Can I Get My Home Back After an HOA Foreclosure in California?
If you lose your condo or home to an HOA foreclosure in California, you can get it back through redemption.
If you lose your house, condo, or townhome in California because the homeowner's association (HOA) foreclosed on it, you may be able to get it back. California law provides a right of redemption in this situation, which allows you to repurchase the property after an HOA foreclosure sale. Read on to learn about your timeline for redeeming property after an HOA foreclosure in California, the amount you'll have to pay to redeem, and more.
How HOA Liens and Foreclosures Work
If you live in a house, condo, or townhome that is part of a common interest development in California, most likely you are required to pay monthly dues and assessments to a homeowners’ association (HOA). Nearly all HOAs have the ability to place a lien on your property if you fall behind in paying these monthly dues and special assessments (collectively called “assessments”). (Learn more about HOA assessments.)
Once the HOA has a lien on the home, it can foreclose the lien (subject to any state limitations). (Learn more about homeowners’ association liens and how they can be foreclosed in Nolo’s article HOA Liens & Foreclosures: An Overview.)
HOA Foreclosures in California
In California, the HOA cannot start a foreclosure until the delinquent assessments equals or exceeds $1,800 (not including any accelerated assessments, late charges, fees and costs of collection, attorney's fees, or interest) or the assessments secured by the lien are more than 12 months delinquent (Cal. Civ. Code § 1367.4(c)).
The HOA may then foreclose its lien nonjudicially or judicially (Cal. Civ. Code §1367.1). The majority of HOA foreclosures in California are nonjudicial, which means the foreclosure takes place without court supervision. (Learn more about HOA foreclosures in California.)
The Right of Redemption After an HOA Forecloses in California
A redemption period is a specific time period given to homeowners following a foreclosure during which they can buy back, or “redeem,” their property from the entity or person that purchased it at the foreclosure sale. (Learn more about redemption periods.)
California law provides a 90-day right of redemption after the foreclosure sale if the HOA forecloses nonjudicially (Cal. Civ. Code § 1367.4(c)(4), Cal. Code of Civil Proc. §729.035).
Keep in mind that this law applies to HOA foreclosures for nonpayment of assessments only. If a nonjudicial foreclosure occurs because of your default on a deed of trust, you don't get a right to redeem. (Learn more about the difference between mortgages and deeds of trust and foreclosure proceedings in California.)
If the HOA elects to foreclose is judicially (which means the foreclosure goes through the state court system), the redemption period is:
- 90 days (if the proceeds from the foreclosure sale are sufficient to pay off the debt), or
- one year (if the proceeds from the foreclosure sale fall short of the delinquency) (Cal. Code Civ. Proc. §729.030(a) and (b)).
Cost to Redeem
In most states, including California, the homeowner generally must pay the following amounts to redeem the property:
- all past-due assessments
- attorney’s fees and costs, and
- the costs of any repairs (in some cases). (Learn more in Nolo’s article The Right of Redemption Following an HOA Foreclosure.)
California Includes Repair Costs in the Redemption Price
In California, as a general rule, the price that the foreclosed homeowner must pay to redeem the property will include costs for maintenance, upkeep, and repairs so long as the costs were reasonably necessary for the preservation of the property (Barry v. OC Residential Properties, LLC, 194 Cal.App.4th 861 (2011)). This means that if the homeowner chooses to redeem the property, the redeeming homeowner must reimburse the purchaser for those expenses. (Costs for permanent improvements, or improvements that were completed for the purchaser’s comfort or convenience, will not be included in the redemption amount.)
Notice of Right to Redeem
After the foreclosure sale, the levying officer or trustee (the party that manages the foreclosure process) must promptly notify, either personally or by mail, the foreclosed homeowner about his or her right to redeem the property. The notice of the right of redemption must indicate the applicable redemption period (Cal. Code Civ. Proc. §729.050).
An Alternative to Redemption: Take Action Before the HOA Foreclosures
In virtually all instances, it is advised that you take action to get current on any past-due HOA assessments prior to a foreclosure sale or, even better, before the HOA initiates the foreclosure. This way you have more options to save the property, such as paying off the past-due amounts in a lump sum or entering into a payment plan with the HOA to get caught up. (Learn more about possible options to catch up and avoid a foreclosure if you are delinquent in HOA dues.)
Nevertheless, foreclosures by HOAs do occur and redeeming the property after the foreclosure sale may provide you with a way to get your home back if you miss the opportunity to cure the default before the foreclosure is completed.
What to Do if You Are Facing Foreclosure by an HOA
You can consult with a licensed attorney in California to discuss all legal options available in your particular circumstances if you are facing a foreclosure by an HOA. (For more information about HOA foreclosures, see our HOA Foreclosure topic page for articles on HOAs, defenses to an HOA foreclosure, how bankruptcy can help discharge dues, HOA super liens, and more.)