The nonjudicial foreclosure of an assessment lien must be conducted in accordance with the procedural requirements contained in Civil Code Sections 2924, 2924b, and 2924c applicable to the exercise of powers of sale in mortgages and deeds of trust. (Civ. Code § 5710(a).) One of those procedural requirements involves the recording of a Notice of Default in the office of the county recorder where the property encumbered by the assessment lien is situated (the “Subject Property”). (Civ. Code § 2924(a)(1).)
Contents of Notice of Default
The required contents of the Notice of Default generally include information identifying the address of the Subject Property, a statement that the owner of the Subject Property has breached his/her obligation to pay assessments to the association, and a statement of the association’s information and its election to sell the property via the nonjudicial foreclosure action. (Civ. Code § 2924(a)(1).) The Notice of Default must also begin with the statement required under Civil Code Section 2924c(b) which, in sum, informs the owner of the following facts:
- The potential for the Subject Property to be sold without court action;
- The owner’s right to halt the nonjudicial foreclosure action by paying the amounts owed; and
- The potential for the owner to lose legal rights if he/she does not take prompt action. (See Civ. Code § 2924c(b).)
Service of Notice of Default
The association must serve the Notice of Default on the owner in accordance with the manner of service of summons in Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure. (Civ. Code § 5710(b).) This essentially mirrors the service requirements applicable to the filing of lawsuits. Additionally, within certain timeframes, a copy of the Notice of Default must be mailed to specified persons having a legal interest in the Subject Property or otherwise having a right to be provided with a copy of the Notice of Default. (Civ. Code §2924b(b)-(c).)
Board Decision to Initiate Foreclosure
Prior to recording the Notice of Default, the owner must be provided with notice of the board’s decision to initiate nonjudicial foreclosure. (Civ. Code § 5705(d); See also “Decision to Initiate Foreclosure.”)
- Civil Code Section 2924f. Notice of Trustee Sale.
- Civil Code Section 2924c. Notice of Default; Trustee’s Fees.
- Civil Code Section 2924b. Request for Notice of Default and Sale.
- Civil Code Section 2924. Power of Sale Foreclosure.
- Civil Code Section 5710. Assessment Lien Foreclosure Procedure; Trustee’s Fees.
- Civil Code Section 5705. Decision to Foreclose Assessment Lien.
Related Case Law
- Diamond v. Superior Court
(2013) 217 Cal.App.4th 1172
[Assessment Collection; Notice Requirements] A HOA must strictly adhere to the statutory lien and foreclosure notice requirements in order to perfect an assessment lien and foreclose on a homeowner’s property.