When a townhouse is listed for Auction for the trustee who represents the HOA of the townhouse, so if I end up buying the townhouse, do I care about the amount that is owed to 1st loan which was recorded years ahead of the NOD from HOA. I think the 1st loan is still the senior lien holder and I will need to pay the amount is owed to the 1st loan.
Hi Mi,
Most HOA’s are not a “super senior” or “pre-lien” lien like the property taxes. This means that although the CC&R’s predate the Deed of Trust the past due dues are typically not senior to a Deed of Trust. When a Deed of Trust is recorded one of the funding conditions on the loan is that the HOA dues are paid current. If the homeowner falls behind on the HOA dues after that then the HOA would need to record a lien and foreclose on that lien position. This means that in most cases the HOA lien is junior to a Deed of Trust. If you purchased a HOA foreclosure you would still be responsible for the payment of any senior liens or loans.
There is a case about 10 years ago that states that the HOA lien priority dates from when the HOA Lien was filed - NOT what the HOA CC&Rs say.
95 Cal.Rptr.2d 779 (2000)
80 Cal.App.4th 1093
So - ALL Deeds of Trust recorded before the HOA lien that usually records a few months before the NOD are senior.
And don’t forget - there is a 90 day right of redemption after an HOA sale.