In California, an HOA assessment lien is recorded against a condominium unit for $15,000 in unpaid assessments. The unit also has a first deed of trust. The HOA forecloses on its assessment lien. Under the Davis-Stirling Act, what happens to the first deed of trust?
Correct Answer
D) The first deed of trust remains as a lien on the property after the HOA foreclosure
Under the California Davis-Stirling Act (Civil Code §5680), an HOA has the right to record a lien and foreclose for unpaid assessments. However, the HOA assessment lien is generally junior to a first deed of trust. When the HOA forecloses, the buyer at the foreclosure sale takes the property subject to the existing first deed of trust. The deed of trust is not extinguished by the junior HOA lien foreclosure.
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Related Topics & Key Terms
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Related Concepts
A planned unit development (PUD) is a zoning classification that allows mixed land uses (residential, commercial, recreational) within a single development with flexible zoning standards. Homeowners typically own their lot and share common areas.
Police power is the government's authority to enact laws and regulations to protect the public health, safety, morals, and general welfare. It is the broadest power government has over private property.
Restrictive covenants, also known as CC&Rs (Covenants, Conditions & Restrictions), are private agreements written into deeds or HOA documents that limit how property can be used. They are enforced by property owners, not the government.
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