, and is limited by, the scope of restrictions and cannot create new obligations not previously mentioned. Associations cannot “use the Declaration’s amendment provision as a vehicle for imposing a new and different set of covenants, thereby substituting a new obligation for the original bargain of the covenanting parties,” the Dreamland Villa court held that an amendment that “would unreasonably alter the nature of the covenants,” such as those having a “substantial and unforeseeable” impact on owners, must be disallowed because “such servitudes [cannot] be imposed non-consensually under the generic amendment power.”
Such amendments are also often arbitrary and unreasonable. Courts have recognized that associations must act reasonably and cannot enforce restrictions or take acts that are arbitrary, unreasonable, or selective. Their rulemaking powers are limited to the adoption of “reasonable” rules and they do not have the power to adopt rules that “restrict the use or occupancy of, or behavior within, individually owned lots or units.”
We believe that the law is clear that new rental restrictions cannot be adopted with less than unanimous consent of all members. Associations, however, are coming up with creative ways to try to circumvent this unanimity requirement, passing rules regulating who can and cannot use the common areas such as pools or boat docks (surprise: short term renters are the ones being denied these rights).
If you are the victim of a rental restriction or have questions, call today for a consultation. In many cases, you have to act swiftly to prevent the new rental restriction from being enforced. If you do not, you could lose the right to do so!
HOA boards cannot exclude or prohibit board members from executive sessions or other meetings. In McNally v. Sun Lakes Homeowners Association #1, Inc., 241 Ariz. 1, 382 P.3d 1216 (October 13, 2016), the Court of Appeals rejected an association's argument to exclude a board member from all executive sessions, holding that "bypassing the motion, the Board prevented [her] from performing her duties and responsibilities as a director."
The Court wrote:
Participating in executive sessions was critical to McNally performing her duties as a director. Pursuant to A.R.S. §§ 33–1804(A)(1)–(5), directors of a homeowners' association are permitted to discuss a wide variety of important matters in executive session, including: legal advice from an attorney; pending or possible future litigation involving the association; personal, health, or financial information about association members, employees, or contractors; and job performance, compensation, health, and complaints regarding association employees. Indeed, during McNally's term, the Board frequently held executive sessions to discuss important matters such as the Association's budget, members' code of conduct, remodeling projects, creation/elimination of staff positions, and hiring a general manager. However, based on the Board's motion, McNally was not allowed to participate in any of these discussions.
When members are elected to serve as board members, "it is contemplated that the corporation shall have the benefit of the judgment, counsel, and influence of all of those directors.” Id. (quoting 2 William Meade Fletcher et al., Fletcher Cyclopedia of Law of Corporations § 406 (perm. Ed., rev. vol. 2014)). The Court of Appeals held that a meeting held in the absence of some of the directors and without notice to them is most likely illegal.
If you are an HOA board member and this happened to you or if you feel you need legal service regarding this matter, schedule a consultation with one of our attorneys or read more about your rights on our HOA law page.
The Arizona Court of Appeals recently imposed significant restrictions on homeowners' associations' rights to impose fines and penalties against homeowners. In Turtle Rock III Homeowners Association v. Fisher, 243 Ariz. 294, 406 P.3d 824 (October 26, 2017), Division One of the Arizona Court of Appeals held that homeowners associations are prohibited from imposing and collecting fines or penalties if the HOA did not have a valid, published written fine penalty policy. The absence of such a policy was per se unreasonable and, as such, the fines were unenforceable.
Arizona law generally allows HOAs to charge reasonable monetary penalties. See, e.g., A.R.S. § 33-1803(B). However, the Court held in a previous case that it was unreasonable to impose late fees based on a retroactively adopted fee schedule. In Turtle Rock III, the Court of Appeals considered whether daily or weekly fines were reasonable or "akin to a punitive damages award." The Turtle Rock homeowner faced "escalating monetary penalties for her failure to cure" certain maintenance violations.
