Foreclosure in Seattle>Question Details

Misteripa, Other/Just Looking in Seattle, WA

In WA, who owes the HOA dues in a foreclosure when there is a lien on the property for them?

Asked by Misteripa, Seattle, WA Wed Sep 28, 2011

I owned a condo that went into foreclosure. It is currently for sale, status is "bank-owned". The collection agency has been quiet and recently sent an email asking me when I expect I can pay the HOA dues. They have so many side charges and fees, the outstanding amount is nearly double what it would have been if I had paid HOAs only. Since the collection agency put a lien on my property, can they come after me?

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Rely on legal advice provided by non-lawyers -- and lawyers! -- via a blog at your peril. This is not legal advice and I am not your attorney. You should consult an attorney about your situation (it sounds like there is substantial money at issue, which merits incurring legal fees).

With that disclaimer aside... Depending on when your condo was created, the HOA may have had a "super-priority" lien for the prior 6 months of dues that should have been paid at the foreclosure (which is when the bank "bought" it back). If so, then the prior six months of dues should have been paid. If not, then no HOA dues were paid at the foreclosure.

In the final analysis, though, condo dues are BOTH a lien on the property AND a personal obligation. So yes, the HOA can -- and apparently is, like many others -- coming after you because you didn't pay the obligation. And yes, its a much bigger number now because you failed to pay on time. That is legitmate.

Finally, given Tonya's comment below I must note: A creditor can garnish your wages ONLY IF the creditor has reduced the debt to a judgment. So if you don't deal with this issue, and if the HOA sues you, it will win and it will get a judgment against you for the full amount. At that point, the HOA will begin efforts to garnish wages, bank accounts, etc. -- i.e. take your money without your consent.
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2 votes Thank Flag Link Wed Sep 28, 2011
If a lien is a contract that says if you don't pay, we can your property, where is the contract that says they come after you if the place is foreclosed upon by a bank? I have always heard that if there is a lien on a property that the new owner is responsible. I understood what you said in your post, but you are not backing it up with any facts. Where are the facts/cases? It doesn't really make sense.
Flag Wed Mar 12, 2014
I know the answer Craig and some others have given seems to be the standard answer, but I really don't understand the basis for personal liability on HOA dues. You take a deed to the property which is subject to the HOA. What's the basis for personal liability? I could see if you were living there it could be some equitable grounds, because you'd benefit from the services and utilities provided. If if you've abandoned the property I just don't see the basis.

This was an issue in bankruptcy too, because there are decisions on whether the dues are dischargeable going forward. I've just never had a client where either was an issue, so I've never researched it.
2 votes Thank Flag Link Wed Sep 28, 2011
Craig, thanks for looking that up. The act for condominiums established before 1990 doesn't seem to be as explicit, but it does mention a right to sue: "Suit to recover any judgment for any unpaid common expenses shall be maintainable without foreclosing or waiving the liens securing the same." 62.32.220(2).
1 vote Thank Flag Link Thu Sep 29, 2011
Folks are telling you all the things that the HOA will do to you, get legal advise, for your interest, and most likely file some form of bankruptcy to get you from under this debt and most likely others that you may have, as well.

Best to you,

1 vote Thank Flag Link Wed Sep 28, 2011
You do, and yes, they certainly can.

HOA assessments are a lien on the property, and they're also (usually) a personal obligation. A person who buys the property at foreclosure can be on the hook for up to six months' of delinquent assessments, the balance is a personal obligation that you are responsible for.

The side charges and fees are substantial, but so is the effect of delinquent dues payers on an HOA. For one thing, the HOA has to hire professional service providers to catch up with you. Another thing is that the HOA isn't a bank, which can carry you for a few months until you get back on your feet - instead, the HOA can't afford to be short when their regularly scheduled obligations come due - for example, when it's time to pay the insurance premium or the elevator maintenance company or the backflow inspector.

So, the bad news for you is, yes, they can come after you.

Best wishes,
1 vote Thank Flag Link Wed Sep 28, 2011
What you are demonstrating is one of the disadvantages of not being able to Short Sale the property and have an opportunity to settle the issue in the negotiations with the lien-holder.
1 vote Thank Flag Link Wed Sep 28, 2011
Yes they can. HOA dues are almost as stuborn as an IRS lien. The money may have to be paid by the eventual buyer or cleared by the bank, but that will result in a judgement that will follow you.

