One Action Rule

California has a "One Action Rule" sometimes referred to as the "Single Action Rule" which requires the holder of a claim secured by real property to proceed against the property before pursuing the debtor personally. When an HOA records a lien it becomes the holder of a claim secured by real property. However, there is an express waiver of the "One Action Rule" also called "the Security First Rule" in the Davis-Stirling Act.

Consequently, an HOA can pursue the debtor personally even if it has recorded an assessment lien.

There are three potential legal remedies for the collection of delinquent assessments:

  1. Foreclose judicially,
  2. Foreclose non-judicially (a trustee sale), or
  3. File suit against the homeowner for a money judgment.

Given the exception set forth above, HOAs can start more than one collection action. However, the board must ultimately select one remedy. For example, HOAs can file a lien against a unit and initiate foreclosure while simultaneously filing a lawsuit to recover unpaid assessments. However, at some point the HOA must select one remedy. If the foreclosure results in a sale, the association must dismiss its lawsuit. Alternatively, if the lawsuit results in a judgment, the association must stop the foreclosure action.

If an HOA decides to foreclose but also wants a deficiency judgment, it must pursue a judicial foreclosure rather than a non-judicial foreclosure. Boards should always consult with legal counsel to help them determine the best course of action to follow.

Bankruptcy of a Unit Owner


Pacific Association Collections