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California HOAs have the authority to foreclose on a member’s property for unpaid assessments — a power most homeowners don’t realize exists and that HOA boards sometimes use aggressively. California law has imposed significant restrictions on HOA foreclosure authority since 2012, but those restrictions have limits. Understanding exactly when an HOA can foreclose, and what safeguards exist, is essential knowledge for any homeowner facing assessment delinquency.
The Restrictions on HOA Non-Judicial Foreclosure
California Civil Code Section 5720 restricts HOA non-judicial foreclosure (the faster, cheaper foreclosure process that doesn’t require court involvement) in several important ways. An HOA cannot initiate non-judicial foreclosure unless the delinquent assessments exceed $1,800 or the assessments have been delinquent for more than 12 months. The association must meet with the owner (if the owner requests a meeting) before initiating foreclosure. The board must make a decision to foreclose by a majority vote at an open board meeting. And the association must send a final pre-foreclosure notice to the owner.
Judicial Foreclosure as an Alternative
For smaller amounts — below the $1,800 threshold — the HOA can only pursue judicial foreclosure, which requires filing a lawsuit in superior court. Judicial foreclosure is slower, more expensive for the association, and provides the homeowner with a right of redemption after the sale. For strategic reasons, many HOAs with small assessment delinquencies choose not to pursue judicial foreclosure because the cost exceeds the recovery. If your delinquency is below $1,800 and has been outstanding for less than 12 months, your immediate foreclosure risk is low — though the lien and accumulating interest and penalties remain.
The Defense Opportunities
HOA foreclosures are legally defective surprisingly often. Procedural defects in the pre-lien notice, the lien recording, the pre-foreclosure board vote, or the foreclosure notice itself can halt the foreclosure and require the association to start over. If you receive an HOA foreclosure notice, have an attorney review the entire procedural history — from the first delinquency notice through the lien recording and foreclosure initiation — for compliance with Davis-Stirling’s specific requirements. A single significant procedural defect can void the foreclosure.
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