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AttyHeather, Lawyer
Category: Real Estate Law
Satisfied Customers: 677
Experience:  Attorney with 15 years experience
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I need some clarifications regarding HoA condo sale

Customer Question

Hello, I need some clarifications regarding HoA condo sale auction in San Diego. In brief, what does bidding amount include? All liens plus HoA dues plus amount to win the bid? Or just HoA dues plus amount to win the bid and I would need to pay liens separately? Thanks.
Submitted: 1 year ago.
Category: Real Estate Law
Customer: replied 1 year ago.
Is there anything else that I should know while bidding? This is my first time.
Customer: replied 1 year ago.
Also do I need to bring a check for the full amount to the auction or just 10%, for example?
Expert:  AttyHeather replied 1 year ago.
Hi, My name is*****'m an attorney with 15 years vigorous courtroom practice experience, and I would like to assist you in answering your question. My response is for information and education, and not as legal advice and we do not form an attorney/client relationship.Before bidding, you have to determine what liens are on the property - - and then you have to know what lien is senior, and what lien is junior. IF there is more than 2 liens, then they will have an order of priority. If the creditor selling the property is the senior lien holder, then the junior liens will be erased at the auction. If the creditor is not senior, but rather junior, then all liens that are senior will remain in place, but the liens that are more junior will be removed. If you buy the property, you are buying subject to the leins that are senior to whatever creditor is doing the auction. A creditor can erase liens that are junior to him, but not senior. An HOA lien is prior to all other liens recorded after the notice of assessment that is filed against the property, except that the CC&Rs may provide that the HOA lien may be subordinated to any other liens and encumbrances (Cal. Civ. Code § 1367(b),(d)). You might find the information here very useful: general information on bidding at foreclosures when there is an HOA lien is here:'s an example to clarify - - Spike wants to bid on Bleakhouse Condo, which is being auctioned. Bleakhouse was owned by Patty, who bought the house by obtaining a first mortgage with First Bank. Patty moved into the house and decided she needed money to buy furniture, so she got a loan from Second Hand Furniture, who in turn, took a lien (a second in priority - junior) against the house. (They didn't want a lien against the furniture - - it wasn't worth anything.) Then, Patty didn't pay her HOA fees through Third-Degree Homeowners' Ass'n and a notice of assessment was recorded against the property. Got a loan from Fourth Lending, and recorded against the property. Finally, Third-Degree HOA had enough and went through the proper process and decided to sell the condo at auction. Betty Buyer bids and wins. Betty's Bleakhouse Condo is subject to the mortgage from First Bank and also subject to the lans from Second Hand Furniture. Both were recorded and were senior to Third-Degree HOA, who didn't file their notice of assessment until after First and Second had recorded. However, the lien from Fourth Lending is removed, because it was junior to the HOA notice of assessment. (In this example, the HOA covenants did not state that the HOA lien was subordinated to any other liens, but it is possible that the covenants might state that. You would have to pull a copy of the covenants to determine this. Because of the complexity of the above example I gave you, alot of people find bidding at foreclosure auctions a bit scary, because you have to either get a title search, or know how to examine the chain of title yourself in order to know exactly what you are bidding on. Representations given by the person conducting the auction may be incorrect, and representations they make or assurances they might give cannot change what is recorded in the chain of title, so you have to check it yourself.To answer your second question, the auction advertisement should state how much money is required if you want to bid. Typically, it is a flat amount cashier's check, because they don't know in advance how much the winning bid is going to be. If it's not a flat fee, then you would need to have an hour or two to run and grab a cashier's check for the exact amount, but this amount is something that will be determined by the creditor putting on the auction, and so their phone number should be in the ad and you should call them beforehand if that is not clear.I hope that I have been of assistance to you tonight. Please kindly issue me a positive rating! I love getting nice feedback too, so I would love to hear that I have helped you out with my answer.Best,Heather S, Attorney