The Turtle Rock III court rejected the fines on several grounds. First, it held that "[a]d hoc fines," that is fines that are imposed seemingly out of thin air, "are per se unreasonable." This is true "even where the HOA has the authority to levy fines." In addition, any fines must be promulgated pursuant to a prior published schedule of fines. In other words, secret fine policies are just as prohibited as no fine policies at all. The absence of a fine policy in the Turtle Rock case was a significant factor in the Court of Appeals' ruling for the homeowner. "The trial court did not make a finding that a promulgated fee schedule existed."
Finally, and perhaps most significantly, the Court of Appeals held that it was the Association's burden to prove that the fines imposed were reasonable. In Turtle Rock, the fees were $25.00 per day. The homeowner "was not required to present evidence controverting the existence of the fee schedule." That burden fell squarely on the Association suing to collect the fines. The Court of Appeals held that there was "no support in the record for a determination that a fine of $25 per day, for any violation, is reasonable. A stipulated damages provision made in advance of a breach is a penalty, and is generally unenforceable."
The Court's central holding is worth repeating:
Although the HOA had the authority under state statutes and the CC&Rs to promulgate a fine schedule for monetary penalties, there is no competent evidence in the record before us that it did so. Without competent evidence of a fee schedule timely promulgated demonstrating the fine amounts and the appropriateness of such amounts, monetary penalties are per se unreasonable. Even if a fee schedule existed, the HOA had the burden to prove its damages. Given our resolution of this matter, we need not address Fisher's due process claim related to the required thirty-day notice of a penalty. The trial court's award of monetary penalties is reversed and the attorneys' fees award below is reversed.
The last part of this ruling will continue to resonate: "Even if a fee schedule existed, the HOA had the burden to prove its damages." While an HOA may have the right to impose fees or penalties for CC&R violations, Turtle Rock suggests that any such fines, in addition to being set forth in a published fine policy, must relate to some damage that the HOA might suffer.
Most HOAs that have fine policies charge a minimum of $25.00 for an initial violation. These fines often escalate quickly. $25.00 becomes $50.00, which becomes $100.00, and so on. But if these fines bear no relation to any actual damages that an HOA actually suffers, it raises serious questions whether the HOA can even enforce such fines in the first place.
Have you been fined? Did you pay the fines or are you contesting them?
CALL US TODAY TO DISCUSS YOU LEGAL RIGHTS.
Arizona law prohibits a lender from filing a lawsuit to collect on a home loan where the loan represents “purchase money,” that is, money used to purchase the property. This includes purchase money loans that are technically denominated as “home equity lines of credit” taken out at the time of the original purchase of the home. It also includes first, second, and even third mortgages where the money was borrowed as part of the purchase of the property.
Consider the following illustration: You buy a $300,000.00 house. It is structured as two loans in what is commonly called an “80-20” transaction, meaning that the first loan is 80% of the purchase price, or $240,000.00, and the second loan is 20% of the purchase price, or $60,000. Because both of these loans are considered purchase money loans, the lenders cannot sue the borrower to recover the money in the event the borrower defaults. This is true even if the borrower has refinanced the original loan to get a better interest rate or other terms (note: the same may not be true, however, if the borrower has refinanced in order to withdraw some equity). This is also true even if the lender calls the second loan a “home equity line of credit.”
A common scenario in today’s real estate market is that the first mortgage forecloses. Ordinarily, this leaves the second lender without any remedy because they cannot file a lawsuit seeking to recover the difference. A number of lenders, however, are either unaware of, or deliberately ignoring, this prohibition by filing improper lawsuits. In many cases, the original loan has been sold to a different bank and the new bank fails to do its due diligence to determine whether the loan is a purchase money loan before filing a lawsuit. Because borrowers are unaware of the rules, in many cases they do nothing and let the lenders obtain substantial default judgments against them. Judgments to which the lenders otherwise would not be entitled except the borrower has forfeited his or her right to defend the lawsuit! In many cases, you may be entitled to recover your attorneys’ fees and costs if you are forced to defend such a lawsuit.
