[WSBARP] liens/fines for code violations extinguished by property tax foreclosure?

[Eric Nelsen]

I didn’t get any replies but got some information from a retired colleague—the short version is, it’s unclear. Slightly longer version: see attached law review article, with the caveat that the statutes have been amended since it was published so its analysis may not hold completely true, but at least is a starting point.

Despite the early doctrine that a property tax foreclosure results in a brand-new title direct from the government free of all prior encumbrances, there is a statutory exception for easements and covenants which will remain on the property, and also some court-case carve-outs that appears to preserve LID and similar assessments, and “demolition liens” when the city/county incurs expenses removing a nuisance before the property is sold.

So, is a judgment grounded in civil fines for code violations (nuisance) removed by a property tax foreclosure? I dunno.

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Kaitlyn Jackson
Sent: Tuesday, September 14, 2021 3:14 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] liens/fines for code violations extinguished by property tax foreclosure?

Following...

On Tue, Sep 14, 2021 at 2:35 PM Eric Nelsen <eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>> wrote:
Are a City/County’s recorded lien for fines related to building code violations extinguished in a property tax foreclosure?

I know the general rule is that a property tax foreclosure results in “fresh title” free of all encumbrances except for appurtenant easements and restrictive covenants in place at the time the property tax accrued. City of Olympia v. Palzer, 107 Wn.2d 225, 728 P.2d 135 (1986); RCW 36.36.290<https://app.leg.wa.gov/RCW/default.aspx?cite=36.35&full=true#36.35.290>.

But is there an exception buried in the statutes somewhere, that allows governmental fines to survive the foreclosure? Or perhaps, do those fines get added to the minimum bid necessary to purchase at the tax foreclosure?

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

Covid-19 Update - All attorneys are working remotely during regular business hours and are available via email and by phone. Videoconferencing also is available. Signing of estate planning documents can be completed and will be handled on a case-by-case basis. Please direct mail and deliveries to the Seattle office.

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