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Can a homeowner pay an assessment under protest?

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Question: I have tried to make payments under protest to my homeowner association, but my board will not allow it. It said that paying an assessment by check under protest is not in the law. It refuses to accept checks for assessments if there is anything written in the memo section on the check. Is this right?

Answer: No, it is not right. If a dispute exists regarding a particular payment, you are entitled to dispute the charge even after you make the payment and whether or not you write something in the check’s memo section.

There is no authority for your association to refuse payment even though specifics of writing the words “under protest” are not covered by the law. Whether or not you write the words “under protest” on the payment instrument does not change the fact that you are protesting the payment, especially if you properly document the dispute.

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Also, simply protesting a charge does nothing to resolve the dispute.

Civil Code section 5658(a) states that if a dispute exists between the titleholder and the association regarding any charge or sum levied by the association that does not exceed the jurisdictional limits of the small claims court, the titleholder may pay what’s owed under protest and file an action in small claims court.

If you disagree with imposed charges, you must take steps to challenge those charges, making certain to document the dispute along the way. Before filing in small claims court on your protest, make attempts to use the association’s administrative remedies. Eventually, you may be forced to file a lawsuit to preserve your rights.

While there may be no authority for the association to refuse payments by check with memos, there may be no advantage to you to add this issue to your dispute. If you document your dispute in writing to the board, outside of the context of your payment, you do not waive your rights to challenge the charges.

Handling the matter this way also serves to cover payments made by electronic funds transfer or by direct deposit to a checking or savings account through an account clearinghouse.

Titleholders also may pursue alternative dispute resolution in addition to statutory remedies. Under Civil Code section 5925, “alternative dispute resolution” means mediation, arbitration, conciliation or other nonjudicial procedure involving a neutral party in the decision-making process.

With voluntary consent of the parties, the form of alternative dispute resolution chosen may be binding or nonbinding.

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Parameters for assessment debt and delinquency are delineated under Civil Code section 5650, as is the time of delinquency and allowable interest charges.

The key here is to be consistent and thorough in documenting your written protest to the board, thus preserving your rights.

Zachary Levine, a partner at Wolk & Levine, a business and intellectual property law firm, co-wrote this column. Vanitzian is an arbitrator and mediator. Send questions to Donie Vanitzian, JD, P.O. Box 10490, Marina del Rey, CA 90295 or noexit@mindspring.com.

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