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Feldsott Lee Pagano & Canfield
Orange County Homeowners Association Law Firm

October 2014 Archives

Court of Appeals Takes Stand on Partial Payments

In an opinion filed on October 14, 2014 and certified for publication, the California Court of Appeal has held that a homeowners association must accept a partial payment made by an owner of a separate interest in a common interest development and must apply that payment in the order prescribed by statute (i.e., to assessments first). The Court further held that the association's obligation to accept partial payments continues after a lien has been recorded against an owner's separate interest, and the association's ability to pursue foreclosure of its lien depends upon the amount and the age of the assessments following application of the partial payments. (See opinion filed in Huntington Continental Townhouse Association, Inc. v. Miner (2014) Case No. G049624.)

Management Companies and Liability Concerns

(1) Contractual Liability
The management company/community manager acts as the agent for the association/board of directors. Under general laws of agency, the association/board of directors is the principal and the management company/community manager is the agent. So long as this agency relationship is disclosed to the third party (i.e. contractor), it is only the principal and not the agent that has any contractual liability to that third party.

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