Don’t become a victim of predatory collection practices on the part of unscrupulous or unknowledgeable banks. If a bank has sued you on a second loan, we strongly advise you to consult with a lawyer to determine your legal rights. Contact the lawyers at the Dessaules Law Group today at 602-274-5400 to schedule a consultation.
The prevalence of foreclosures in the real estate market has had several unexpected repercussions to distressed homeowners who have made the decision to walk away from their home. Banks appear to be unable, incapable, or unwilling to handle the volume of foreclosures, so a distressed homeowner may continue to own his or her home for months, and occasionally even years, after receiving a Notice of Trustee’s Sale (rather than the 90-days stated in the Notice).
Because you are legally responsible for payment of assessments until you are no longer the owner, it is important that you continue to pay your HOA assessments until you have received confirmation that there is a new owner (most commonly in the form of a Trustee’s Deed Upon Sale). Many people who make the mistake of thinking that they can simply return the keys to the bank or that the Notice of Trustee’s Sale means they no longer own the property get a rude awakening after a few months: A hefty bill for unpaid assessments from the HOA that in all likelihood includes collection costs such as attorneys’ fees. The HOA also may file a lawsuit to collect those assessments. Because such collection actions almost always increase the amount you are obligated to pay, it is important to make sure that you continue to pay your assessments until the trustee’s sale is completed.
Many distressed homeowners are turning to bankruptcy as a solution, logically thinking that it simultaneously eliminates their personal obligation to pay HOA assessments and creates the vehicle for walking away from their home. Ordinarily, the bank will seek, and obtain, permission from the bankruptcy court to conduct the trustee’s sale and notice the trustee’s sale. Then, the homeowner is discharged from bankruptcy and is able to start fresh without being weighed down by the debts. At least this is how it is supposed to happen.
But what happens if the bank postpones that trustee’s sale or, as we are commonly seeing, simply cancels it for whatever reason. One possible reason for the bank to postpone or cancel the sale is that it has too many foreclosures and does not want to take on the added cost of HOA assessments, so it decides to hold off on the foreclosure, thus leaving you responsible for assessments. The HOA does not care that the bank is dragging its feet, but you should—you remain obligated to the HOA until you are no longer the owner! So while the discharge may have eliminated your personal liability for past assessments, the HOA can, and will, begin to charge you for assessments that accrue after you have been discharged from your bankruptcy. So it is important for a distressed homeowner who has filed for bankruptcy to stay abreast of the trustee’s sale and not simply assume that the bank has followed through with its stated intention of foreclosing.
The distressed homeowner is not without possible remedies against the bank. Call us to schedule a consultation with an attorney to discuss these possible remedies or read more about it on our Bankruptcy page.
Homeowner and condominium associations are increasingly adopting policies for shutting off water or other utilities where an owner has fallen behind in his or her assessments, owes fines or penalties for violating the governing documents, or is supposedly refusing to follow rules. Although people who own in a homeowner association generally are obligated to pay assessments, associations commonly use these water shut-off policies in order to force members to pay assessments, fines, penalties or other charges that they may not owe. These owners often face an unfair choice: Pay what we tell you to pay or live without water.
What many homeowners do not know is that such policies in many cases may be unenforceable. There is no reported case in Arizona that authorizes a homeowners association to shut off water or other utilities. The determination of whether the policy is enforceable depends on several factors, including (a) an association’s governing documents, (b) Arizona’s planned community and condominium laws, (c) the history of the policy and its enforcement, and (d) whether the association is seeking to collect assessments or fines and penalties. In many cases, the water shut off policy is not enforceable and can be successfully challenged in court.
In most cases, we find that the application of these factors provides fertile ground for challenging a shut-off policy. While this is especially true where the association does not pay for the utility that is the subject of the shut-off policy, the association does not necessarily gain the right to shut off essential services even if it pays for the utilities.
