Our Process
THE ASSESSMENT LIEN ∙ NON-JUDICIAL FORECLOSURE PROCESS
- PRE-LIEN DEMAND
Before an association may place a lien upon the separate interest of an owner to collect delinquent assessments, the association shall notify the property owner (the “Debtor”) in writing by certified mail of the fee and penalty procedures of the association, provide an itemized statement of the charges owed by the debtor [as specified in California Civil Code §5650(b)], and the collection practices used by the Association, including the right of the association to reasonable costs of collection, and make demand for payment of the debtor’s arrearages and the association’s costs.
To begin the lien (or pre-lien) process, our company must be provided with a Declaration of Default and Demand for Sale which provides the information and authorization required to issue the Association’s pre-lien demand and to impose a lien on the debtor’s property.
- NOTICE OF DELINQUENT ASSESSMENT
Upon the expiration of thirty (30) days after the date of the Pre-Lien Demand, and approval of its Board of Directors, the association may execute and record a Notice of Delinquent Assessment. Copies of the Notice of Delinquent Assessment must be mailed to the debtor by both certified mail and first class [in accordance with California Civil Code §2924b], no later than ten (10) calendar days after recording.
- NOTICE OF DEFAULT AND ELECTION TO SELL
Upon the expiration of thirty (30) days after the Notice of Delinquent Assessment is recorded, and approval of its Board of Directors, the association may authorize its Trustee to proceed with non-judicial foreclosure of the debtor’s property. California statutes provide that a properly completed and executed Notice of Delinquent Assessment may be foreclosed in a manner similar to and with the same effect as a Deed of Trust. Such statutes further provide no foreclosure proceedings may be commenced until at least $1,800.00 of assessments are past due or assessments are more than twelve (12) months delinquent.
A Notice of Decision to Initiate Foreclosure Proceedings is personally served by a registered process server [in accordance with Code of Civil Procedure Section 415.10]. A Notice of Default and Election to Sell is then prepared, executed and recorded by the Trustee. Copies of such Notice must be mailed to the debtor [in accordance with California Civil Code §2924b], as well as to all other parties who are entitled by statute to receive copies thereof. A copy of such Notice must then be either 1. Personally served on the debtor 2. Published in a qualified newspaper once a week for four consecutive weeks, or 3. Posted on a conspicuous place on the debtor’s property. (California Civil Code §2924b (d).)
- NOTICE OF TRUSTEE’S SALE / TRUSTEE’S SALE
No less than three (3) months after recording of the Notice of Default, the association may elect to proceed with a sale of the property to satisfy the debtor’s obligations. A Notice of Trustee’s Sale is prepared, executed and recorded by the Trustee, and mailed, by both certified mail and first class mail, at least twenty (20) days prior to the scheduled sale date to all parties entitled to receive a copy of the Notice of Default. Special notice requirements must also be complied with in cases of certain Tax Liens of record. The Notice must also be posted on the debtor’s property and published in a qualified newspaper once a week for three (3) consecutive weeks.
If the debtor’s account is not fully reinstated prior to the date of sale, a public auction of the property is conducted. A minimum bid, representing the total amount due the association, including all foreclosure costs, is made by the auctioneer on behalf of the association. Any interested party may thereafter increase the bid, provided, that any bid made must be by cash or cash equivalent payable at the time of sale. The highest bidder (or the association, if no other party bids) becomes the owner of the debtor’s property, subject to any superior liens and encumbrances (i.e. senior mortgages, property taxes, etc.), and subject to a ninety-day (90) redemption period allowed to the debtor.
The Trustee executes and records a Certificate of Foreclosure Sale Subject to Redemption. After a nine-day (90) redemption period expires (if the property is not redeemed), the Trustee executes and records its Trustee’s Deed which conveys title to the debtor’s property to the highest bidder.