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CalAttorney2, Lawyer
Category: Consumer Protection Law
Satisfied Customers: 10213
Experience:  I am a civil litigation attorney representing individuals and businesses.
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We pay Homeowner's Association dues in a California

Customer Question

We pay Homeowner's Association dues in a California subdivision. The dues were to be taken out of an account (1 other home is autopay) but mistakenly was set up wrong on our part. The amounts due were sent to collections but we had paid the full amount via a bank check prior to receiving the collection letter. The collection company said they received the account from the HOA prior to receiving our amounts, even though everything crossed in the mail. The amount was received by the Association via the Collection company. Now, the collection company says we still have to pay the amount due to complete the collection which are fees totaling $535 ($225 for an "agent fee" and $299.70 for "collection charges".... (the amount due to the HOA, including late fees etc. was $857.00 and is paid). Any advice and is this legal?
Submitted: 3 months ago.
Category: Consumer Protection Law
Expert:  CalAttorney2 replied 3 months ago.

Dear Customer,

Thank you for using the forum. My name is ***** ***** I do hope to assist you today.

Unfortunately, the HOA is entitled to collect these fees under both the Davis Stirling Act (the CA statute governing common interest developments), and almost certainly under the governing documents of your Association (this is a standard term)).

Keep in mind, the HOA incurred a fee that it is obligated to pay to the collection company as soon as they sent the account to collections (even though you sent your money in, the collection company still charges the HOA, it is not equitable for the other HOA members to have to pay this expense (or a proportionate share) as the reason for the amount being sent to collections was by your non-payment (even though it was inadvertent and promptly corrected)).

The relevant section of the Davis Stirling Act is cited and explained here:

While the fee may seem high when compared to the amount due, it is likely that this is a flat fee. You can ask for more information about how the fee was arrived at (ask for an itemized statement of charges), but in my experience (I have a fair amount with HOA collection matters), this is not unreasonable.

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