Please understand that we are not advocating you to refuse to pay assessments. Assessments have been called the “lifeblood” of a homeowners association and an association has every right to collect assessments…provided that the assessments are valid and it does so within the law. If you believe that assessments are invalid, we strongly encourage you to seek legal representation to learn about your rights and obligations. We recommend you seek legal counsel before taking any action. Although many people believe that they can simply stop paying assessments, it is our experience that this is not the wisest course of action and many people who stop paying assessments quickly regret it.
Courts cannot, and should not, condone a homeowner who has refused to pay valid assessments. But the courts also should not condone a homeowners association that has exceeded its lawful powers and seeks to use unlawful collection tactics. And, in many cases, the association is using the threat of water shut off to force a homeowner to pay disputed fines or penalties.
An Association’s Governing Documents Rarely Permit the Disconnection of Water of Other Utilities.
Although many associations will argue that their governing documents (CC&Rs and Bylaws) in general provide sufficient authority for shutting off utilities, this is rarely the case. Unless an association’s CC&Rs explicitly creates the right to shut off utilities as a collections tactic, then no such right exists. Even if the CC&R’s provide such an explicit right, that provision may be found to be unlawful.
The CC&R’s constitute a contract between the Association and the homeowners. In most cases, the governing documents spell out the rights and remedies of the association. Rarely do these enumerated rights include the ability to shut off water or other utilities for non-payment. Rather, they generally permit an association to commence legal action for damages or foreclosure (if applicable) and on occasion may also allow the association to suspend certain rights and privileges, such as the right to vote. If the right to shut off water is not expressly spelled out in the CC&Rs, then it is not part of your contract with the association.
Nor can the right be inferred or implied from a general right to collect assessments or charge fines. One court addressing this question has decried this “extra-legal means of enforcement,” holding that the association, in that case, lacked the legal right to shut off a homeowner’s water. See Western v. Chardonnay Village Condominium Ass’n, 519 So.2d 243 (1988). In general, the absence of express language authorizing utility shut off, and the inclusion of specific language spelling out the methods for collection of unpaid assessments, as if often the case, defeats any argument that such an implied right exists.
The association’s CC&R’s generally do not give it the right to employ collection tactics such as shutting off the water, disconnecting utilities, or prohibiting parking any more than the association could threaten to change the locks on your house or condominium. And an association does not have the right to change the locks on your house or condominium.
Arizona Law Does Not Permit the Disconnection of Utilities.
Arizona law also does not authorize the disconnection of water or other utilities. Arizona’s statutes governing condominiums and planned communities generally restrict exclusive an association’s remedy for non-payment of assessments to commencement of a civil action for damages and/or foreclosure of its lien (where applicable). Nothing in Arizona’s Planned Communities Act or Condominium Act allows an association to disconnect these essential services any more than it could change the locks on your home. Simply put, an association does not have the authority under Arizona law to deny water or other utilities as a means of collecting for past due assessments or penalties.
Arizona courts have analogized homeowners associations to landlords in many respects. See Martinez v. Woodmar IV Condominiums Homeowners Ass’n, Inc., 189 Ariz. 206, 941 P.2d 218 (1997). A homeowners association has no greater right to shut off water or other utilities than a landlord. And a landlord generally cannot shut off essential utilities in Arizona—even where the landlord pays for those utilities—as a means of compelling payment of rent. See A.R.S. § 33-1364. Thus, the fact that the homeowners association might pay the utility bill as a common expense does not necessarily create the right to shut off that utility to a non-paying homeowner.
The disconnection of essential services also arguably raises serious due process concerns. The Condominium Act and Planned Community Act both require commencement of legal process in order to collect past due assessments or fines. Where an association has received a specific grant of power under the statute, a collection policy that circumvents the legal process provided, and avoids the judicial oversight inherent in the legal means set forth in the statute, offends basic concepts of due process.
