It is rare for an assessment lien foreclosure to go all the way to sale. In the event it does, the bidding on a property at a foreclosure sale will generally open at the amount owed to the foreclosing creditor only. This means that if the association is owed $5,000, and there is a $100,000 senior lien (mortgage), the opening bid is still $5,000. However, the successful bidder takes title "subject to" the senior lien.
Cash or Cashier's Check. Any outside bidder present at the foreclosure sale must bring cash or cashier's checks to bid with. This means that if you wish to offer a bid at any foreclosure sale, you must present cashier's checks or cash in an amount in excess of the opening bid. The association itself does not need to bring cash or cashier's checks to bid at the sale. As the foreclosing creditor, the association has a "credit bid" for the amount it is owed.
Right of Redemption. The association's sale is concluded when the property is sold to the highest bidder. Whether the association or an outside purchaser acquires the property, the title is still subject to the owner's 90-day right of redemption. Note, the right of redemption applies to assessment lien foreclosures only, not trust deed foreclosures.
Thank you to Richard Witkin and his collection company Witkin & Neal, Inc. for this article.
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