QUESTION: Our property manager sent a delinquent owner a notice of foreclosure via certified mail. However, the owner never signed for it. Can he use that as an excuse to derail the foreclosure?

ANSWER: No. Although Civil Code §2924b(b) requires that notices be sent by registered or certified mail, it does not require a signed receipt before an association moves to the next step in the foreclosure process.

Refusal to Sign. To require a signed receipt means a person could stop a foreclosure by refusing to sign for letters. Because owners often refuse to sign for certified mail, Civil Code §2924b(e) also requires that notice be given concurrently by first-class mail. The court in Bear Creek v. Edwards addressed the issue of unsigned receipts and determined that notice cannot be defeated by a person's willful failure to accept certified mail. The Bear Creek court commented that,

while a signed return receipt may create a rebuttable presumption that the notice was received, the absence of such a signed return receipt does not negate any other presumptions concerning mailed items. Under Evidence Code section 641, "[a] letter correctly addressed and properly mailed is presumed to have been received in the ordinary course of mail."

Notice Requirements. Your question was not clear about '"notice of foreclosure." A foreclosure starts with a Notice of Default (NOD). After three months a Notice of Sale can be prepared. For the NOD, there is an additional requirement of personal or substituted service for assessment lien foreclosures as set forth in Civil Code §1367.1(j). Service of the NOD can be a problem when the owner cannot be located or is deceased. As for a Notice of Sale, it must be recorded, published, mailed and posted but not personally served.

RECOMMENDATION: Because taking away someone's home through foreclosure is quite serious, associations must carefully follow all steps required by law for giving proper notice to a delinquent owner. To that end, boards should use experienced collection companies that specialize in homeowner associations.