HOA Foreclosure Question

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Submitted by nin_sis on January 30, 2008 - 12:02pm

I know foreclosures of rentals has been covered before as I did a search before asking this question. The owner of the house we are renting hasn't paid his HOA dues for over a year and we've been receiving notices from the HOA attorneys that they have put a tax lien on the property. The latest notice stated that they would foreclose on the property within 30 days (mid-February) unless all back dues and fees are paid. When an HOA forecloses on a property, do we as renters have any rights? Is our lease null and void (lease ends on April 30)? Also, since we aren't sure they've defaulted on their loan with the bank, is this a totally different type of foreclosure process than the time frame SD Realtor wrote about last month in response to temeculaguys question? We are contacting the owner to see what is going on from his end. Any suggestions or comments would be greatly appreciated.

Submitted by Raybyrnes on January 30, 2008 - 12:51pm.

Why not find out what the unpaid lien is for and see if you can't make a claim to the property by buying out the lien? If the borrower had money down and there is equity this might be opportunistic. More than like this is not going to be the case but it might be worth a littel bit of time.

Submitted by La Jolla Renter on January 30, 2008 - 5:39pm.

Raybyrnes, very aggressive... I like it!

Loan to own!!! as the say.

I can't imagine this deal having the equity to cover the effort and risk, but worth a look.

Submitted by SD Realtor on January 30, 2008 - 7:18pm.

Aggressive but not smart. You do not buy such subordinate positions. All that will happen someday is that the home gets foreclosed on and you lose. That is why if you buy liens you go for tax liens.

SD Realtor

Submitted by Raybyrnes on January 30, 2008 - 7:34pm.

SD Realtor

I qualified myself on this SD Realtor and said it might be worth a little bit of time. You may well be right that there are some pitfalls you would need to identify before doing anything.

Submitted by SD Realtor on January 30, 2008 - 8:17pm.

nin_sis -

This is a different foreclosure process. I have never been involved in tax lien sales before. A few years back I was going to invest in tax liens but never pursued it. As an investment vehicle tax liens in California suck but in other states that I looked at there was some potential opportunity. Anyways, tax liens are even higher then lenders liens on the property. Admittedly I do not know of the process of what happens when an HOA forecloses on a property. I am puzzled though that the HOA attorneys have somehow put a tax lien on the property but I am a pup when it comes to those issues so however that was done, I guess it was done.

As far as your rights go, you may be able to stave off the inevitable. Make no mistake though, eventually you will be out one way or another.

have SD Realtor

Submitted by SD Realtor on January 30, 2008 - 8:18pm.

Sorry Ray, I didn't read it thoroughly. Good call.

SD Realtor

Submitted by nin_sis on January 31, 2008 - 2:34pm.

Thanks for the comments! I guess we'll just have to wait and see what happens next. This is the third rental we've been "pushed" out of in the past 5 years. I'm getting tired of all these irresponsible owners and am definitely ready to buy (our other two places were put on the market because the owners needed to sell for financial reasons...totally unpleasant experience for a renter). There is a tax lien on the property due to the unpaid HOA fees and like I mentioned, they total about 1.5 years worth. The attorney's letter mentioned the foreclosure process by the HOA would be initiated next month and that this was the last warning letter to be sent to the owner and occupant. I just wanted to know how much time we really had in reality before we started looking for another place or jump into the market. Thanks again!

Submitted by mycroft on January 31, 2008 - 9:47pm.

As far as I know, only a government entity can put a tax lien on property - county for unpaid property tax, the state and feds for unpaid income taxes. I imagine what the HOA is doing is starting to foreclose its HOA lien, which it has by virture of unpaid fees. In California, this foreclosure is essentially like any other trustee sale. Once a notice of default is filed, the owner has 3 months to bring them current. After 3 months, a Notice of Sale is filed, and the sale can be held 21 days later. The sale may be held on the originally scheduled date, or may be cancelled if the owner pays the past due in full before the sale date. If the owner makes arrangements with the HOA to make payments on the past due, they may postpone it from month to month.

Check the owner's name in the grantor-grantee index at the county to see if a notice of default has been filed. If it has, you'll have about 4 months from the date it was filed.

Submitted by bearishgurl on February 16, 2011 - 12:08pm.

mycroft wrote:
As far as I know, only a government entity can put a tax lien on property - county for unpaid property tax, the state and feds for unpaid income taxes. I imagine what the HOA is doing is starting to foreclose its HOA lien, which it has by virture of unpaid fees. In California, this foreclosure is essentially like any other trustee sale. Once a notice of default is filed, the owner has 3 months to bring them current. After 3 months, a Notice of Sale is filed, and the sale can be held 21 days later. The sale may be held on the originally scheduled date, or may be cancelled if the owner pays the past due in full before the sale date. If the owner makes arrangements with the HOA to make payments on the past due, they may postpone it from month to month.

Check the owner's name in the grantor-grantee index at the county to see if a notice of default has been filed. If it has, you'll have about 4 months from the date it was filed.

nin_sis, mycroft's post is the only post that is correct here. A foreclosure of an HOA lien has nothing to do with "taxes." Perhaps you misunderstood your letter from the HOA attorney. In CA, a County Treasurer/Tax Collector does not have to foreclose its tax lien. It has to wait until a full five (5) fiscal years of taxes are due and then auction the property. Each CA County Treasurer/Tax Collector typically has one auction per year on all their five-year delinquent properties at once.

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