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

Wed Dec 21 14:07:47 PST 2016

RIch
I very much appreciate you heads up.  That is the beauty of the list serve. I have read the CC&R’s about 10 times thinking that they must use the “first mortgagee” term... and they didn’t.  Probably lay people used a form and didn’t include something that had been in an original.
I know there was an amendment recorded  and I will read it over, but assuming that there isn’t anything in the amendment, it appears like the lien existed when an assessment is made “Any annual... assessments, together with interest, ...shall be a continuing lien on the lot against which such assessment is made...” 

So I take it we can allege that our lien, having been created in the first filed CC&R has priority for later assessments and prior to subsequently recorded deeds of trust. ... Notwithstanding a notice of lien is recorded after the deed of trust.  ???

Josh

From: Richard Holland 
Sent: Wednesday, December 21, 2016 12:31 PM
To: WSBA Real Property Listserv 
Subject: Re: [WSBARP] HOA priority lien - non-condomium act HOA's

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

733 7th Avenue, Suite 110

Kirkland, WA 98033

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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 

Sent: Wednesday, December 21, 2016 11:15 AM

To: WSBA Real Property Listserv 

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> on behalf of Josh Grant <jgrant at accima.com>
Reply-To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Date: Wednesday, December 21, 2016 at 10:43 AM
To: WSBA Real Property Listserv <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 

Sent: Tuesday, December 20, 2016 4:26 PM

To: WSBA Real Property Listserv 

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 

      http://www.condo-lawyers.com 

      http://www.linkedin.com/in/condolawyer
     tel:   206-388-0600

      fax:  206-286-2666

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From: 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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