The Advocate - May 2012 - Idaho State Bar - Idaho.gov

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17 West Wood Investments, Inc. v. Acord, 141 Idaho 75, 106 P.3d 401 (2005); see Matheson v. Harris, 98 Idaho 758, 761, 572 P.2d 861, 864 (1977) (discussion of purpose of recording statutes). 18 Pinehaven Planning Bd. v. Brooks, 138 Idaho 826, 829, 70 P.3d 664, 667 (2003); Best Hill Coalition v. Halko, LLC, 144 Idaho 813, 817, 172 P.3d 1088, 1092 (2007). 19 Twin Lakes Village Property Assn., Inc. v. Crowley, 124 Idaho 132, 135 (1993). 20 Id. 21 City of Chubbuck v. City of Pocatello, 127 Idaho 198, 201 (1995); Best Hill Coalition, 144 Idaho at 817. 22 Thomas v. Campbell, 107 Idaho 398 (1984). 23 Brendale v. Confederated Tribes & Bands of Yakima Indian Nation, 492 U.S. 408, 442, 109 S.Ct. 2994, 3027 (1989) (Stevens, J. concurring); Michigan Protection and Advocacy Service, Inc. v. Babin, 18 F.3d 337, 345 (6th Cir. 1994). 24 Giltner Dairy, LLC v. Jerome County, 181 P.3d 1238, 1241 (Idaho 2008); City Of Idaho Falls v. Grimmett, 63 Idaho 90, 96, 117 P.2d 461, 467 (Idaho 1941) (proper and legitimate exercise of the police power). 25 Lane Ranch Partnership v. City of Sun Valley, 144 Idaho 584, 589, 166 P.3d 374, 379 (2007). 26 Brown v. Perkins, 129 Idaho 189, 193, 923 P.2d 434, 438 (1996). 27 Ellickson, Alternatives to Zoning; Covenants, Nuisance Rules, and Fines as Land Use Controls, 40 U.Chi.L.Rev. 681, 762 (1973). 28 I.C. § 67-6511A; Hauser City Code §§ 8-1-4(C); 32 The Advocate • May 2012 Thus, if board members act reasonably and in good faith, sex offender residence location restrictions can join the other CC&Rs to raise and maintain property values. 8-3C-6(C) (Any application for a subdivision that does not provide a master plan for development of the entire contiguous holdings of the developer/owner shall be rejected); Ada Co. Code § 8-6-3(C)(3) (covenants and restrictions optional for new subdivisions); but see Ada Co. Code § 8-3H-5 (maintenance requirements shall be incorporated into the protective covenants for a subdivision and the conditions of approval for development applications). 29 Post Falls City Code § 17.04.090 (where city codes are more restrictive or impose higher standards or regulation, the requirements of these regulations shall govern irrespective of private contractual provision). 30 I.C. § 18-8329; 18 U.S.C. §§ 3563(b)(13), 18 U.S.C. § 3583. 31 I.C. § 18-8331(4)(b). 32 Cityscape Magazine, U.S. Dept. of Housing and Urban Dev., Vol. 13, No. 3, 2011, p. 15. 33 Post Falls City Code § 5.08.130 (sexually oriented business cannot operate within 1,000’ of [schools, parks, churches, etc.]); Ada Co. Code § 8-5-3-2(A) (1000’ separation from schools, churches, and other adult entertainment establishments); see World Wide Video of Washington, Inc. v. City of Spokane, 368 F.3d 1186 (9th Cir. 2004) (Spokane ordinance upheld re zoning of sexually oriented businesses). 34 http://isp.idaho.gov/sor_id/. 35 Cityscape, Vol. 13, p. 16. 36 I.C. § 18-8323(2)(a-d). 37 I.C. §§ 67-2341(4) and (5) (defining “public agency” and “governing body”); and 67-2342 (requires open meetings). 38 I.C. §§ 18-8325(1) and (2). 39 I.C. § 18-8325(3). 40 I.C. § 30-3-80(1)(a-c). Huegli Mediation & Arbitration Personal injury, commercial disputes, construction law, professional liability. Available Statewide. James D. Huegli 1770 West State Street, Suite 267 Boise, ID 83702 Phone: (208) 631-2947 Fax: (208) 629-0462 Email: jameshuegli@yahoo.com Web: www.hueglimediation.com
Ca s e st u d y: Co l l e C t Pa s t du e hoa du e s o n fo r e C lo s e d Pr o P e rt i e s Jim Goldmann Mimura Law Offices, PLLC It is not uncommon for a foreclosed homeowner to be delinquent in the payment of his/her assessment dues owed to their homeowner’s association (HOA). Following a foreclosure, it is difficult for an HOA to collect the delinquent assessment dues (dues). Having recently dealt with this issue, I was able to employ a simple strategy that resulted in my client, the HOA, receiving payment. I was contacted last year by an HOA that had recently changed its board members; the new board found the accounts in a state of disarray. Since no clear and precise collection policies had been established, no action to collect unpaid dues had occurred. If this continued, the HOA potentially would be unable to meet its obliga- tions. Knowing they had a fiduciary duty to keep the HOA funded, the Jim Goldmann Board was required to take action. They could either pursue collection efforts for the unpaid assessments or charge a special assessment on all homeowners to make up for the deficit. The board opted to pursue the collection strategy and contacted me to assist them. In devising a collection strategy for a property, we had to consider the type of ownership interest held in that property. The state of the ownership interests in this subdivision varied and included owner-occupied properties, rental properties, bankowned properties and/or vacant properties. While each type of property presented its own unique