Homeowner Association Foreclosing
If you are delinquent on your Home Owner Association (also known as HOA) dues in California, the HOA must first offer you a chance to participate in dispute resolution. If you do not want to participate in dispute resolution, or if you are unable to reach an agreement with the HOA, the HOA can then record a lien on your property. The HOA must mail a notice of the lien to all record owners within ten days of recording the lien.
Here are some things to keep in mind if you are facing an HOA lien in California:
- You have the right to participate in dispute resolution with the HOA. This is an option if you believe that the HOA is mistaken about the amount of money you owe. You must provide written evidence in the form of cancelled checks you paid, credit card statements you paid, letters from HOA regarding monthly assessments, HOA legal fees, all correspondence. Create an excel sheet to show amounts due verses monthly payments. It might be useful to provide this information if lengthy a week before the meeting. Understand the HOA does not have to play Let's Make a Deal. You can have an attorney present.
- You can also request to meet with the HOA board to discuss a payment plan. This may be a decent option if you are unable to pay the full amount of the lien immediately.
- If the HOA records a lien on your property, you will be responsible for paying the costs of recording the lien, legal costs, and interest. The amount will increase.
- The HOA can foreclose on your property if you do not pay the lien. Foreclosure can result in the loss of your home.
Before recording The HOA lien for delinquent assessments, the association has to offer and participate in dispute resolution under the association's "meet and confer" program. This does not mean they have to settle or accept any partial payments. They are just required to talk with you. (Cal. Civ. Code §§ 5900 to 5920, § 5660(e).) Under California law, you may also submit a request to meet with the board to discuss a payment plan. (Cal. Civ. Code § 5665.)
If you come up with a written agreement to catch up on the amounts due, the HOA records a lien on your property. (Cal. Civ. Code § 5675.) A notice must be mailed to all record owners no later than ten calendar days after recording. (Cal. Civ. Code § 5675(e).) This lien has to be paid if you sell or refinance. It grows with time.
The HOA can do a judicial or non judicial foreclosure. In California this is typically non judicial and faster. With a nonjudicial process, the foreclosure is subject to a 90-day right of redemption after the sale. (Cal. Civ. Code § 5715.) To redeem the property, you must pay all assessments in full, interest, attorneys' fees, and possibly the costs of repair. Order payoff and provide lump sum cashier's check or cash to the county recorder/accounting weekdays before the deadline. They are not open on weekends and holidays. (See case Barry v. OC Residential Properties, LLC, 194 Cal.App.4th 861 (2011).) https://casetext.com/case/barry-v-oc-residential-properties
With a judicial foreclosure the redemption period is: ninety days if the sale proceeds are sufficient to satisfy the debt (sale of property and costs exceeds the amounts owed). Or a year from sale closing date if the proceeds from the sale are insufficient to satisfy the delinquency. (Cal. Code Civ. Proc. § 729.030(a),(b).)
Your mortgage company might not be paid off. The HOA is in front of the mortgage even though they may have subordinated for you to get your loan.
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