The ability of a deed-restricted association that is not a common interest development (CID), and therefore not subject to the Davis-Stirling Act, to initiate non-judicial foreclosure of a lien (even if the CC&Rs so authorize) is problematic. None of the consumer protections built into the Act would apply to the homeowner. A non-CID can record a lien, but the ability to initiate non-judicial foreclosure on that lien is questionable because:
- There is no clear statutory foreclosure procedure;
- Mandatory annual financial disclosures of HOA finances and collection policies are not required;
- There is no right of redemption;
- There are no procedures for homeowners to dispute the debt.
Recommendation: Non-CID associations can proceed with judicial foreclosures but should be cautious when it comes to non-judicial foreclosures.
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