California State Senator Denise Ducheny (D-San Diego) has introduced legislation in the California State Senate, SB 1511, that would:

• Provide super priority for HOA assessment over the foreclosing lender for a period of 180 days prior to the sale and would discourage lenders from loaning on common interest developments and from participating in workout agreement with homeowners.  Lenders opposition is sure to be strong on this bill as it could represent a huge loss of income on properties subject to HOA dues.
  
  
• The requirement that beneficiary or trustee’s send the HOA the name and mailing address of the successor may be difficult or impossible with respect to third party purchasers. 

“This is yet another service the trustee has to perform without compensation,” said Phil Adleson, Esq., UTA’s Corporate Counsel.  “In essence, this bill would make it difficult or impossible for HOAs to collect HOA dues from homeowners who enjoy the benefits of the HOA and then shift the burden of preforeclosure HOA dues to the lender.  This would exacerbate the credit shortage and make it more difficult for consumers to obtain purchase money or refinance loans secured by CIDs.”

The bill has been referred to the Judiciary Committee.

Click here for a copy of the bill.