collection challenges, the bank owned and/or vacant properties were the most problematic. Not only had the prior owner not provided payment, but the bank that foreclosed upon the property would not provide payment in a timely manner either. Furthermore, in the case of one property, the previous owner could not be located. The HOA was presented with the following options in order to collect the dues on these properties: (1) turn the debts over to a traditional collection agency; (2) effectuate a judicial foreclosure of an assessment lien (“lien”); (3) effectuate a non-judicial foreclosure; or (4) pursue a civil action. It seemed more economical and efficient to turn the debt over to a traditional collection agency. In so do- This HOA needed a low-cost method of collection that would ensure they received the full outstanding debt owed. ing, there would be little, if any, up front out-of-pocket expense for the collection costs. The HOA decided against doing this, however, because they would likely have to forfeit one-third or so of the debt collected to the collection agency. The HOA decided against any sort of foreclosure action, judicial or nonjudicial. Such action would be costly to the HOA in terms of attorney’s fees and the later management of the foreclosure process. Additionally, the board members are volunteers and have full-time jobs and families; their limited time precluded them from managing the foreclosure process. Lastly, the HOA decided against pursuing a claim in civil court against the owner. The likelihood of enforcing a judgment against a foreclosed owner is low. If the prior owner was unable to save their home from foreclosure, it is not likely that they would be able to satisfy any court judgment. This HOA needed a low-cost method of collection that would ensure they received the full outstanding debt owed. After review of the Covenants Conditions and Restrictions (CC&Rs), we did the following: (1) suspend the voting rights of delinquent homeowners; (2) served notices of delinquent dues and intent to file liens; (3) filed liens; and (4) amended the CC&R provision regarding the initiation assessment paid by a future purchaser of a property. One, the existing CC&Rs allowed the HOA to suspend the voting rights of members who have failed to timely pay dues. By suspending their voting rights, it was easier to meet the voting requirements required for amendments to the CC&Rs. The bank owners objected to this change. However, since the policies and procedures of the CC&Rs were followed, nothing ever became of this objection. Two, as required under the CC&Rs, notice was provided to the owners of the delinquent dues and the intent to file a lien. In this notice, the owners were informed that failure to pay would result in a special assessment to that homeowner equal to the cost of collection. This collection cost would be a flat fee amount payable if a lien was filed. Three, liens were filed. The liens, as written, were required to be renewed every six (6) months. Typically, per Idaho Code, these liens are renewed at one year intervals. In order to prompt action, the HOA opted to set a six-month time requirement. If the owner failed to pay, there would be continuing collection charges for each renewal. In response, the bank offered to pay a pro-rated amount of the dues; the HOA notified the bank that the CC&Rs of this association did not allow for the proration of dues. The bank remitted a pro-rated amount of the unpaid dues anyway and refused to remit further payment. Upon receipt of the partial payment, the HOA rescinded the outstanding lien and filed a new notice and lien upon the property including additional collection costs. Faced with continuing additional collection costs, the bank remitted the remaining balance owed. Lastly, the HOA amended the CC&Rs in order to collect the pre-foreclosure dues owed on the property. The existing CC&Rs required a nominal initiation assessment (or “set up fee”) of $100. This section was amended to set the initiation assessment equal to the previous unpaid dues owed by any previous owner, plus $100. When the property sold, any purchaser would have to pay any dues owing and outstanding in the form of the initiation assessment. In this case, the HOA collected the previous outstanding balance as an initiation assessment upon the sale of the property. The HOA successfully collected the full outstanding balance of the dues owed on all properties. Some of the steps taken may not be appropriate in all circumstances. The CC&Rs of each association are unique. Before making a plan for collection, review an association’s CC&Rs closely. In most circumstances, it will be appropriate to apply many of the same procedures taken with this case. About the Author Jim Goldmann is employed as a public defender in Canyon County with Mimura Law, PLLC. The Advocate • May 2012 33
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The Advocate - May 2012 - Idaho State Bar - Idaho.gov

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