Pacific Association Collections - PAC
Timeline of Non-Judicial Foreclosure Process
This is a short summary only and should not be relied upon for legal advice.
A more detailed summary and example follows.
- PAC is notified when a homeowner becomes delinquent in paying their assessments.
- The HOA starts the process by retaining PAC.
- PAC verifies legal ownership and the status of title.
- A Pre-lien Notice (Lien Warning Letter) is sent to all record owners by regular and certified mail.
- A thirty day statutory period begins to run.
- The process continues unless an owner demands IDR, ADR, disputes the debt, or files for bankruptcy.
- The board must vote in open session at a board meeting to authorize the recording of a lien. The decision must be recorded in the minutes.
- The lien is prepared and recorded after the conclusion of the first thirty day statutory period.
- The second thirty day statutory period begins to run upon the recording of the lien.
- A copy of the recorded lien is sent to every owner of record by regular and certified mail within 10 days of the recording date.
- The board must vote in executive session of a board meeting to authorize the foreclosure of a property. The decision must be recorded in the minutes and the decision to foreclose must be personally served on the owners if owner occupied.
- The process continues unless an owner demands IDR, ADR, disputes the debt, or files for bankruptcy.
- A seven day Intent to Foreclose Notice is sent to the delinquent owner before a foreclosure is started.
- A Notice of Default (NOD) is prepared and recorded after the seven day warning and after PAC obtains a Trustee's Sale Guarantee (TSG). A copy of the recorded document is sent to every owner of record by regular and certified mail within 10 days of the recording date.
- A statutory three month waiting period begins.
- A copy of the Notice of Sale is sent to all interested parties that have requested notice by certified mail.
- A Notice of Sale is prepared, posted on the property, and recorded. A copy of the recorded document is then mailed to every owner of record by regular and certified mail at least 20 days before the sale date. The sale date cannot be earlier than three months and 20 days after recording the NOD. A TSG update is obtained.
- The process continues unless an owner demands IDR, ADR, disputes the debt, or files for bankruptcy.
- Assuming the assessments owing are $1,800 or more, or more than 12 months delinquent, the property is sold to the highest bidder or reverts to the HOA to satisfy delinquent assessments and the cost of collection. The trustee prepares and records the required documents.
- In the extremely unlikely event that an HOA acquires a property by foreclosure, PAC can arrange the short term management and sale of the individual unit for the HOA.
- A 90 day Right of Redemption runs from the date of the trustee's sale.
Non-Judicial Foreclosure Timeline
Following is a non-judicial foreclosure timeline based on the assumption that the assessment was due on the first day of January. The timeline also assumes that the delinquent homeowner does not contact PAC regarding the delinquent account. The timeline would be modified if, for example, the homeowner requests a payment plan or requests alternative dispute resolution, which would delay the process. There are also a number of other factors that are not foreseeable that could also effect the timeline. Assuming the homeowner fails and refuses to make any effort to pay their delinquent assessment obligation to their association, which is most common, the following timeline describes how the process normally proceeds.
January 1 The association does not receive the homeowner's monthly assessment.
January 16 (15 days or the date specified in the CC&Rs if different). In accordance with the California Civil Code, an assessment is late 15 days after it becomes due unless the CC&Rs specify a later date, in which case the later date applies. Therefore, the unpaid assessment is now late and a 10% or $10.00 charge, whichever is greater, (unless a lesser amount is specified in the CC&Rs, in which case the lesser amount applies) is now also owed to the association.
February 1 (30 days after first
late assessment was due)If the January assessment has not been received, the association can now charge interest at the rate of 12% per annum on the total unpaid balance, unless the CC&Rs provide otherwise. In addition, the February assessment is now due.
February 15 (45 days after first late assessment was due unless a longer period is specified in the CC&Rs.) A second late charge is added with the late February payment. At this time, the association should send a demand letter to the delinquent homeowner demanding immediate payment.
March 1 (Assessments are now 2 months past due) The assessment for March is now due. If assessments are still delinquent for January and February, the matter should be turned over to PAC. At this time, a Lien Warning Letter will be sent demanding that the assessments be paid within thirty (30) days or the non-judicial foreclosure process will commence. Late fees, interest, collection fees and other collection costs will be added. The letter advises the homeowner that failing to bring his or her account current will result in a Lien being recorded against his or her property.
March 31 (30 days from the date of the Lien Warning Letter) Depending on when the matter is transferred to PAC, the Lien will be recorded in accordance with California law. The lien secures the delinquent homeowner's assessments owing including collection costs. The non- judicial foreclosure proceedings can now be commenced. At this point, nearly all delinquent owners pay their debt and all costs.
April 20 (10 days before preparation of a Notice of Default) A reminder letter is sent to the delinquent homeowner advising him or her of the current balance due and that PAC will proceed with foreclosure if payment is not received in seven (7) days.
April 30 (30 days after recordation of a Lien.) If assessments are still delinquent, a Notice of Default (NOD) is recorded with the County Recorders Office. The NOD advises the delinquent homeowner that he or she has three (3) months to pay the unpaid assessments, late charges, collection costs, trustee fees and costs before the non-judicial foreclosure sale commences. The NOD is mailed to all interested parties.
Upon Request At any point during the non-judicial foreclosure process, a delinquent homeowner may request a payment plan. PAC then submits the request to the Board of Directors, which has the discretion to accept or reject the payment plan. If a homeowner requests to meet with the Board in executive session within 15 days of the date of the preliminary notice, the Board (or a committee of the Board) must meet with the owner within 45 days after the request.
July 30 (3 months after an NOD is recorded) If the delinquent assessments continue to remain unpaid, a PAC Trustee will record a Notice of Trustee Sale, scheduling a public auction of the delinquent homeowner's unit or home. The sale can occur in as little as twenty-eight (28) days. The notice is published weekly during that period. It must also be posted publicly, as well as on the property, within two (2) weeks prior to the sale.
August 15 To stop the foreclosure during the five (5) day countdown to a scheduled auction, the homeowner can cure the default by paying all past due assessments and other fees, charges and costs. The association has the option of working out a payment arrangement with the delinquent homeowner.
August 30 (approximately 8 months after the first delinquent assessment was due) The foreclosure sale is conducted at a public auction in the county where the property is located. The sale is to the highest bidder who must pay in cash or a cash equivalent. If there are no bidders, the property will revert to the association who becomes the legal owner.
If you have any questions regarding this timeline, please contact us.
Remember laws are subject to change, which means this timeline is also subject to change. Do not rely on this timeline for legal advice. It is intended to provide an example.