Anyone familiar with California HOA foreclosures?

[Shireen Y.]

If a property owned free and clear is sold at an HOA foreclosure auction, which law (SB1079 or Cal. Civ. Code 5715) applies?

For SB1079, a prospective owner-occupant can bid on the property post-sale and win the auction within a 45-day period. For Cal. Civ. Code 5715, the homeowner has 90 days post-sale to redeem the property. Which law applies in the case where an HOA organization is foreclosing the property? No one seems to have the answer to this. The trustee says they "cannot provide legal advice".

[Ryan Fox]

@Shireen Y.- Yeah so Civil Code section 5715 applies to a situation where the homeowner is trying to pay off the debt to the HOA and redeem his / her interest in the property.

SB1079 is codified at Civil Code section 2924m.  That code section, as you point out, allows a "prospective owner-occupant" to become owner if they submit a higher bid within 45 days after the sale.  There's nothing preventing the former owner from qualifying as the prospective owner-occupant as long as they meet the strict guidelines for being a prospective owner-occupant as set forth in Civil Code 2924m(a)(1).  That code section states:

(1) “Prospective owner-occupant” means a natural person who presents to the trustee an affidavit or declaration, pursuant to Section 2015.5 of the Code of Civil Procedure, that:
(A) They will occupy the property as their primary residence within 60 days of the trustee's deed being recorded.
(B) They will maintain their occupancy for at least one year.
(C) They are not any of the following:
(i) The mortgagor or trustor.
(ii) The child, spouse, or parent of the mortgagor or trustor.
(iii) The grantor of a living trust that was named in the title to the property when the notice of default was recorded.
(iv) An employee, officer, or member of the mortgagor or trustor.
(v) A person with an ownership interest in the mortgagor, unless the mortgagor is a publicly traded company.
(D) They are not acting as the agent of any other person or entity in purchasing the real property.

[Shireen Y.]

Thank you for the response, Ryan! To go a little deeper with the redemption laws, I found this law (below) that allows the purchaser to enter the property during reasonable hours. So, if I were to bid at such an auction (HOA foreclosure) would SB1079 apply AND laws surrounding the 90-day redemption period? Or, would someone need to wait the 45-day period before entering the property if they were the highest successful bidder?

Code of civil procedure section 729.090. Rents & profits during redemption period. 

(a) From the time of the sale until a redemption, the purchaser is entitled to receive from the person in possession the rents and profits from the property or the value of the use and occupation of the property.

(b) Notwithstanding subdivision (a), the purchaser is liable to the person who redeems for any rents or profits that have been received by the purchaser pursuant to subdivision (a).

(c) The purchaser, from the time of sale until redemption, is entitled to enter the property during reasonable hours to repair and maintain the premises and is entitled to an order restraining waste on the property from the court. Such order may be granted with or without notice in the discretion of the court.

[Ryan Fox]

@Shireen Y. - I'm assuming your not the owner of the property and you're bidding to buy it.  The Code of Civil Procedure does not define "right of redemption," so we don't know if CCP 729.090 applies to the 45-day right of redemption offered pursuant to CCP 29224m or the 90-day right of redemption offered by Civil Code 5715.  It would be safest to assume that the 90-day right of redemption applies and CCP 729.090 serves as a limit on your right to entry to the property.  

However, there's one case that says you're allowed to enter the property, change the locks, and renovate it if the property is vacant and uninhabitable to begin with. (Barry v. OC Residential Properties, LLC (2011) 194 Cal.App.4th 861, 868-869.)

Are there more cases that explain this better?  Possibly, but not that I can find without doing a lot more research.  

[Shireen Y.]

Thank you for the information, Ryan!!