The History and Application of the Policy Is a Crucial Question.
Even if state laws and an association’s governing documents permit shutting off utilities, one should examine the history of the policy and how it is being enforced. Consider the following questions: Was the policy adopted in a properly noticed, open meeting? Was the policy communicated to the homeowners? Is the policy uniformly enforced? Unless you can answer, “yes,” to each of these questions, the homeowner may have valid grounds for challenging the policy.
Policies that are discussed and adopted in closed, private meetings by a select handful of homeowners subvert Arizona’s open meeting statutes (A.R.S. §§ 33-1248 and 33-1804), and are invalid and unenforceable. Although the open meeting statutes do not explicitly spell out the remedies for their violation, the statutes would be meaningless if actions taken during a closed or secret meeting are valid. Even if the policy was adopted in a properly noticed, open meeting, the failure of the association to disseminate the policy to homeowners could render the policy otherwise unenforceable.
Such policies, however, are almost never enforced uniformly or objectively. The policy is often enforced only against those designated as troublemakers or outsiders, or delinquent board members may exempt themselves or their friends from the harsh application of the policy; or the policy may be enforced arbitrarily or capriciously. Any evidence that the policy is not enforced on a uniform and non-preferential basis renders the policy enforceable. It also violates an association’s duty to treat all homeowners equally and fairly.
Is the Association Shutting Off Water as a Fine or Penalty?
The non-payment of assessments, as discussed above, should not be condoned and Arizona law provides remedies for the non-payment of those assessments. In many cases, an association has threatened to shut off water or other utilities as a means of forcing a homeowner to pay disputed fines, penalties, or fees. The nature of the monetary amount that is the subject of the collection effort is a crucial factor that must be considered in challenging the water shut off policy.
Although it is our position that water shut-off policies are almost always unenforceable, the challenge to the policy is strengthened where the alleged delinquent balance includes disputed fines, penalties, and charges other than just assessments. The rationale common employed by an association defending a water shut-off policy is that assessments are used to pay the utilities. This rationale is absent where the balance consists, in part or whole, of fines or penalties for alleged (and unproven) CC&R violations.
Arizona law distinguishes between assessments and fines. For example, a homeowners association has the statutory right to foreclose where the unpaid assessments exceed $1,200.00 or have not been paid for more than one year, the association generally does not have the right to foreclose for violation fines or penalties. If an association cannot foreclose if you paint your house the wrong color or leave your trashcan out overnight, why should they be allowed to shut off your water in order to force you to pay fines and penalties that you dispute and may not even be valid!
In many cases, a policy that allows the association to deny essential utilities or access to your unit is subject to challenge. Because every case is unique, you should not rely on this article as legal advice specific to your situation. But if you are faced with threats of having your water shut off, you should immediately consult a lawyer.
If you live in a homeowners association and have ever fallen behind on your assessments, chances are good you received one or more letters threatening legal action. If you have been unlucky enough to be sued by your homeowners' association and lost, chances are very good that your homeowner association has added court costs and attorneys’ fees to the amount of the unpaid assessments. Arizona law and homeowners association’s governing documents generally permit a homeowners association, if successful in court, to include its costs and attorneys’ fees in addition to the unpaid assessments in any judgment it obtains against you.
The next step would be for the homeowners association to try to collect its judgment. This might include demand letters, wage garnishments, or other collection methods. A common scenario that we see is that the homeowners association never limits its collection to the amount of the judgment and in most cases seeks to collect several thousand dollars, sometimes three or four times, or more, greater than the amount of the actual judgment, as part of its collection efforts. So that small judgment against you of $1,200.00, which you ignored, has suddenly turned into a wage garnishment of $6,000. And the amount continues to grow.
