Overview

Few mistakes financially devastate California homeowners faster than refusing to pay disputed HOA assessments. All too often, homeowners refuse to pay their dues or a special assessment because they believe, rightly or wrongly, that the HOA did something illegal to render the assessment invalid, unenforceable, or fundamentally unfair. From the homeowner’s perspective, refusing payment feels logical. But from the perspective of the Davis-Stirling Act, such a decision is anything but logical.

The Davis-Stirling Act doesn’t recognize a homeowner right to offset, meaning that homeowners cannot unilaterally decide to refuse payment of an assessment no matter how illegal that assessment might be. Indeed, homeowners who stop paying disputed assessments frequently trigger a rapidly escalating collection process involving late fees, interest, collection costs, attorneys’ fees, liens, and foreclosure-related consequences. In many situations, the financial damage caused by refusing payment quickly becomes more serious than the original dispute itself.

This Fact Sheet explains what homeowners get wrong when they confuse a valid dispute with a right to stop paying. It also explains the difference between the two types of HOA assessments, what happens once an account becomes delinquent, and how homeowners should challenge disputed assessments without handing the HOA an easy collection case. [After you finish with this Fact Sheet, I suggest reading “The 5 Biggest Mistakes Homeowners Make When Fighting Their California HOAs,”] where I describe the remaining four biggest mistakes that homeowners make in disputes with their HOAs.]

Homeowners do not protect themselves by turning an otherwise valid dispute regarding an assessment into an expensive and complex delinquency problem. They protect themselves by paying first, challenging strategically, documenting the dispute, and using the legal tools available to them under California law. That approach protects the homeowner by preserving their leverage, while refusing to pay gives it away.

Key Points

Many homeowners erroneously assume that if an HOA assessment is unlawful, unfair, retaliatory, improperly adopted, or unsupported by the governing documents, then the homeowner may lawfully refuse to pay it. The error doesn’t rest with any misunderstanding about the underlying dispute. In fact, in many cases, the homeowner is absolutely correct that the HOA acted improperly. The problem is that homeowners confuse having a valid dispute with having a legal right to stop paying assessments. Unfortunately, in the HOA world, that confusion often turns a winnable legal dispute into a losing collection case that the homeowner has no chance of winning.

