Beware cashing check marked 'payment in full': "In some circumstances, without contacting the association, owners simply will remit a payment for a past-due balance with the words 'payment in full' written on the check as their own way of offering a settlement to resolve the account balance.
If the association receives a check from the homeowner that reads 'payment in full,' the association should not cash the check unless it intends for the amount of the check to wipe out the entire balance owed to date. If the check is cashed, it is equivalent to accepting the owner's settlement offer.
The Uniform Commercial Code makes it clear that if a party accepts a payment that is clearly submitted as full satisfaction of the debt, the party has released the debt.
Further, a letter or other document stating that an enclosed check is remitted for payment in full has the same effect as if 'payment in full' were written on the check itself."
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Attorney Curtis Ekmark offers a word of advice that can be equally valuable to associations and delinquent owners alike...
1 comment:
Whether valuable to an association, a "delinquent owner" or an owner (owner in Arizona, Ekmark & Ekmark LLC's domicile) disputing his/her association's statement/invoice, may find the following restrictive endorsement and transmittal letter (Notice to the association) valuable:
Restrictive Endorsement: (place above check’s “Do Not Write, Stamp or Sign Below This Line”)
Payment in full and full release
of any and all claims re Account
No, xxx invoice dated 04/01/09.
Transmittal Letter: (with payment enclosed)
Date
Xxxxxxxx Xxxxx(association)
Xxxxx xxxxxxxx xxxxxx xxx
Xxxxxxxxxxx, xxxxxxxxx xxxxx
Re: Account No. xxxx
To whom it may concern:
Enclosed find Xxxxxxxxxxxx Xxxxxxxxxx check number xxxx in the amount of one hundred dollars ($100.00) payable to Xxxxxxxxx Xxxxxxx Xxxx, Inc., Account No. xxxx.
The debt evidenced by the enclosed Statement (Invoice), Xxxxxxxxx Xxxxxxx Xxxx, Inc., dated 04/01/2009 is disputed and this payment is made under protest.
Nothing in this letter or its payment in full should be construed as a release of any claims we may have against Xxxxxxxxx Xxxxxxx Xxxx, Inc., its board of directors, officers and/or agents.
Xxxxxxxxx Xxxxxxxx (owner)
Arizona owners may find A.R.S. § 47-3311 (Uniform Commercial Code), Accord and satisfaction by use of instrument, valuable.
Owners in other states should consult their states' Uniform Commercial Code statute (negotiable instruments, enforcement of instruments, accord and satisfaction by use of instrument) or other applicable, and equally valuable, statute.
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