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

Thu Sep 16 16:24:57 PDT 2021

I looked at this some time ago and found….

Priority of tax lien.
All taxes and levies which may hereafter be lawfully imposed or assessed are declared to be a lien respectively upon the real and personal property upon which they may hereafter be imposed or assessed, which liens include all charges and expenses of and concerning the taxes which, by the provisions of this title, are directed to be made. The lien has priority to and must be fully paid and satisfied before any recognizance, mortgage, judgment, debt, obligation, or responsibility to or with which the real and personal property may become charged or liable, except that the lien is of equal rank with liens for amounts deferred under chapter 84.37<http://app.leg.wa.gov/RCW/default.aspx?cite=84.37> or 84.38<http://app.leg.wa.gov/RCW/default.aspx?cite=84.38> RCW.

RCW 35.50.010<http://app.leg.wa.gov/RCW/default.aspx?cite=35.50.010>
Assessment lien—Attachment—Priority.
The charge assessed upon the respective lots, tracts, or parcels of land and other property in the assessment roll confirmed by ordinance of the city or town council for the purpose of paying the cost and expense in whole or in part of any local improvement, shall be a lien upon the property assessed from the time the assessment roll is placed in the hands of the city or town treasurer for collection, but as between the grantor and grantee, or vendor and vendee of any real property, when there is no express agreement as to payment of the local improvement assessments against the real property, the lien of such assessment shall attach thirty days after the filing of the diagram or print and the estimated cost and expense of such improvement to be borne by each lot, tract, or parcel of land, as provided in RCW 35.50.005<http://app.leg.wa.gov/RCW/default.aspx?cite=35.50.005>. Interest and penalty shall be included in and shall be a part of the assessment lien.
The assessment lien shall be paramount and superior to any other lien or encumbrance theretofore or thereafter created except a lien for general taxes.

RCW 35.67.200<http://app.leg.wa.gov/RCW/default.aspx?cite=35.67.200>
Sewerage lien—Authority.
Cities and towns owning their own sewer systems shall have a lien for delinquent and unpaid rates and charges for sewer service, penalties levied pursuant to RCW 35.67.190<http://app.leg.wa.gov/RCW/default.aspx?cite=35.67.190>, and connection charges, including interest thereon, against the premises to which such service has been furnished or is available, which lien shall be superior to all other liens and encumbrances except general taxes and local and special assessments. The city or town by ordinance may provide that delinquent charges shall bear interest at not exceeding eight percent per annum computed on a monthly basis: PROVIDED, That a city or town using the property tax system for utility billing may, by resolution or ordinance, adopt the alternative lien procedure as set forth in RCW 35.67.215<http://app.leg.wa.gov/RCW/default.aspx?cite=35.67.215>.

I think most of these types of liens, if not all, contain such language.

But see Pierce County v. Schwab 739 P.2d 116, 48 Wn.App. 418 (Wash. App. 1987)

Which puts a twist on things

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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Eric Nelsen
Sent: Thursday, September 16, 2021 1:34 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] liens/fines for code violations extinguished by property tax foreclosure?

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<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto: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<mailto: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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