If you contact tthe collection company directly you can probably work out something, but remember.... These dues are something that you did owe, so it's binding against you. I know it's tough out there, and so do most collection companies. Finding a solution now will result in your credit clearing faster than just wishing it will go away.
1 vote Thank Flag Link Wed Sep 28, 2011
Yes, they can garnish your wages to have the amount paid. Most HOA's are relentless too
1 vote Thank Flag Link Wed Sep 28, 2011
Check 64.34.364 section 11 if you obtain through foreclosure you are not responsible for previous HOA s
0 votes Thank Flag Link Wed Jul 20, 2016
You made a commitment to the bank and to the HOA when you purchased the property. Your name is on the title until the auction has been completed, therefore you are responsible. The complex can not be maintained properly if the HOA does not collect its dues. I do not know your personal circumstances, but, yes, you have made that obligation by your own signature on the dotted line. As long as you don't pay, the sum will continue to increase because of late fees and various attempts your debtors make to communicate and meet with you as they try to reach a resolution. If you have tenants in your unit, the HOA can also garnish your rent. Usually, the HOA will work with you (as will the bank) to create a payment plan. There really are dead beat homeowners out there that don't take responsibility for their own actions, though.
0 votes Thank Flag Link Sat Aug 25, 2012
Despite reports that homeowners are increasingly “walking away” from their mortgages, most homeowners continue to make their payments even when they are significantly underwater. This article suggests that most homeowners choose not to strategically default as a result of two emotional forces: 1) the desire to avoid the shame and guilt of foreclosure; and 2) exaggerated anxiety over foreclosure’s perceived consequences. Moreover, these emotional constraints are actively cultivated by the government and other social control agents in order to encourage homeowners to follow social and moral norms related to the honoring of financial obligations - and to ignore market and legal norms under which strategic default might be both viable and the wisest financial decision. Norms governing homeowner behavior stand in sharp contrast to norms governing lenders, who seek to maximize profits or minimize losses irrespective of concerns of morality or social responsibility. This norm asymmetry leads to distributional inequalities in which individual homeowners shoulder a disproportionate burden from the housing collapse.
Flag Wed Mar 12, 2014
Flag Wed Mar 12, 2014
Try reading this and maybe you will understand: "a new academic paper by Brent T. White, a University of Arizona law school professor, titled "Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis."
Flag Wed Mar 12, 2014
They didn't make a "commitment." They made a contract, which is breakable. In this case it was brokeN, and the consequence was lose of the property. If the lien was tied to the property, I'd like to see the fine print that says they can enforce a personal lien, when there was no contract for a personal lien. It is not the problem of the former owner if the HOA has money flow issues. Someone who opts for a foreclosure is not a deadbeat. Corporations do it all the time, and they do finically what is is best for their bottom line. PEOPLE can do this too, which is smart. Which HOA's know, so that is why they make contracts and put liens on a property. When a bank gets a property back, the lien should be theirs. I love how all these laws are aimed and making the poor poorer and the rich richer. And american citizens buy into this emotional crap like someone is a deadbeat if they don't pay, and a company is smart if it gets out of paying. How did this happen?
Flag Wed Mar 12, 2014
Mack, the issue is personal liability. Without the statute Craig cited, it would only be a lien item, sort of like how when you purchase subject to a deed of trust, you are not personally liable. The condo declaration you're looking at was probably written with the statute Craig cited in mind.
0 votes Thank Flag Link Fri Sep 30, 2011
I was just looking at the condo declaration where I own a unit, and it has a paragraph titled, "Assessments Are Personal Obligation." In addition to constituting a lien on the Unit, all sums chargeable to any Unit . . . shall be the personal obligation of the Owner of the Unit when the assessments are made." Then I checked a resale certificate on a recent sale, and saw similar wording.

So, Mister IPA, read your condo documents!
0 votes Thank Flag Link Thu Sep 29, 2011
I don't know about the logic behind it, but the law imposes personal liability for unpaid assessments. Per RCW 64.34.364(12):

In addition to constituting a lien on the unit, each assessment shall be the joint and several obligation of the owner or owners of the unit to which the same are assessed as of the time the assessment is due.

Some guesses are more educated than others. But Misteripa, rely on legal advice via a blog at your peril.
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0 votes Thank Flag Link Thu Sep 29, 2011
Kary, to address your post: I agree with you. I don't think HOA fees should follow someone off the property.

I guess the logic is that the condo owner benefits from each month's HOA dues, during that month. Water/Sewer/Garbage, right? So you pay dues for January and you get water/sewer/garbage in january, as well as getting the lawn mowed or whatever. An argument could be made that since you are the one who took those showers, you should pay for them.

Yeah I know this doesn't address the reserves, etc., but I can't think of any other reason to assign personal liability to HOA dues, when logic tells us this should be attached to the property.

On an unrelated topic--Why do so many HOA's shoot their members in the foot with assinine restrictions? No signage, I guess I understand, but no keyboxes? I only hope that whomever votes for rules like that gets to suffer when they're trying to sell. Ok, off my soapbox now.
0 votes Thank Flag Link Wed Sep 28, 2011
We paid water/sewer/garbage on our own. The only thing the $350 a month dues covered was elaborate landscaping incited by the old ladies who ran the place. Disgusting!
Flag Wed Mar 12, 2014
You should have never let the place go to foreclosure. As to the homeowners dues, I would ask that question to an attorney. It would be easy for them to answer that correctly. Here you are getting a bunch of intelligent guesses.
0 votes Thank Flag Link Wed Sep 28, 2011
This is pretty common, the HOA will usually send the account to their attorney for collection.

If anyone's reading this who is in a similar situation--Don't let your property go to foreclosure, try every other option first, including short sale. I listed and sold a couple of condos recently where this was happening and got the buyers to pay off all the past dues and additional liens at closing, including the HOA attorney's fees. But those were short sales and I think it's too late for that in the OP's case.

Sorry, I dont' have anything more to add for the OP, so I'll just agree with Craig and Mack.
0 votes Thank Flag Link Wed Sep 28, 2011
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