Plaintiff Shelby E. Barry filed a petition in the superior court to determine the redemption price for her unit in a common interest development that defendant OC Residential Properties, LLC, had acquired at a nonjudicial foreclosure sale. (Civ. Code, § 1367.1, subd. (g); Code Civ. Proc., § 729.070, subd. (a).) The trial court ruled the amount due was $18,048.71, a sum that included over $17,900 in expenses defendant paid for maintenance and repair work on the unit after the foreclosure sale, an electric bill, and interest on the foreclosure sale purchase price. Plaintiff challenges the inclusion of these sums in the redemption price and the constitutionality of the procedure for determining the amount she needed to pay to redeem the property. Finding no error, we shall affirm the order.
In 1977, plaintiff acquired a unit in a common interest development. Over the years, she leased the unit to others.
On the latter date, defendant purchased the unit at the foreclosure sale for $66,092.60. The sale was subject to plaintiff's right of redemption.
At the time of the foreclosure sale the unit was vacant. In a declaration supporting her petition, plaintiff claimed her "last tenant made substantial improvements" and the property was "in a condition such that I could re-rent it" with only some "minimal cleaning . . . ."
After purchasing the unit at the foreclosure sale, defendant paid a locksmith $336.11 to change the locks. One of its employees claimed, "Upon entering the . . . property on 6/17/09, . . . [defendant] discovered the property in need of repair and rehabilitation."
Between June 22 and July 2 defendant (1) paid a pest control company $800 to repair termite damage to the unit; (2) hired a contractor to make repairs, paying $16,800 for the work; and (3) paid an electricity bill for $17.15.
In her declaration, plaintiff claimed that, on July 3, she had a locksmith replace the locks. She also asserted "[a]n inspection of [the] property was made at that time which disclosed . . . the work undertaken by [defendant] was not complete," and the unit "could not be rented in the condition it was in."
The trustee sent plaintiff a letter enclosing a schedule showing the balance due to redeem the unit was $29,548.71 after deducting nearly $57,900 then held in trust. The schedule included the sums mentioned above, plus two months' homeowners association assessments, taxes, collection costs, and $770 for two months' interest on defendant's purchase price. Plaintiff objected to including the repair expenses, utility payment, and interest in the redemption price. She deposited $11,500 with the trustee and filed the current petition for a judicial determination of the amount owed.
After a hearing, the court issued an order declaring "the additional amount required to redeem the property total[ed] $18,048.71," constituting the difference between plaintiff's deposit and the balance claimed by the trustee. In part, the court found plaintiff "failed to meet her burden of proof to show that
Generally, there is no right of redemption in nonjudicial foreclosure proceedings. (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1236 [44 Cal.Rptr.2d 352, 900 P.2d 601].) But this case involves the foreclosure of a unit in a common interest development that resulted from plaintiff's failure to pay the homeowners association's monthly assessment for maintenance and preservation of the development's common areas. (Civ. Code, §§ 1367, subd. (a), 1367.1, subd. (g) [association may enforce lien for delinquent assessments through "sale by . . . trustee"].) Code of Civil Procedure section 729.035 declares, "Notwithstanding any provision of law to the contrary, the sale of a separate interest in a common interest development is subject to the right of redemption . . . if the sale arises from a foreclosure by the association of a common interest development pursuant to subdivision (g) of [s]ection 1367.1 of the Civil Code . . . ." (See also Civ. Code, § 1367.4, subd. (c)(4) ["A nonjudicial foreclosure by an association to collect upon a debt for delinquent assessments shall be subject to a right of redemption."].)
Code of Civil Procedure section 729.060, subdivision (a) requires "[a] person who seeks to redeem the property [to] deposit the redemption price with the levying officer who conducted the sale before the expiration of the redemption period." Subdivision (b) of this statute defines the redemption price as "the total of the following amounts . . . . [¶] (1) The purchase price at the sale. [¶] (2) The amount of any assessments or taxes and reasonable amounts for fire insurance, maintenance, upkeep, and repair of improvements on the property. [¶] (3) Any amount paid by the purchaser on a prior obligation secured by the property to the extent that the payment was necessary for the protection of the purchaser's interest. [¶] (4) Interest on the amounts described in paragraphs (1), (2), and (3) . . . ." In addition, subdivision (c) of Code of Civil Procedure section 729.060 authorizes an offset to the redeeming party for "[r]ents and profits from the property paid to the purchaser or the value of the use and occupation of the property to the purchaser . . . ."