• Homeowners do not ever have a legal right to withhold disputed HOA assessments. California homeowners frequently assume that if an HOA imposes an illegal assessment, then the homeowner may lawfully stop paying assessments until the dispute gets resolved. California law does not recognize that right. The Davis-Stirling Act does not permit homeowners to unilaterally decide that they will stop paying assessments because they believe that their HOA imposed an illegal special assessment, violated the Davis-Stirling Act, selectively enforced rules, ignored maintenance obligations, retaliated against homeowners, or otherwise abused its authority. It doesn’t matter how right the homeowner is about the HOA’s conduct. Homeowners cannot withhold the payment of dues or special assessments. Period. [The term “assessments” includes both HOA dues and special assessments. Homeowners often use the word “dues” colloquially to describe their regular HOA payments, and that’s accurate. “Dues” and “general assessment” are, however, synonymous. The broader term “assessments” includes both general assessments (i.e., dues) and special assessments.]
  • Many homeowners refuse payment of assessments for reasons that feel morally or emotionally justified. Homeowners who refuse to pay disputed assessments often do so because they’ve asked themselves perfectly logical questions like: (i) “Why should I pay if the HOA violated the law?”; (ii) “Why should I pay if the special assessment was illegal?”; (iii) “Why should I pay if the HOA refuses to repair my property?”; (iv) “Why should I pay if the board selectively enforces the rules?”; (v) “Why should I pay if the HOA is retaliating against me?”; or (vi) “Why should I pay if the board is mishandling our reserve funds?” Those questions are certainly emotionally compelling, and they’re often the very questions that homeowners should be asking themselves. But they do not create a legal right to stop paying assessments.
• Once assessments become delinquent, homeowners hand their HOAs extremely powerful collection rights. Homeowners who refuse to pay assessments, regardless of how valid the underlying reason, hand their HOA boards a set of collection rights that can rapidly escalate into serious financial problems. Specifically, once a homeowner has refused to pay an assessment, the Davis-Stirling Act allows HOAs to add late fees, interest, collection costs, and attorneys’ fees to the balance, while simultaneously proceeding with the recordation of a lien and the initiation of foreclosure. In many cases, the financial exposure of these consequences not only dwarfs the amount of the assessment, but also dilutes the strength of whatever wrongful conduct sparked the dispute in the first place. [If you’re interested in learning more about the steps your HOA has to take before imposing a lien or foreclosing on your property, read my Fact Sheet “HOA Liens and Short Sales: What Must be Paid to Clear Title.”]
• Refusing to pay assessments substantially dilutes otherwise valid legal claims. Homeowners who refuse to pay assessments for the reasons discussed above often believe that their refusal is necessary or warranted to prove a point or impose pressure on their HOA. It isn’t. On the contrary, much of the time, those homeowners who actually have legitimate complaints involving illegal HOA activity or board abuse, end up spending their money and time trying to protect their homes rather than ending the wrongful practices that formed the basis of their dispute. In other words, refusing to pay assessments damages the homeowner’s strategic position while simultaneously making the dispute substantially more expensive to resolve.
• The proper strategy is to pay first and challenge strategically afterward. Homeowners protect themselves by continuing to comply with assessment obligations while simultaneously documenting the dispute, preserving evidence, creating a written paper trail, demanding records where appropriate, participating in IDR or ADR where required, and challenging unlawful HOA conduct through proper legal channels. That approach preserves leverage and prevents the homeowner from handing the HOA an easy collection case, or even worse, their home. [I wrote a Fact Sheet that you might be interested in about challenging illegal special assessments titled, “California HOA Special Assessments: What They Are, When They’re Legal, and How Homeowners Can Challenge Them.”]
• Homeowners should speak with the experienced California HOA attorneys at MBK Chapman instead of refusing to pay disputed assessments. The HOA attorneys at MBK Chapman are the most respected homeowner-side HOA attorneys in California for an excellent reason. We are highly trained to evaluate whether your HOA broke the law or violated your rights, identify available legal remedies, and help you challenge disputed assessments without financially destroying your own position. If your HOA imposed disputed assessments, threatened collections, recorded liens, or escalated enforcement efforts, call us at MBK Chapman.

Homeowners do not improve their position by turning an assessment dispute into a collection dispute. They improve their position by staying strategic, informed, documented, and disciplined while challenging the HOA through lawful procedures. Refusing to pay disputed assessments frequently creates financial exposure far more dangerous than the underlying HOA dispute itself.

FAQs

About Michael Kushner

Michael Kushner is a California attorney with over 30 years of experience representing homeowners in disputes with their HOAs. He is widely regarded as California’s leading homeowner-side HOA attorney, and has built one of the state’s most prominent law practices dedicated to holding HOAs accountable under the Davis-Stirling Act and California law.

In addition to his law firm’s work, Michael is a recognized lecturer, author, and the host of the hit HOA HELL podcast, where he provides homeowners living in HOA-governed communities with clear, practical strategies for dealing with bad HOAs. He’s also the author of the best-selling book, HOA HELL | California Homeowners’ Definitive Guide to Beating Bad HOAs, which has become a go-to resource for both homeowners seeking real-world solutions to their HOA disputes, as well as those good HOA board members who are interested in doing a good job.

About MBK Chapman Fact Sheets

Homeowners searching for answers online will often come across articles that appear authoritative, but are actually written as search-engine marketing content rather than by an experienced HOA lawyer. These pieces tend to prioritize keyword density over clarity, accuracy, or legal context, which often leaves homeowners more confused than informed.

At MBK Chapman, our Fact Sheets are part of our HOA Law Library and are written by Michael Kushner, an HOA lawyer with decades of hands-on experience representing California homeowners. In fact, Michael Kushner is the HOA lawyer who pioneered the systems and strategies used by some of California’s most successful homeowner-side HOA law firms.

Each Fact Sheet is deliberately concise, statute-based, and designed as a quick-reference guide to help homeowners understand key HOA laws and enforcement rules at a glance.

AND DON’T FORGET TO TUNE INTO MY PODCAST, HOA HELL

YOU CAN ALSO ORDER MY GROUNDBREAKING BOOK

HOA HELL | California Homeowners’ Definitive Guide to Beating Bad HOAs

Amazon  |  Barnes & Noble