The homeowners association will defend the increase as part of its perceived right to collect costs and fees in connection with the original lawsuit. But whereas the fees and costs incurred getting the judgment may be recoverable, it is our position that a homeowners association and its lawyers do not have the unilaterally right to increases a judgment in order to collect such additional amounts.
Generally, “judgment must be a clear, ascertainable debt” that does not have prospective application. Reeb v. Interchange Resources, Inc. of Phoenix, 106 Ariz. 458, 459 (1971). A party seeking to collect such a judgment should not have the right to decide how much you owe—after all, isn’t that the purpose of the judgment? A judgment is a piece of paper that you should be able to determine, at any given time, exactly how much you owe. Let’s say you want to pay off that judgment, so you call up the association’s lawyer. It is not fair that the lawyer can give you one number in the morning when you call and another number later that afternoon when you call back to give your credit card. When the party trying to collect the judgment is increasing that amount in random amounts, without seeking court approval, it is in our opinion an abuse of the legal process and the judgment itself bordering on extortion.
Where the homeowners association or its lawyers has threatened to garnish wages, or garnished wages, in excess of the amount of the judgment, you are not without legal rights. In addition to challenging the garnishment, the federal Fair Debt Collection Practices Act also may afford a remedy to you to recover damages for misrepresenting the amount of the judgment, collecting more than the amount of the judgment, and other unfair collection tactics.
If you believe you are a victim of an over-aggressive homeowners association that is threatening to collect, collecting, or has collected more than its judgment against you, you should seek legal representation to determine whether you have a case.
Arizona law is clear on the subject of your HOA's records -- as a member of the HOA, you have the right to inspect and copy any and all association records. Meeting minutes, financial records, bank statements, vendor's contracts, bills, invoices, checks, voting records...just about anything!
The statutes say that "all financial and other records of the association shall be made reasonably available for examination by any member or any person designated by the member in writing as the member's representative." Although the association can charge you "not more than fifteen cents per page," the statutes make it clear that it cannot charge you "for making material available for review." The association "shall have ten business days to fulfill a request for examination" or "to provide copies of the requested records."
There are just five limited exceptions to your right to inspect:
1. Privileged communications between an attorney for the association and the association (note: engagement letters and attorney invoices are rarely considered by courts to be "privileged");
2. Pending litigation;
3. Meeting minutes from closed, executive sessions (note: many boards improperly hold closed meetings to discuss matters that should be discussed in open meetings);
4. Personal, health or financial records of a member or employee; and
5. Records relating to job performance, compensation of, health records of or specific complaints against an employee.
So why do so many boards of directors refuse to turn over documents? What are they hiding and why?
Arizona law gives homeowners the right to record all open board meetings.
Persons attending may tape record or videoptape those portions of the meetings of the board and meetings of the members that are open. The board of directors of the association may adopt reasonable rules governing the taping of open portions of the meetings of the board and the membership, but such rules shall not preclude such tape recording or videotaping by those attending.
A common tactic employed by numerous boards is to require a homeowner to give advance notice of their desire to record a meeting at least 24 hours before the meeting. Another common ploy is to require anyone who records or videos a meeting to give a copy to the board or face stiff fines. In our opinion, these are not the "reasonable rules" that the statute has in mind. Do you know for sure you are going to attend the next board meeting? Do you know for certain that you want to record or video that meeting? Very often the need to record does not arise until at the board meeting.
In this day and age of the iPhone and recording devices that can fit in a small pocket, it is not uncommon for someone to make a decision whether to record until sitting in a board meeting and watching a board member or manager act improperly.
You have every right to record the meeting. Do not let the board or its management company bully you with unreasonable rules. Know more about rights, read our HOA law page.
Is your HOA or condominium suing you?
Maybe you think -- or even know -- that you're current on your assessments. Or maybe you might be a little behind in your payments...but certainly not by that much! So why is your HOA suing you -- or threatening to sue you -- for so much more?
