California HOA Payment Plan Request Letter

What this letter does

A payment plan request asks the board to meet with the owner about the debt stated in the association's pre-lien notice. Civil Code section 5665(a) lets an owner submit a written request to meet with the board to discuss a payment plan, and requires the association to provide the owner the standards for payment plans, if any exist. Certain owners of timeshare-type interests described in the Business and Professions Code are treated differently, so check the statute if that applies to you.

Key rules in section 5665

• The window. The board must meet with the owner within 45 days of the postmark of the request, if the request is mailed within 15 days of the postmark of the notice.
• Where the meeting happens. The meeting is in executive session. If there is no regularly scheduled board meeting within that period, the board may designate a committee of one or more directors to meet with the owner.
• What a plan can include. A plan may incorporate assessments that accrue during the plan period. Additional late fees do not accrue during the plan period if the owner complies with the plan's terms.
• Liens. A payment plan does not impede the association's ability to record a lien on the owner's separate interest to secure payment of delinquent assessments.
• Default. If the owner defaults on the plan, the association may resume its efforts to collect the delinquent assessments from the time before the plan began.

Related collection rules

Under section 5650, regular and special assessments are delinquent 15 days after they become due unless the declaration allows a longer period. When an assessment is delinquent, the association may recover reasonable collection costs including reasonable attorney's fees, a late charge of no more than the greater of 10 percent of the delinquent assessment or ten dollars (unless the declaration sets a smaller charge), and interest at no more than 12 percent a year starting 30 days after the assessment is due (unless the declaration sets a lower rate). A late charge or interest above the declaration's own limit is not allowed.

How to use the letter

1. Check the date on the pre-lien notice. The 15-day request window runs from the notice's postmark.
2. Mail the letter promptly and keep proof of the mailing date. The statute counts from the postmark.
3. Propose terms you can sustain, and include the assessments that will come due during the plan.
4. Bring records of what you have paid, and ask for an itemized ledger if the amounts look wrong.

Related letters

The notice that starts this process is the California pre-lien notice. Owners facing hardship can send a hardship letter. To contest the amount, use the HOA dispute letter.

Statutes change, so confirm the current text of sections 5650, 5660 and 5665 on the California Legislature's website. The HOA late fee letter and fee waiver letter cover the charges a plan often addresses, and the sample payment agreement request is a general version for other states.

Common questions

How soon must a California HOA meet about a payment plan?

Within 45 days of the postmark of the request, if the request was mailed within 15 days of the postmark of the notice.

Do late fees keep growing during a payment plan?

Not while the owner complies with the plan's terms. Section 5665(c) says additional late fees do not accrue during the plan period.

Does a payment plan stop a lien?

No. Section 5665(d) says a plan does not impede the association's ability to record a lien to secure the delinquent assessments.

This page gives general information and sample wording. It is not legal advice, and requirements differ by state and by association.