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  1. #1
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    Jan 2010
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    Lightbulb Obligation of HOA to Notify Owner of Dues Increase

    My question involves real estate located in the State of: California

    If the landlord increases the rent of an dwelling which is rented on a month to*month basis but the tenant continues to pay the previous or lesser amount and the landlord accepts the payment & cashes the check, the landlord loses all legal recourse to collect the difference.* But does this apply to monthly*HOA dues payments?* For example, Wes pays $300 per month HOA dues; his association raises the dues to $325, but Wes continues to pay $300 and the association cashes the checks every*month.* Six months later, they come after Wes, threatening to place a lien on his property unless he pays the $150 difference.* Does the association have any legal recourse to collect the $150?

  2. #2
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    Mar 2013
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    Default Re: Obligation of HOA to Notify Owner of Dues Increase

    Quote Quoting Lizard
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    Does the association have any legal recourse to collect the $150?
    Yes.

    It's a whole different set of laws and contract in an HOA than with a rental.

    Wes needs to pay the $150 and the $325 from then on.

  3. #3
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    Default Re: Obligation of HOA to Notify Owner of Dues Increase

    Quote Quoting Lizard
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    If the landlord increases the rent of an dwelling which is rented on a month to*month basis but the tenant continues to pay the previous or lesser amount and the landlord accepts the payment & cashes the check, the landlord loses all legal recourse to collect the difference.
    Would you please be kind enough to cite the legal authority on this?

  4. #4
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    Default Re: Obligation of HOA to Notify Owner of Dues Increase

    Quote Quoting L-1
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    Would you please be kind enough to cite the legal authority on this?
    It's not quite as black and white as Lizard made it seem, but the landlord accepting the old rent amount after the rent increase was to take effect may be considered a waiver of the increase for the months in which the landlord accepted the payments at the old rent amount. So the issue is what evidence the court has that the landlord was waiving the rent increase. In a case from over 100 years ago, which appears to still be good law in California, a commercial landlord had a month to month lease with her tenant for $65/month. The landlord in June 1908 served notice to the tenant of a rent increase to $100/month. The tenant, however, continued to pay $65/month after the rent increase. The payments were made to her agent, who accepted the payments and deposited them. The tenant claimed that the agent had orally waived the increase (which would be a problem under the rule that a contract in writing generally must be modified in writing, not by oral agreement). The agent in a statement denied having waived the increase, and the agent was dead by the time of trial, so he could not testify on the matter. The trial court found that the fact that the agent took the $65 checks and deposited them without objection was evidence of a waiver and found for the tenant on that issue. The California Supreme Court affirmed, stating:

    But it sufficiently appears from the unconditional acceptance by the agent of the lesser amount of rent that the oral agreement became executed and therefore binding. It is argued that Mrs. Alden knew nothing of this purported waiver, and this is doubtless true. Yet she had clothed her son as her agent, actual or ostensible, with sufficient power to make the waiver, and she is bound by his conduct in so doing. True it is, also, that Haile, who at the trial was dead, had denied by verified answer that he had ever agreed to such a waiver. True it is that in other respects the evidence upon the matter is sharply conflicting, but, as has been said, there is sufficient to support the finding of the court in this regard.

    Alden v. Mayfield, 164 Cal. 6, 9, 127 P. 45, 47 (1912). Though old, the case appears to still be good and has not been overturned. That's not surprising; the principle is still a good one in most, if not all, states. The landlord accepting the old rent amount without objection is evidence supporting a tenant's claim for waiver. Other facts might rebut that implication of waiver, so it is not the case that accepting the old amount would doom the landlord to losing the increase, but it certainly can have that result. For that reason lawyers, including myself, will caution a landlord about accepting such checks and advise the landlord to return the check and insist on the proper amount (which IMO is the vastly preferred thing to do) or at least promptly notify the tenant, preferably in writing, that the check is accepted only as partial payment of the rent and that the tenant still owes the difference. Taking the check for the old rent amount, depositing it, and saying nothing at the time simply invites a conclusion that the landlord waived the extra rent for that month. Particularly in tenant friendly California, I think a landlord in that position will often be SOL.

  5. #5
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    Jul 2018
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    Default Re: Obligation of HOA to Notify Owner of Dues Increase

    Quote Quoting Lizard
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    If the landlord increases the rent of an dwelling which is rented on a month to*month basis but the tenant continues to pay the previous or lesser amount and the landlord accepts the payment & cashes the check, the landlord loses all legal recourse to collect the difference.*
    Where are you getting this? This isn't correct. While I don't disagree that a waiver argument could be made, more evidence than the mere acceptance of the lower rent would be needed to sustain such an argument.


    Quote Quoting Lizard
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    But does this apply to monthly*HOA dues payments?
    No (especially since the premise of the question is erroneous).


    Quote Quoting Lizard
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    Does the association have any legal recourse to collect the $150?
    Yes.

  6. #6
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    Default Re: Obligation of HOA to Notify Owner of Dues Increase

    My impression has always been that the short rent would be applied to the new rent, any shortage would come from the security deposit and the tenant would be notified of such. Once the security deposit is exhausted, the next short check woule be deposited, but a 3 day pay or quit would be issued for the shortage and if not paid, proceedings to evict would go from there. No?

  7. #7
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    Default Re: Obligation of HOA to Notify Owner of Dues Increase

    Quote Quoting L-1
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    My impression has always been that the short rent would be applied to the new rent, any shortage would come from the security deposit and the tenant would be notified of such.
    (Bolding added.) States vary on what the security deposit may be used for. I've not researched that for California. However, even assuming that it could be used in that manner, what you wrote that I put in bold is significant. Promptly notifying the tenant that the rent payment was not sufficient and that the landlord was taking the difference from the security deposit would put the tenant on notice that the landlord was not waiving the rent increase for that month. The key here is when the matter gets to court and the tenant claims waiver what evidence is there one way or the other to support the idea that the landlord waived the increase? If the only evidence is the that the landlord took the payments without saying anything at the time and then later there are simply the conflicting claims of the tenant and landlord about whether it was waived, the court may well find, as it did in the Alden case I cited, that the landlord waived the increase for those months. A landlord not wanting to take that risk should either refuse the payment altogether (which, as I said earlier would be my preferred solution) or to at least promptly notify the tenant in writing that payment was not enough, that the landlord was not waiving the underpayment, and outline the consequences should the tenant not cough up the underpaid amount.

  8. #8
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    Mar 2013
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    Default Re: Obligation of HOA to Notify Owner of Dues Increase

    T-M, excellent explanation of the rent waiver issue. I was aware of it when I had my rentals and learned early on not to accept partial rent.

    However, the OP's original question had to do with payments of dues to an HOA:

    But does this apply to monthly*HOA dues payments?* For example, Wes pays $300 per month HOA dues; his association raises the dues to $325, but Wes continues to pay $300 and the association cashes the checks every*month.* Six months later, they come after Wes, threatening to place a lien on his property unless he pays the $150 difference.* Does the association have any legal recourse to collect the $150?
    I think there is something different going on there with CC&Rs which likely address dues delinquency more specifically.

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