COLLECTION

REVISION DATE: 11/21/02

PURPOSE

To adopt a policy which addresses the collection of the annual and special assessments as authorized by the governing documents for the Pineloch Community Association, Inc. and the Texas Property Code.

SCOPE

This policy applies to all members of the Pineloch Community Association, Inc. and all Lots which are subject to the Declaration of Covenants, Conditions and Restrictions for Bay Glen, Section One, a Subdivision in Harris County, Texas and any Amendments thereto (hereinafter sometimes "Pineloch Declarations")

REFERENCE(S)

The Pineloch Declarations
The Pineloch Community Association, Inc. Bylaws.
The Articles of Incorporation for Pineloch Community Association, Inc.
And all other governing documents for Pineloch Community Association, Inc, including but not limited to any published rules, regulations, guidelines, and resolutions. Texas Property Code Chapter 209 -- Residential Property Owner's Protection Act

POLICY

It is the policy of the Association to initially rely upon the voluntary compliance of all members with their obligation under the Declaration of Covenants to pay annual and special assessments.

If reliance upon voluntary compliance is not successful, the Association will direct the Management Company to mail notice of delinquency to any member in arrears and to exert reasonable efforts and take reasonable actions for the collection of delinquent assessments. Owners shall be denied use of the amenities if they fail to pay the assessments. The Management Company may charge a reasonable collection fee for its efforts.

In the event that reasonable efforts of the management company for the collection of delinquent assessments do not result in payment by the member, the matter will be referred to outside legal counsel. As an initial step, outside legal counsel shall write a demand letter for the payment of the delinquent assessment, accrued interest, collections costs, and attorney's fees incurred to date. The demand letter will set a reasonable deadline for compliance. If the member fails to comply by the stated deadline, the Association will take whatever legal actions as are appropriate to collect all amounts due, including but not limited to the initiation of foreclosure proceedings. Foreclosure proceedings shall not be maintained if the debt securing the lien consists solely of fines assessed by the Association or attorney's fees incurred by the Association solely associated with fines assessed by the Association.

In the event that a member's lot is sold at a foreclosure sale, the Association must, not later than the 30th day after the date of the foreclosure sale send a written notice, by certified mail, return receipt requested to the member's last known mailing address, stating the date and time the sale occurred and informing the lot owner of the owner's right to redeem the property. No later than the 30th day after the date the Association sends the notice of foreclosure sale, the Association must record an affidavit in the real property records of Harris County, stating the date on which the notice was sent and containing a legal description of the lot. This notice requirement also applies to the sale of a member's lot by sheriff or constable.

If a member's property has been disposed of by foreclosure sale, the Association, if it is the purchaser of occupied property at a sale foreclosing a property owners' association's assessment lien, must commence and prosecute a forcible entry and detainer action to recover possession of the property. The owner of the property may redeem the property from any purchaser as a sale foreclosing the Association's assessment lien not later than the 180th day after the date the Association mails written notice of the foreclosure sale. During this period, the Association, if it is the purchaser, may not transfer ownership of the property to a person other than a redeeming lot owner during the redemption period.

If a member wishes to redeem his/her property he/she must pay the Association the total amounts due the Association at the time of the foreclosure sale and:

a. interest from the date of foreclosure to the date of redemption on all amounts owed the Association at a rate of 10 percent;
b. costs incurred by the Association in foreclosing the lien and conveying the property to the redeeming lot owner, including reasonable attorney's fees;
c. any assessment levied against the property by the Association after the date of foreclosure;
d. any reasonable costs incurred by the Association, including mortgage payments and costs of repair, maintenance, and leasing of the property; and
e. the purchase price paid by the Association at the foreclosure sale less any amounts due the Association satisfied out of foreclosure sale proceedings.

To redeem property purchased at the foreclosure sale by a person other than the property owners' Association, the lot owner:

a. must pay to the Association:

(1) all amounts due the Association at the time of the foreclosure sale less the foreclosure sales price received by the Association from the purchaser;
(2) interest from the date of the foreclosure sale through the date of redemption on all amounts owed the Association at the rate stated in the dedicatory instruments for delinquent assessments or, if no rate is stated, at an annual interest rate of 10 percent;
(3) costs incurred by the Association in foreclosing the lien and conveying the property to the redeeming lot owner, including reasonable attorney's fees;
(4) any unpaid assessments levied against the property by the Association after the date of the foreclosure sale; and
(5) taxable costs incurred in a proceeding brought under Paragraph 5; and

b. must pay to the person who purchased the property at the foreclosure sale:

(1) any assessments levied against the property by the Association after the date of the foreclosure sale and paid by the purchaser;
(2) the purchase price paid by the purchaser at the foreclosure sale;
(3) the amount of the deed recording fee;
(4) the amount paid by the purchaser as ad valorem taxes, penalties, and interest on the property after the date of the foreclosure sale; and
(5) taxable costs incurred in a proceeding brought under Paragraph 5

If a lot owner redeems the property under this policy, the Association, if it is the purchaser of the property at foreclosure, shall immediately execute and deliver to the owner a deed transferring the property to the redeeming lot owner. If the Association fails to comply with this section, the lot owner may file a cause of action against the Association and may recover reasonable attorney's fees from the Association if the lot owner is the prevailing party in the action.

