California Court Says Lender that Delays Foreclosure for “Strategic” Reasons is Not Liable for Unpaid HOA Assessments

UNPUBLISHED California Appellate Court decision (September 15, 2017).

In this case, a homeowners association (“Association”) filed suit against lenders holding liens on a homeowner’s property seeking to recover unpaid assessments owed to Association by the homeowner. Association sought to impose liability on the lenders contending that they were “strategically” delaying foreclosing on the defaulting homeowner’s residence to allow the real estate market to recover without paying for the benefits that were being provided by Association for such things as insurance, maintenance, and utilities. By not paying for the assessments relating to the subject property and receiving the benefits, Association contended that the lenders were unjustly enriched.