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In California, homeowners' associations are feeling the pain of the foreclosure crisis. These groups collect monthly dues from members. But the rise in foreclosures means millions of dollars in dues are going unpaid, which leaves remaining homeowners to pick up the tab. Rachael Myrow of member station KQED has more.

RACHAEL MYROW: Contra Loma Estates lies about an hour's drive northeast of San Francisco. The condos, nestled along curvaceous tree-lined streets, exhibit no obvious signs of stress. But there's stress here. Gene Bicksler, owner of the firm that manages the Contra Loma Homeowners Association, gives us a little history.

Mr. GENE BICKSLER (Real Estate Manager): Two or three years ago, the homes were selling here for 200,000, maybe as much as 300,000. The prices varied. But they've crashed. Today in 2008, you can buy the same home for 55,000.

MYROW: In 30 years, Bicksler says, he's never seen anything like the silent wave of insolvency that's swamped the 328 homes of Contra Loma.

How many units have foreclosed in this complex?

Mr. BICKSLER: In the last two years, about 70.

MYROW: And I take it there are some more you're expecting on the way?

Mr. BICKSLER: It's hard to know, but it could be another 70 before it ends.

MYROW: What is that? Forty percent of the units here?

Mr. BICKSLER: Yes, that's right. To date that represents about $500,000 in lost income to the neighborhood, to this group of owners.

MYROW: Bicksler hasn't heard of any associations going bankrupt, but nobody tracks that statistic. The more likely scenario is the board of the association just raises the dues.

Mr. BICKSLER: In the beginning, we spent our savings so that we didn't have to reduce services or increase assessments.

MYROW: But Contra Loma eventually burned through its reserves, and the dues went up from 320 to 350 a month. That money pays for everything from garbage collection to liability insurance. But 350 a month?

Ms. ANDREA JORDAN(ph): What it is now is high, I think. And so do all my neighbors.

MYROW: Homeowner Andrea Jordan is retired and living on a fixed income. She'd like to see some maintenance slide a bit before the HOA raises dues again.

Ms. JORDAN: There comes a time where I just can't pay all the expenses. I mean, I have to really budget to be able to afford everything that I want. It's too much for the people who are living here.

MYROW: Contra Loma has cut back, but there's a limit to the savings that can be wrung out of deferred maintenance. Association boards are bound by law to protect against systemic neglect. Again, Gene Bicksler.

Mr. BICKSLER: They're given some leeway. Do they paint the building this year or in three years? But they are required to paint it and to maintain it.

MYROW: Contra Loma could use small claims court to go after people who disappear leaving unpaid dues for Jordan and her neighbors to pick up. But many associations discover belatedly they can't do much of a search for individuals without key information like Social Security or driver's license numbers. CPA Don Heiney(ph) does billing, budgets, taxes, and lately a lot of collections work for about 70 associations throughout California. He adds, banks are supposed to pay monthly dues once they take over a foreclosed property, but sometimes they drag their feet.

Mr. DON HEINEY (Accountant): We've in fact had to file liens and process foreclosure actions against the banks for their failure to pay the assessments. They want to wait until they resell the unit to clean all that up, and the association needs the money now.

MYROW: Laws vary from state to state, but more than 20 require banks to pay up to six months of unpaid dues. Not in California. Heiney hopes that'll change in the next legislative year. For NPR News, I'm Rachael Myrow.

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