Delinquency

The failure of a homeowner to pay assessments or other charges by the due date. Delinquent accounts place a financial burden on the entire community because the association must still meet its operating obligations regardless of collection shortfalls, often forcing other homeowners to subsidize the deficit. In California, the Davis-Stirling Act establishes a structured collection framework: the association must send a written pre-lien notice at least 30 days before recording a lien (Civil Code Section 5660), giving the owner an opportunity to pay or request a payment plan. The association may charge a late fee not exceeding 10% of the delinquent assessment (Civil Code Section 5650(b)(2)) and interest at a rate not to exceed 12% per annum (Civil Code Section 5650(b)(3)). Once an account is 12 months or $1,800 delinquent (whichever is less), the association may record a lien and pursue judicial or nonjudicial foreclosure (Civil Code Sections 5700–5740). Before foreclosure, the association must offer the owner a right to participate in internal dispute resolution (IDR) under Civil Code Section 5900 and alternative dispute resolution (ADR) under Civil Code Section 5925. Boards have a fiduciary duty to pursue delinquencies consistently and fairly, applying the collection policy uniformly to all homeowners. High delinquency rates — often measured as accounts receivable exceeding 5% of annual assessments — can jeopardize FHA certification, reduce the community's attractiveness to lenders, and signal financial instability.