If your home is part of a condominium owners' association (COA) or homeowners' association (HOA) and you fall behind in assessments in Washington:
If the COA or HOA initiates a foreclosure, you might have a defense to the action, such as the association charged you too much, assessed unreasonable fees, or failed to follow state laws.
Or you might be able to negotiate a way to get caught up on the overdue amounts and save your home. For example, you might be able to pay off the entire delinquency, negotiate a reduced payoff amount, or enter into a repayment plan.
When you buy a single-family home, townhome, or condominium that's part of a planned community with covenants, you'll most likely pay fees and assessments, often collectively called "assessments," to a COA or HOA. If you fall behind in the assessments, the association will likely initially try to collect the debt using traditional methods. For instance, the association will probably call you and send letters.
But if those tactics don't get you to pay up, the association might try other ways to collect from you. The association could take away your privileges to use the common facilities or file a lawsuit for a money judgment against you.
Based on the association's Declaration of Condominium or Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and state law, most COAs and HOAs also have the power to get a lien on your property if you become delinquent in assessments. Once you fall behind in payments, a lien will usually automatically attach to your property. Sometimes, the association will record its lien with the county recorder to provide public notice that the lien exists, regardless of whether state law requires recording.
An assessments lien clouds the title to the property, hindering your ability to sell or refinance the home. In addition, the property can also be foreclosed to force a sale to a new owner—even if the property has a mortgage.
In Washington, a COA is entitled to a lien on a condo for any unpaid assessments from the time the assessment is due. (Wash. Rev. Code § 64.34.364(1)). The recording of the COA's governing documents, the Declaration of Condominium, in the county records constitutes record notice and perfection of the lien. The COA doesn't have to record the lien in the county records, although it can do so if it wants. (Wash. Rev. Code § 64.34.364(7)).
If you make a written request to the COA, the association must provide you with a statement of the amount due within 15 days after receiving the request. (Wash. Rev. Code § 64.34.364(15)).
If you're part of an HOA, check the association's governing documents, specifically the Declaration of Covenants, Conditions, and Restrictions (CC&Rs), to learn about the association's right to place a lien on your home if you don't pay the assessments.
State law and the COA or HOA's governing documents will usually set out the type of charges the association may impose in addition to the past-due assessments.
In Washington, a COA also has the power to impose:
To find out which charges an HOA in Washington may include in its lien, check the association's governing documents.
Once a COA or HOA has a lien, it may foreclose.
In Washington, a COA lien may be foreclosed:
Unless the COA starts a foreclosure or sues the condo owner for payment within three years after the full amount of the assessments becomes due, a lien for unpaid assessments, as well as the condo owner's personal liability for the assessments, is extinguished. (Wash. Rev. Code § 64.34.364(8)).
Read the association's governing documents to find out about an HOA's right to foreclose if you become delinquent in paying the assessments.
An association may not commence an action to foreclose a lien unless, at the time the action is commenced, the owner owes at least a sum equal to the greater of:
Also, before starting a foreclosure, the association must (at or after the date that assessments have become past due for at least 90 days) mail, by first-class mail, to the owner, at the property address and to any other address which the owner has provided to the association, a notice of delinquency. Then, 180 days must elapse (90 days effective January 1, 2024) from the date the minimum amount required to foreclose accrued, and the board must approve the foreclosure action. (Wash. Rev. Code § 64.34.364(17), § 64.38.100).
A common misconception is that the association can't foreclose if you're current with your mortgage payments. But an association's right to foreclose isn't dependent on whether you're paid up on your mortgage. Instead, lien priority determines what happens in a foreclosure.
The priority of liens establishes who gets paid first following a foreclosure sale and often determines whether a lienholder will get paid at all. Liens generally follow the "first in time, first in right" rule, which says that whichever lien is recorded first in the land records has higher priority than later recorded liens. A first lien has a higher priority than other liens and gets the first crack at the foreclosure sale proceeds.
If any proceeds are left after the first lien is paid in full, the excess proceeds go to the second lienholder until that lien is paid off. And so on. A lien with a low priority might get nothing from a foreclosure sale.
But state law or an association's governing documents might adjust lien priority.
In Washington, COA liens are generally prior to all other liens, except for:
But under Washington law, a COA is entitled to a super lien over mortgages recorded before the date that the assessment became delinquent in an amount equal to six months' worth of delinquent common expense assessments. (Wash. Rev. Code § 64.34.364(3)).
This priority lien can be reduced by up to three months under certain circumstances and, if the COA elects to foreclose nonjudicially, it's not entitled to a super lien. (Wash. Rev. Code § 64.34.364(4),(5)).
To find out the priority of an HOA lien in Washington, check the association's governing documents. Often, an HOA's CC&Rs will state that an HOA lien is subordinate to a lender's mortgage.
If you're facing a COA or HOA foreclosure in Washington, consider consulting with a foreclosure attorney to learn more about how the law applies to your situation and to discuss all legal options available in your particular circumstances.