Yesterday we announced that for the second year in a row, Senator Lundberg had introduced a bill (SB 122) which would destroy any incentive for investors to purchase the junior lien rights of homeowner associations. In addition to the adverse impact this bill would ultimately have on paying members in associations, SB 122 singles out associations for inequitable procedural treatment.
In the event an association files a Notice of Intent to Redeem (“Notice”), SB 122 would require associations (unlike other junior lienors) to submit the following additional information with the Notice:
● Written evidence of the date and reception number of the Declaration that created the association;
● If the association’s lien was assigned to an investor, copies of all assignments and recording information for each assignment;
● An itemized accounting of all amounts claimed due to the association, separately stating monthly assessments by month, late charges, fines, interest and any attorney fees or collection costs assessed;
● Evidence satisfactory to the public trustee, or designated officer of the public trustee, to determine whether all or any part of the association’s lien is entitled to redemption – including the amount of the superlien.
Associations have been filing Notices for years without these additional procedural requirements. The costs associations will incur in compiling and submitting this additional information is unnecessary and burdensome.
We will continue to provide you with updates on SB 122 as they become available.