[WSBARP] What is the best possible outcome in this situation? (HOA debt)

[Craig Blackmon]

Listmates, I have a very unfortunate case concerning a debt <$10k. In other
words, it doesn't merit big legal fees (and the client doesn't have the
money in the first place). So I am turning to this awesome community for
some good insight on a possible path forward. Oh, and set me straight on my
analysis, as needed. Thanks in advance.

Facts: Home is part of an HOA. In 2006, owner/client defaults on mortgage
and HOA dues. 2009 lienholder initiates foreclosure; tenants vacate; lender
changes locks to secure property. Lienholder then discontinues sale. Owners
do not receive or understand the Discontinuance, and they believe they no
longer own the home (as evidenced by the changed locks). They move on with
their lives. Lienholder turns off utilities and eventually begins payment
of property taxes.

Today, nine years later, HOA files suit. Surprise! Client still owns the
place (and is thus liable for HOA dues). Home has an FMV of $285k. However,
$30k is needed to get home in market/rental condition. Lienholder asserts
$410k owed on lien, claiming all principal and interest due since default.
In reality, though, per *Cedar West Owners Assoc
<https://links.casemakerlegal.com/docid/2325009?bookname=public_url>*., the
lienholder is owed $275k (the last six years of missed payments plus
remaining principal).

HOA has no interest in taking ownership of unit and wants to be paid in
full for dues owed to date (and those in the future, of course). Client
obviously wants to resolve HOA debt forever -- past due and future amounts
-- and finally be done with the millstone hanging from their necks.

Anyone see a happy ending here for my clients? Or really any ending, other
than ongoing catastrophe? If you do, I am all ears. Thanks for taking the
time to read this post!

Craig


Craig Blackmon, Attorney at Law
Seattle Real Estate Lawyer <http://www.seattlepropertylawyer.com/>
92 Lenora St. (The Makers Space, a shared work environment)
Seattle WA 98121
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