[WSBARP] Foreclosure Surplus Funds and Homestead - City Abatement Lien

Tue Sep 10 20:39:17 PDT 2019

On a somewhat similar note, I’ve seen several notices from Superior Court Clerk’s Offices of surplus funds held after a foreclosure which are sent out to those that are entitled to the funds. However, I’ve noticed they seem to regularly send the notice to the successful bidder at foreclosure auction, leading the successful bidder to believe that if neither the previous owner nor any other lien claimants step up to claim the funds, that the new owner has a right to make a claim for the surplus funds. This seems odd given that the new owner bought the property at auction (and this has title) and would then also get some (and in some cases, most) of the money they paid for the property back. Would a court actually grant that if no one else stepped forward to claim the surplus? 

Kaitlyn Jackson 

Sent from my iPhone

> On Sep 10, 2019, at 7:24 PM, Rod Harmon <rodharmon at msn.com> wrote:
> 
> I agree with your analysis and believe the court ought to be looking out for the foreclosed homeowner, but under the “you snooze, you lose” rule if the homeowner does not respond to the city’s motion, the city is likely to get money it is not entitled to.  So then the now-homeless person would be out the amount of the city’s windfall when what the guy really needs is some money to rent a place to live.  One more person who needn’t have been homeless.
>  
> Rod Harmon
>  
> RODNEY T. HARMON
>        Attorney at Law
>          P.O. Box 1066
>       Bothell, WA   98041
>      Tel:   (425) 402-7800
>      Fax:  (425) 458-9096
>     www.rodharmon.com
>    rodharmon at msn.com
>  
>  
>  
>  
> From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Scott Russon
> Sent: Tuesday, September 10, 2019 6:35 PM
> To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
> Subject: [WSBARP] Foreclosure Surplus Funds and Homestead - City Abatement Lien
>  
> Through code enforcement of local ordinances, a City abates code violations, obtains a money judgment for the costs of abatement and records a lien for these costs.  Thus, the City has a money Judgment and recorded Claim of Lien for abatement costs.  A year later the property is foreclosed by the mortgage company.  John Doe purchases the property at foreclosure sale leaving a surplus of funds that are deposited into the court registry ($24,000 - an amount that exceeds the City’s judgment/lien).  Per RCW 61.24.080, it appears the City can file a motion to request payment of its judgment/lien from the surplus funds.  However, I look at the homestead statute and am now thinking the funds will all go to the homeowners since this was their residence and the surplus amount is less than the $125,000 homestead exemption.  None of the exceptions under RCW 6.13.080 appear to apply to the City’s liens.  Am I correct?  I keep thinking that since this is a municipal lien, the homestead should not apply.  But I’m not seeing that in the statute.  Am I missing something?
>  
> Also, I assume the homeowner needs to file the motion to collect the surplus funds from the court registry.  But if the City files a motion for surplus funds first and the homeowner files no response, will the court enter an order to release funds if the homeowner fails to appear and/or fails to assert the homestead at or before the hearing?  Or would the City need to plead in its motion that the amounts they are seeking exceed the $125,000 homestead exemption in order to even get the a judge to release any funds.
>  
> Any thoughts would be appreciated.
>  
> Sincerely yours,
>  
> SCOTT E. RUSSON
> Attorney at Law
>  
> Yates Marshall, PLLC
> 10000 N.E. 7th Avenue, Suite 200
> Vancouver, WA 98685
> Phone: (360) 449-6100
> Fax:    (360) 449-6111
>  
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