Homeowners or condominium owners who have never bought a property to be assessed annually by a Homeowners Association (HOA) are often surprised at the fact that in many states, the Homeowners Association has the power to foreclose on your property if your assessment dues are not paid. This foreclosure can be a non-judicial one if you, the property owner, are in a common interest development such as a condominium, timeshare, or planned unit development.

However, while an HOA does have the power to place a foreclosure assessment lien on your property, there are certain laws in place in the State of California that restricts their ability to do so. One such restriction is the “right of redemption,” which is a time period following the initiation of the foreclosure assessment lien in which you, the owner, have a right to redeem the property by paying the full amount of what is owed in assessment fees.

To be clear, this right of redemption does not normally exist in non-judicial foreclosures. However, in California, if you are in a common interest development, a 90-day right of redemption does exist if your property has had a foreclosure assessment lien placed against it. This means that if you can make the full payment required on the assessment fees before the 90-day period has ended, you will keep your property and avoid foreclosure on it.

Other restrictions placed on this type of procedure are written in Civil Code section 1367.4, which prohibits an HOA from placing a property in foreclosure if the assessment fees are less than $1,800. If the fees total more than that amount, they must still follow several guidelines, which include the following:

• The HOA must offer to enter into mediation with the owner as a form of alternative dispute resolution (ADR) before placing the property under a foreclosure assessment lien.
• Only the board of directors of the HOA can make the decision to place the property in a foreclosure assessment lien if the assessment fees accrued meet the minimum requirement.
• The board of directors must be personally responsible for informing the owner or occupant that the property will be foreclosed upon, and must serve him or her the proper paperwork for it to be initiated.
• The owner-occupant must be given a 90-day redemption period once the property is slated for a non-judicial foreclosure if the property is part of a planned unit development.