[WSBARP] HOA priority lien - non-condomium act HOA's

Wed Dec 21 12:31:27 PST 2016

So I am confused now by your question.  The HOA CC&Rs, from what you quote pretty clearly say that the assessment is a lien from the time it is made and that they CAN record a notice, not that they HAVE to in order to perfect the lien.  You should be very sure there isn’t anything in there about the first mortgage holder being excepted.  I mean read it all, don’t ‘search’ the term.  (Not trying to be insulting, it would just be odd for them to call out that in the definitions but never again reference that in any way – they might call it something else).  Most HOAs subordinate because otherwise purchase money lenders are reticent to loan knowing they could lose their security because John Smith doesn’t pay his dues.  However, from what I can see, this HOA is also quite smart.  A lot of the better drafted CC&Rs include that little caveat – “Oh, we’ll subordinate but we have to have been sent a copy of the purchase money DOT within 60 days of recording”  (for example) And of course 10 years later you still have to have PROOF that it was sent.  Again, I’m not comfortable giving you a clear answer because I am not privy to the entirety of the CC&Rs but from what you have disclosed it seems to me likely that absent some subordination language which probably exists under certain conditions that the HOA has priority based on the date the CC&Rs were recorded and going back as far as the SOL.

Thanks,

Rich Holland
rich at pnwle.com<mailto:rich at pnwle.com>
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From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Josh Grant
Sent: Wednesday, December 21, 2016 11:58 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] HOA priority lien - non-condomium act HOA's

OK Thanks
Here is what the CC&R’s provide

...Any annual, special, and emergency assessments, together with interest, ...shall be a continuing lien on the Lot against which such assessment is made...  The Board shall have the right to publicly record a lien against title to a Lot evidencing the existence of this continuing lien. The personal obligation for delinquent assessments shall pas to a successor in title if a lien has been recorded against title to the Lot by the time of conveyance of title or commencement of foreclosure or forfeiture proceedings against any holder of title to a Lot.  ... The Board... may  foreclose a lien against the Lot in the same manner as a mortgage of real property.

Nothing about priority against any, even first deeds of trust. The definition section defines “First Mortgagee” shall mean a lender who holds the first mortgage on a Lot and who has notified the Association of the lender’s holdings.”  But then “first mortgage or first mortgagee’ never is repeated.

Josh

Joshua F. Grant, PS
Attorney at Law
P. O. Box 619
Wilbur, WA 99185
tel 509 647 5578
fax 509 647 2734
From: Patrick McDonald<mailto:pmcdonald at podymcdonaldlaw.com>
Sent: Wednesday, December 21, 2016 11:15 AM
To: WSBA Real Property Listserv<mailto:wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] HOA priority lien - non-condomium act HOA's

I don’t think the language you cited below has any bearing on the issue. The covenants will usually have a section providing for when a non-condo HOA’s lien is created (e.g., when the assessment is due, after recording a lien with the auditor, etc.,) and the lien’s relative priority against other encumbrances, including deeds of trust. It’s very common that the lien is subordinate to deeds of trust or possibly just first deeds of trust.

Patrick McDonald
_________________________
Pody & McDonald, PLLC
1200 Fifth Avenue, Suite 1410
Seattle, WA 98101-3106
T: 206-467-1559
F: 206-467-4489

From: <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> on behalf of Josh Grant <jgrant at accima.com<mailto:jgrant at accima.com>>
Reply-To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Date: Wednesday, December 21, 2016 at 10:43 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] HOA priority lien - non-condomium act HOA's

THanks!  This is the language in the CC&R’s:

“ …The terms of this Declaration, and any of its amendments, shall be binding on all parties having any right, title, or interest in any part of the Property at any time, and shall inure to the benefit of each owner thereof… The provisions of this Declaration shall be enforceable by … the association…

Article X Section 1: All present and future Lot Owners… shall be subject to and shall comply with the provisions of this Declaration…The acceptance of a deed or conveyance…shall constitute an agreement that the provisions of this Declaration and amendments are accepted and ratified by such Lot Owner…, and all such provisions shall be deemed and taken to be covenants running with the land and shall bind any person having an any time any interest of estate in such Lot as though such provisions were recited and stipulated at length in each and every deed and conveyance of lease thereof.
Does anyone think that this language allows the HOA to have a priority over later recorded deeds of trust?

Josh

Joshua F. Grant, PS
Attorney at Law
P. O. Box 619
Wilbur, WA 99185
tel 509 647 5578
fax 509 647 2734
From: James L. Strichartz<mailto:jim at condo-lawyers.com>
Sent: Tuesday, December 20, 2016 4:26 PM
To: WSBA Real Property Listserv<mailto:wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] HOA priority lien - non-condomium act HOA's

There is no statutory basis for a six-month super-priority lien for non-condo HOAs.  There is no statutory basis for any liens for HOA assessments.  Theoretically such a super-priority lien could arise based on the language of the covenants, but I am not familiar with any such provisions.

Jim Strichartz
Attorney
Fellow, College of Community Association Lawyers

Law Offices of James L. Strichartz
201 Queen Anne Avenue North, Suite 400
Seattle, WA 98109-4824

jim at condo-lawyers.com <mailto://jim@condo-lawyers.com/>
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http://www.linkedin.com/in/condolawyer

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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Josh Grant
Sent: Tuesday, December 20, 2016 4:02 PM
To: wsbar
Subject: [WSBARP] HOA priority lien - non-condomium act HOA's

I understand that under the Condominium Act RCW 64.34 that an association has a “super-priority” at least for 6 months of assessments, over prior recorded security interests (as long as the CC&R’s are recorded 1st). This was the ruling in:  In BAC Homeloans Servicing v. Fulbright 180 Wn 2d, 754 (2014) “a future lien for unpaid condominium assessments is established at the time the condominium declaration is recorded, even though it may not be enforceable until the unit owner defaults on his or her assessments, if ever.”

Is there similar authority for a HOA “super-priority” when the HOA is not under formed under the Condominium Act?  I think this was discussed before on this listserve and this super priority doesn’t exist for other HOA’s. ?

Thanks

Josh

Joshua F. Grant, PS
Attorney at Law
P. O. Box 619
Wilbur, WA 99185
tel 509 647 5578
fax 509 647 2734
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