Assignment of Rents

An Assignment of Rents is a document or provision in a document, that is used by HOA assessment collection companies and mortgage lenders to collect money that is owed, in situations where the property is leased to a tenant. Our focus will be on the collection of delinquent homeowner association fees and costs of collection. Section 2938 of the California Civil Code addresses the subject of Assignment of Rents.

Under the law, the associations, acting through the assessment collection company, makes. a written demand on the tenant. The demand requires the tenant to turn over all future payments to the association until such time as the assessments are paid current.

As a practical matter, once the delinquent owner is made aware that his or her tenant will be contacted and required to pay the association directly, the delinquent owner nearly always pays what is owed immediately including all late fees and collection costs.

In order for an owner's association collection company to utilize this powerful remedy, the CC&Rs of the association must contain language authorizing the remedy.

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