How To Turn $147 Into $10,000 – The WRONG Way

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Castilian Hills Homeowners Association v. Chaffins, (Wash. Ct. App. Oct. 22, 2018)

The Facts

Homeowner bought home in 2004. In 2016, the homeowner failed to pay his $147 assessment.  The homeowners association (“HOA”) assessed a $20 late fee. The homeowner still did not pay, despite the normal language in the HOA governing documents about interest, the right to lien and reasonable attorney fees. After more notices, the HOA filed a lien for $525.52 and then a complaint against the homeowner seeking the $525, plus interest and attorney fees.   The homeowner argued to the court that the HOA was “required by statute to provide notice and an opportunity to be heard” prior to filing a foreclosable lien.

The Court

The trial court agreed with the HOA and awarded it the unpaid assessments, plus $9,540 of attorney fees, plus costs of $429. The homeowner appealed.  The appellate court held that the Covenants, Conditions and Restrictions (“CC&R’s”) controlled the property and allow for the recording of a lien on past due assessments. The court held that the lien did not flow from the statute, but from the CC&R’s, and once recorded, the homeowner was bound to their terms. The appellate court then affirmed the trial court’s decision and awarded the association reasonable attorney fees and costs on the appeal.

Lesson

No matter how far you travel down the wrong path, stop and turn back. In this case, it seems as though pride got the better of the homeowner.  They apparently had numerous opportunities to pay the assessments, but instead they became creative.  It was an expensive creation.  This can work just as easily against an association.  Before going too far, look objectively at a situation and make sure your actions make sense, including economic sense.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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