In a down economy and/or real estate market, a community association may be forced to pursue delinquent assessments by way of a small claims judgment, especially if the senior lender has foreclosed and extinguished the association’s assessment lien. While initially, an association’s chances of recovery are low if the owner’s property has been foreclosed, an association may have several options available years later. After all, a judgment will last for 10 years and may be renewed by the association (provided it is renewed prior to the 10-year expiration). The Judgment – which accrues interest at 10% and may include post-judgment attorney fees and costs – may be enforced in at least the following ways:
- Bank Levy. The association may pursue a bank levy after a bank account is identified.
- Wage Garnishment. If the association is able to identify an employer, a wage garnishment may be pursued and executed directing the owner’s employer to deduct a portion of his or her wages.
- Foreclosure. A Judgment lien can be created and attach to all real property owned by the judgment debtor in the county in which an Abstract of Judgment is recorded. Assuming sufficient equity exists, the association may pursue foreclosure of the judgment lien.
- Rent Assignment. If the owner is leasing the property, the association may request that the court issue a rent assignment order directing the tenant to pay rent to the association.
- Till Tap. If the owner has a business, the association could have the Sheriff collect cash kept in the register or received from customers.
Indeed, California law provides several mechanisms by which the association can pursue other assets that may be owned.