The association's lawyers will tell you they are entitled to late charges, collection costs, attorneys' fees, and court costs, but the real answer is far more complicated. While an HOA might be entitled to some of these charges and costs if it proves them in court, they first need to prove them. Far too often we find that the HOA, its management company, or its attorneys have simply added these amounts to your ledger. In some cases, these additional charges are multiples of the actual assessments that you owe. Then they tell the judge that you are responsible for the total amount. Period. They present the total balance to the judge and say that you owe it because it is on there.
But the law is not supposed to work this way. Imagine if you went into a store and the owner just started adding on various charges to your bill. A billing fee. A stocking surcharge. A customer charge. You'd want to know what each of these charges is, where the right to charge them comes from, and whether those amounts are reasonable. We do not expect you to pay them simply because they are listed on an invoice. Why should these rules by any different for your HOA?
They shouldn't be but all too often homeowner associations seem to play by their own set of rules. This is why we strongly recommend hiring, or at least consulting with, a lawyer the very first minute you learn about a dispute with your HOA. Early intervention in some cases can prevent a lawsuit or prevent the association from obtaining an excessive judgment against you.
If you feel your HOA is guilty of this or doing other similar malpractices. Consult with a professional to find out if you have a case.
It is really quite a simple and easy concept to understand: The board of directors generally must operate in open meetings. They cannot act in secret or transact business in closed meetings (except in very narrow circumstances). The statute states:
[All meetings] are open to all members of the association or any person designated by a member in writing as the member's representative and all members or designated representatives so desiring shall be permitted to attend and speak at an appropriate time during the deliberations and proceedings. The board may place reasonable time restrictions on those persons speaking during the meeting but shall permit a member or member's designated representative to speak once after the board has discussed a specific agenda item but before the board takes formal action on that item in addition to any other opportunities to speak.
You read that correctly. Not only does not board have to deliberate and vote in open meeting about any action it wishes to take, but you have the absolute right to speak before the board votes. Now, the board may impose reasonable time restrictions on you, but they cannot prevent you from speaking or only give members a chance to speak at the end of a meeting. Again, every member or member's designated representative has the right to speak before the board takes formal action. This includes voting on any action.
So you find yourself behind in your HOA assessments. The HOA lawyers are circling. Maybe they've threatened a lawsuit or already filed it? You call the HOA to try to find out how much you owe, but they just send you to the attorneys. You call the attorneys and leave countless messages. Or maybe they speak to you, but the amount they tell you that you owe is a lot more than you owed...because the HOA has added late fees, collection fees, and a ton of attorneys' fees to your account. It feels like an excessive amount to charge for a letter or two. You want to bring your account current, if only to avoid foreclosure, but you don't have the outrageous amount they're demanding that you pay. So what do you do?
Pay your assessments. Sit down, calculate the unpaid assessments that you owe, and send in a check for the full amount of the unpaid assessments. If you cannot afford to pay, in full, the assessments that you owe, pay what you can. Write "Assessments" on the memo line of the check. Then, deliver the check in person (and get a receipt) or send it by certified mail so you have a record of the check being sent. It sounds silly, but also make a copy of the check and, if possible, video yourself putting the check into the envelope and sealing the envelope (it is amazing how many times the HOA has claimed it never received a check).
If they refuse to accept the check, send it back to them. If they tell they cannot accept "partial payments," resend the check to them and instruct them, in writing, to apply your payments to unpaid assessments. Document and keep everything. Make them accept your assessments. If they keep rejecting it, keep sending it back in, keeping or taking photographs every time of the envelopes come to you.
Your payment -- or attempted payment -- of assessments is a valuable defense if your HOA decides to file a foreclosure lawsuit. You might not be able to avoid a lawsuit, but at least you can prepare to defend the lawsuit. Imagine yourself in court six months or a year later when the HOA wants to sell your home at a sheriff's sale to collect unpaid assessments. If you have records showing every time you paid or attempted to pay those assessments, it very well may be the difference between losing and saving your home!