When Is a Foreclosure Sale Really Final? New Court Case Brings Clarity

By Randy Newma
This article first appeared in our Communicator Magazine, Winter 2026 Issue.

If your association has ever had to foreclose on a home for unpaid assessments, you probably know how stressful and complicated the process can be. A recent California Court of Appeal decision, Bird Rock Home Mortgage, LLC v. Breaking Ground, LP (2025) D084138 (filed September 16, 2025) makes it clear that foreclosure sales may take longer to finalize than many expected.

WHAT HAPPENED

The Oceanside Community Association foreclosed on a property after the owners stopped paying their assessments. At the foreclosure sale, a bidder, Bird Rock Home Mortgage, offered $60,000 and thought they had won as the successful bidder at the foreclosure sale. Wisely, instead of handing over the deed, the trustee kept the sale "open" for the mandatory holding period under the recent California law, Civil Code § 2924m. During that time, a qualified nonprofit called Breaking Ground stepped in and submitted a bid of $203,000, resulting in the trustee delivering the Trustee’s Deed Upon Sale to Breaking Ground.

Bird Rock sued, claiming HOA foreclosures are not covered by this extended bidding law. The court disagreed and said that although it is not a deed of trust, the statutory scheme under which delinquent assessments are foreclosed mandates that the trustee comply with Civil Code §2924m.

WHY THIS MATTERS FOR HOAS

• Sales Take Longer: Unless the winning bidder is an actual person who plans to live in the home, the sale is not final right away. It could take up to 60 extra days.
• More Money: The delay might sound like a headache, but it can lead to higher bids resulting in the HOA getting paid in full and still have surplus funds available to any junior lienholders or the property owner.
• Redemption Period Shifts: Owners still have 90 days to buy back their property, but that 90-day clock doesn’t start until the sale is truly final. The owner’s period of redemption will start up to 60 days after the foreclosure sale has occurred.
• Better Outcomes for Communities: Nonprofits and other eligible bidders may keep homes occupied and reduce vacancy or blight.

TAKEAWAYS FOR MANAGERS & BOARDS

• Prepare boards for possible delays in foreclosure timelines.
• Work with your trustee or attorney to ensure the sale is handled properly under §2924m.
• Keep homeowners informed so they understand their rights and timelines.

Bottom line: The redemption period following an HOA foreclosure sale may now be up to 150 days following the time the gavel falls. But, with the chance of higher sale prices, the wait may actually help associations and communities in the long run.