An owner of a unit in a common interest development (CID) failed to pay his monthly homeowners’ association (HOA) fees and the HOA initiated a trustee’s foreclosure which resulted in a trustee’s sale. The unit was purchased at the trustee’s sale by a high bidder other than the HOA, subject to the owner’s right of redemption and recovery of title. During the redemption period, the high bidder at the trustee’s sale made numerous repairs to the unit necessary to maintain a habitable living space. The owner filed a petition to determine the redemption amount due to recover his title and the demand included the cost of repair made by the high bidder after the trustee’s sale. The owner sought to reduce the redemption price to exclude the cost of repairs, claiming the repairs were substantial improvements beyond the upkeep of the property. The high bidder claimed the redemption price should include the cost of the repairs since the repairs were required to maintain a habitable living space. A California appeals court held the redemption price included the cost of repairs made by the high bidder since the owner did not prove the repairs exceeded the reasonable maintenance and upkeep of the property. [Barry v. OC Residential Properties (2011) 194 CA 4th 861]

Editor’s note – The right of redemption usually does not exist in nonjudicial trustee’s foreclosure proceedings. However, sales arising from a foreclosure on a common interest development property made by its association are subject to the right of redemption during a 90-day period after the trustee’s foreclosure sale.