SACRAMENTO -- Homeowners faced with the prospect of losing their residences over unpaid assessments to their homeowners associations descended on the state capital Tuesday in hopes lawmakers will come to their aid.

At a special hearing, consumer and homeowner advocates squared off with homeowner association and industry representatives over the power of an association to foreclose on a home without a court order. 
 

Sen. Denise Ducheny, D-San Diego, who chaired the hearing of the Senate Housing and Community Development Committee, said she and other legislators are planning to introduce bills by Friday’s legislative deadline. 

The measures initially will only be placeholders. Ducheny said they must study the issue further to determine how to protect homeowners and ensure associations can collect assessments to pay for services due all homeowners. 

"I think our concern is getting to foreclosure too quickly" in the process of collecting assessments," Ducheny said. 

An estimated 70 percent of Coachella Valley residents live in developments governed by a homeowners association. In associations, residents pay an assessment for services that may include road maintenance, landscaping and recreational centers. Often an association offers services similar to those that cities or counties may provide for other Californians.

Attorney Wayne Guralnick, who represents more than 300 homeowners associations in the Coachella Valley, said from his Palm Desert office that the process known as non-judicial foreclosure is a necessary tool for an association to leverage the fees it needs to operate.

A majority of homeowners ultimately could be forced to pay higher assessments to make up the shortfall for those who lapse, he said.

"No one wants to take away a home, no attorney or association. They just want to collect the assessments," he said. 

But consumer and senior advocates argued in Sacramento that the use of non-judicial foreclosure had been abused to the point that it needs to be banned as tool for homeowner associations. 

"I think we have a serious (case) here over technically legal practices that have stepped over the line so far into the immoral realm that the Legislature now must step in," said Norma Garcia of Consumers Union. 

The showcase example of non-judicial foreclosure at Tuesday’s hearing was the case of Thomas, 62, and Anita, 65, Radcliff, who lost their home in a foreclosure in Copperopolis for failing to pay $120 in assessments to their association in Calaveras County. 

"I never thought this could happen to anybody until it happened to my family," said Joel Radcliff, the couple’s son. 

A family lawyer said he was preparing a court challenge for the couple, who are still living in their home even though it auctioned off in December, and there was some dispute over the details of the case. 

It and other examples cited drew emotional reactions from an audience peppered with apparently disgruntled homeowners as well as sympathy from association representatives. 

"Losing your home is always tragic regardless of whether the loss is caused by natural disaster, financial problems court action or for any other reason," said Skip Daum, representing the Community Associations Institute, which represents associations and the varied industries that serve them. 

Less than 1 percent of delinquent homeowner disputes ends in actual home sales, he added. 

Attorney Guralnick said the non-judicial process is lengthy, with as few as six notices going to homeowners, with a spread of at least 30 to 35 days between each notice. 

Speakers at the hearing recommended a variety of alternatives to foreclosure, including payment schedules, wage garnishment and small claims courts for amounts under $5,000, as well as tightening up notice and other procedures for foreclosure. 

There also were recommendations for state regulation of homeowner associations as well as the debt collectors they hire. 

Association representatives and related industry officials said they were willing to work with legislators on alternatives but insist they needed to maintain the foreclosure option. 

"How can we collect if we don’t have lien rights?" Guralnick said. "Cities have lien rights. The state has lien rights. The state keeps shifting its responsibilities to the cities and the cities to the HOA but it keeps taking away their powers to enforce and collect."