Federal laws provide some protections to owners in the military, including owners entering, military service, those in service in Colorado, those called to active duty and those deployed.  Members of the military reserve are covered on the date they receive active duty orders.

What are the limitations?

There are several limitations:

  • The Association must tell the Court if an owner is in the military.
  • An attorney for the military owner must be appointed by the court.
  • The Association may be required to pay the attorney fees of this appointed attorney.
  • The appointed attorney must be able to locate the military owner.  
  • If they cannot be located, no rights of the military owner are lost.
  • If the military owner is served with the Association’s collection lawsuit and does not respond, the court is required to suspend the lawsuit for at least 90 days.  
    • This suspension is required, if the appointed attorney cannot locate the military owner, if the appointed attorney requests the suspension, or if the Court determines the military owner has a defense and the defense requires the owner’s presence.
  • A judgment against a military owner may be set aside if it occurs during military service or within 90 days after release from military service.  
    • The court which entered the judgment must set it aside, if the military owner did not appear, the military owner’s service materially affected their ability to defend the lawsuit, and the military owner has a legal defense to all or part of the lawsuit.
  • Federal law also allows a military owner to reduce the interest rate to 6% per annum for assessments accrued prior to military service.  
    • To obtain this interest reduction, the military owner must provide written notice to the Association along with a copy of their military orders.


What is the purpose of these limitations?

The purpose of these limitations is to allow owners who are in military service to devote their energy to the defense of the country through temporary suspension of the lawsuit.

What should Associations do to collect past due assessments from owners in the military?

Owner associations can (and should) be proactive in protecting the interests of their members against delinquent owners who are in the military.  The following action should be taken:

  • File a notice of assessment lien.  In the event the property is sold or refinanced, the lien would be satisfied.  
  • The association should follow the published procedures set out in the association’s Collection Policy.  
  • If the association’s collection attorney determines that the delinquent owner is protected, all options should be reviewed to determine the best course of action.  
  • If the decision is made to file a county court lawsuit and the Summons is successfully served, more often than not, the military owner will contact the Association’s attorneys to attempt to resolve the account.  
    • In that event, the provisions of the Act would be unlikely to have impact on the proceedings.  Remember—the Act is intended to provide safeguards for military owners unable to assert their rights.  
  • If the matter remains unresolved and there is no communication with the military owner, the court will be required to appoint an attorney to represent the homeowner.  
    • The attorney’s first action will be to request a 90-day Stay of Proceedings which the court is required to grant.  
    • Next, the attorney will attempt to contact the defendant and ascertain their status as well as any meritorious defense there may be to the claim.  
    • Finally, the attorney will submit a report to the court with findings and any requests.  
    • Based on the information in the report, the court will either lift the Stay or continue the matter indefinitely.  In the event the stay is lifted, the association would be free to seek a default judgment at that time.


Summary

The Service Members Civil Relief Act does create procedural hurdles for the association when it attempts to collect delinquent assessments from a military owner.  Additionally, the Act carries significant criminal penalties so it cannot be ignored.  Nevertheless, the association can protect its interests against a delinquent military owner by following the procedures set forth in its Collection Policy, in consultation with the association’s collection attorney.

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