When a community association forecloses on a separate interest/unit, the owner has a right of redemption within 90 days after the foreclosure sale. Code of Civ. Proc. § 729.035. If the owner redeems the unit, the foreclosure sale is canceled. Code of Civ. Proc. § 729.080(d). This right of redemption has ramifications for the association if the association is the purchaser at the foreclosure sale.
The association is not entitled to possession of the unit until after the 90-day redemption period, but the association is entitled to the rents and profits from the unit, or the value of use and occupancy of the unit, during the 90-day redemption period. Code of Civ. Proc. § 729.090(a).
Although the association is not entitled to possession during the redemption period, it has the right to enter the unit during reasonable hours to repair and maintain the premises. Code of Civ. Proc. § 729.090(c). The association may do so without notifying the owner, unless the owner is living in the unit. Barry v. OC Residential Properties, LLC (2011) 194 Cal.App.4th 861, 868. As a general rule, the association may make such repairs as are reasonably necessary for the preservation of the property, but not permanent improvements or things beyond what is proper to keep the premises in necessary repair. Id. at 871.
To redeem the unit, the owner must pay the redemption price, which includes (1) the purchase price that the association paid at the foreclosure sale; (2) the amount of any assessments or taxes and reasonable amounts for fire insurance, maintenance, upkeep, and repair of improvements on the property, even if performed by an unlicensed contractor; (3) any amount paid by the association on a prior obligation secured by the unit (e.g., the mortgage) to the extent that the payment was necessary to protect the association’s interest; and (4) interest on these amounts. Code of Civ. Proc. § 729.060(b); Barry v. OC Residential Properties, supra, 194 Cal.App.4th at 870. However, the redemption price is reduced by any rents and profits from the unit paid to the association or the value of the use and occupation of the unit to the association. Code of Civ. Proc. § 729.060(c).
If there is a dispute over the proper amount of the redemption price, the owner may petition the court for an order determining the redemption price, provided that the petition is filed before the expiration of the redemption period, and the owner deposits the undisputed amount with the foreclosure trustee. Code of Civ. Proc. § 729.070(a). If the owner does so, the court determines the amount required to redeem the property based upon affidavit or other evidence satisfactory to the court. Code of Civ. Proc. § 729.070(f). In that determination, the owner has the burden of proof. Code of Civ. Proc. § 729.070 (e).
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