If, before the expiration of the redemption period, the redeeming lot owner fails to record the deed from the Association, if it is the purchaser, or fails to record an affidavit stating that the lot owner has redeemed the property, the lot owner's right of redemption as against a bona fide purchaser or lender for value expires after the redemption period.

The Association, if it is the purchaser of the property at the foreclosure sale, or an individual if the Association transferred the property to that individual, may presume conclusively that the lot owner did not redeem the property unless the lot owner files in the real property records of the county in which the property is located:

a. a deed from the purchaser of the property at the foreclosure sale; or
b. an affidavit that:

(1) states that the lot owner has redeemed the property; and
(2) contains a legal description of the property.

If the Association purchases the property at foreclosure, all rent and other income collected by the Association from the date of the foreclosure sale to the date of redemption shall be credited toward the amount owed the Association under Paragraph 6, and if there are excess proceeds, they shall be refunded to the lot owner. If a person other than the Association purchases the property at foreclosure, all rent and other income collected by the purchaser from the date of the foreclosure sale to the date of redemption shall be credited toward the amount owed the purchaser under Paragraph 6, and if there are excess proceeds, those proceeds shall be refunded to the lot owner.

If a person other than the property owners' association is the purchaser at the foreclosure sale, before executing a deed transferring the property to the redeeming lot owner, the purchaser shall obtain an affidavit from the association or its authorized agent stating that all amounts owed the Association under Paragraph 7 have been paid. The Association shall provide the purchaser with the affidavit not later than the 10th day after the date the Association receives all amounts owed to the Association under Paragraph 7. Failure of a purchaser to comply with this paragraph does not affect the validity of redemption by a redeeming lot owner.

Property that is redeemed remains subject to all liens and encumbrances on the property before foreclosure. Any lease entered into by the purchaser of property at a sale foreclosing an assessment lien of a property owners' Association is subject to the right of redemption provided by this section and the lot owner's right to reoccupy the property immediately after the redemption.

If a lot owner makes partial payment of amounts due the Association at any time before the redemption period expires but fails to pay all amounts necessary to redeem the property before the redemption period expires, the Association shall refund any partial payments to the lot owner by mailing payment to the owner's last known address as shown in the Association's records not later than the 30th day after the expiration date of the redemption period.

If a lot owner sends by certified mail, return receipt requested, a written request to redeem the property on or before the last day of the redemption period, the lot owner's right of redemption is extended until the 10th day after the date the Association and any third party foreclosure purchaser provides written notice to the lot owner of the amounts that must be paid to redeem the property.

After the redemption period and any extended redemption period provided by Paragraph 15 expires, the Association or third party foreclosure purchaser shall record an affidavit in the real property records of the county in which the property is located stating that the lot owner did not redeem the property during the redemption period or any extended redemption period.

The Association or the person who purchased the property at the foreclosure sale may file an affidavit in the real property records of the county in which the property is located that states the date the citation was served in a suit under Paragraph 5 and contains a legal description of the property. Any person may rely conclusively on the information contained in the affidavit.

The rights of a lot owner under this policy also apply if the sale of the lot owner's property is conducted by a constable or sheriff as provided by a judgment obtained by the property owners' Association.

Comments and questions about the Pineloch Community Association may be emailed to the Management Company at CMSI.
Comments and questions about the PCA web site may be emailed to the site curator at . (NOTE: Be sure to put "PINELOCH" or "PCA" in the message subject line, so my spam filter doesn't kill it before I see it!)

a.	interest from the date of foreclosure to the date of redemption on all amounts owed the Association at a rate of 10 percent;
b.	costs incurred by the Association in foreclosing the lien and conveying the property to the redeeming lot owner, including reasonable attorney's fees;
c.	any assessment levied against the property by the Association after the date of foreclosure;
d.	any reasonable costs incurred by the Association, including mortgage payments and costs of repair, maintenance, and leasing of the property; and
e.	the purchase price paid by the Association at the foreclosure sale less any amounts due the Association satisfied out of foreclosure sale proceedings.