The trial court ruled against plaintiff, finding she had not met her burden of proof to show the redemption price demanded by the trustee exceeded the legally permitted amount or that she was entitled to an offset.
Plaintiff attacks the constitutionality of the redemption procedure created by Code of Civil Procedure section 729.070. She claims defendant's "conduct [in entering the unit] prevented [her] from describing the [property's] condition" and therefore the statute "does not afford a meaningful hearing for [a] . . . homeowner to meet her[] burden of proof."
Plaintiff claims this procedure fails to "safeguard[] . . . the right to discovery" and she was not given a chance to document the condition of the premises before defendant entered and began making modifications to the unit. But she also acknowledged her last tenant vacated the premises before the foreclosure sale, thereby giving her possession of the premises to inspect and document the unit's habitable condition. There is no explanation of why plaintiff could not have obtained a declaration from the former tenant or photographically documented the condition of the premises when the last tenancy ended.
Next, plaintiff repeats her argument defendant acted as a trespasser, claiming it failed to contact her before having a locksmith change the locks and then engage a contractor to perform work that prepared the property for sale.
Plaintiff acknowledges Code of Civil Procedure section 729.090, subdivision (c) authorizes the purchaser at a foreclosure sale to enter the property "to repair and maintain the premises . . . ." While this statute limits entry to "reasonable hours" (ibid.), nothing in the statute required defendant to notify plaintiff or seek her cooperation. In addition, when the foreclosure sale occurred the unit was admittedly vacant and plaintiff had not shown any interest in recovering the property.
After entry, defendant began rehabilitating the unit with the intention of reselling it. Contrary to plaintiff's claim, this effort did not alter the unit's intended use. For that reason, plaintiff's reliance on Dwyer v. Carroll (1890)
Next, plaintiff presents a series of arguments attacking the amount awarded to defendant for the work performed on the unit before she retook possession of it.
Plaintiff's second claim concerns the license status of Axcell Construction, the contractor defendant hired to repair and rehabilitate the unit. In support of her petition, plaintiff submitted evidence Axcell's license was suspended at the time it worked on the unit. She argues defendant "cannot pass on [to her] an unlawful obligation for payments made to the unlicensed contractor...." We disagree with this interpretation of the applicable law.
Finally, plaintiff claims defendant is barred from recovering the repair and maintenance expenses because it "was creating a new thing, i.e., rehabilitating a rental unit for sale." This argument essentially amounts to an attack on the sufficiency of the evidence to support the trial court's decision. "`It is well established that a reviewing court starts with the presumption that the record contains evidence to sustain every finding of fact.' [Citations.]" (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881 [92 Cal.Rptr. 162, 479 P.2d 362].) Consequently, "`[w]hen a finding of fact is attacked on the ground that there is not any substantial evidence to sustain it, the power of an appellate court begins and ends with the determination as to whether there is any substantial evidence contradicted or uncontradicted which will support the finding of fact.' [Citations.]" (Ibid.) The same rule applies "whether the
Defendant's opposition to the petition included the declaration of Toby Strassenberg, one of its project managers. It stated he "personally evaluated the extent of damage" to the unit, concluding it was "in need of repair and rehabilitation." In part, the repair work resulted from the discovery of substantial termite damage. He also claimed, the "repairs made were necessary to prevent further damage to the property...."
Referring to her claim repairs "necessary to `maintain' the property as a rental unit" are distinguishable from repairs rehabilitating the unit for the purpose of a resale, plaintiff claims "no conflict appeared in the evidence before the trial court." While it may be true defendant made the repairs with the intent of reselling the unit, as discussed above, the distinction between one living in the unit as an owner and one living in it as a tenant, insofar as the right of redemption is concerned, amounts to a distinction without a difference.
Thus, plaintiff has failed to establish the trial court erred by awarding defendant the entire amount expended in the effort to repair and maintain the unit after acquiring it at the foreclosure sale.
Finally, noting the repair work begun by defendant "was not complete at the date of the hearing" on her petition and claiming "the amount to complete the work" would exceed the $770 in interest awarded to defendant as part of the redemption price, plaintiff argues awarding this amount to defendant would be inequitable.
The order is affirmed. Respondent shall recover its costs on appeal.
O'Leary, J., and Moore, J., concurred.