If you lose your home in California because the homeowners' 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.
If you live in a home 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.)
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 § 5720).
The HOA may then foreclose its lien nonjudicially or judicially. 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.)
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 § 5715, 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:
In most states, including California, the homeowner generally must pay the following amounts to redeem the property:
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.)
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).
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.
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.)