Longer Timelines for Some HOA Foreclosures What Bird Rock v. Breaking Ground Means for Associations


Anne Rawlinson, Esq., Whitney Curry, APC HOA boards often think of assessment collections and


foreclosures as routine, predictable processes handled almost entirely by their collections law firm. A recent California Court of Appeal decision, Bird Rock Home Mortgage, LLC v. Breaking Ground, LP, is a reminder that even in this technical area, small assumptions can have large consequences. Boards and managers need enough understanding of the legal framework to ask the right questions before, during, and after a foreclosure.


The Bird Rock Backstory and Decision The Bird Rock case started with a nonjudicial foreclosure conducted to collect unpaid HOA assessments. At the trustee’s sale, one bidder appeared to “win” with a $60,000 bid. Instead of issuing a trustee’s deed, the collections firm acting as trustee kept the sale open under Civil Code section 2924m, which allows a post-sale extended bidding period in certain residential foreclosures.


During that extended period, a second bidder submitted a much higher bid—over $200,000—and ultimately received title. The original bidder sued, arguing that Civil Code section 2924m should not apply because this was an HOA assessment foreclosure, not a traditional mortgage foreclosure.


The Court of Appeal disagreed. It held that an HOA assessment lien, when enforced through a power of sale under the Davis-Stirling Act and the nonjudicial foreclosure statutes, is treated as a “mortgage” for purposes of Civil Code section 2924m. As a result, the extended bidding rules applied and the later, higher bid controlled.


The Court’s decision was based in part on the public policy underlying this law. Civil Code section 2924m was enacted to give buyers who intend to live in the foreclosed property a fair chance to acquire it, reducing neighborhood harm caused by excessive investor ownership. The Bird Rock court concluded that the same concerns could arise from HOA foreclosures, so the statute applies in that context as well.


Why the CC&Rs Matter One important clarification for boards is that Bird Rock does not mean Civil Code section 2924m automatically applies to every HOA collection action. Extended bidding is triggered only when the association’s governing documents and the Davis-Stirling Act work together to create: 1. An assessment lien, and 2. An express power-of-sale enforcement mechanism carried out using the Civil Code’s nonjudicial foreclosure statutes.


Most modern CC&Rs do exactly this. They typically provide that unpaid assessments become a lien against the owner’s separate


12 July |August 2026


interest and authorize the association to enforce that lien by trustee’s sale “pursuant to” or “in accordance with” the Civil Code foreclosure provisions. When those elements are present, the lien functions as a security device with a power of sale, not merely a contractual debt obligation. That distinction mattered in Bird Rock.


In short, whether extended bidding applies depends in part on how the CC&Rs are written and how the foreclosure is conducted.


Potential Benefits and Added Risk There is a potential upside for associations. In Bird Rock, the extended bidding period dramatically increased the sale price. Higher proceeds can improve recovery of delinquent assessments and costs and may reduce the risk of claims that the board failed to act reasonably in pursuing collection remedies.


At the same time, extended bidding adds complexity and risk. Foreclosure is already a highly procedural area. Notices, trustee instructions, timelines, and expectations all must account for the possibility that the sale remains open. Mistakes can invite disputes, delay recovery, or lead to litigation.


Why This Matters to Associations The most important point is that an HOA foreclosure sale may not be final when the auction ends. As a result: • A higher bid may appear days or weeks after the auction date.


• The apparent “winner” at the sale may not be the ultimate owner.


• Finality, distribution of sale proceeds, and file closure may take longer than boards expect.


In light of Bird Rock, boards and managers should: • Assume some HOA foreclosure sales may remain open after the auction date.


• Confirm that their collections firm is applying Civil Code section 2924m where required.


• Adjust expectations about foreclosure timing, sale finality, and communications with bidders and owners.


• Document board decisions and reliance on professional advice in high-stakes or controversial foreclosures.


Bottom line: HOA foreclosures are not necessarily harder now, but they may be less predictable and routine than before.


What to ask your collections firm after Bird Rock


• How do the CC&Rs authorize enforcement?


• Does Civil Code section 2924m apply?


• Will the sale remain open?


• How does extended bidding affect the collections timeline?


• Could recovery increase? • What risks exist?


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