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</o:shapelayout></xml><![endif]--></head><body lang=EN-US link="#0563C1" vlink="#954F72"><div class=WordSection1><p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'>Well now I read the Summerhill summary and I get a different take on this. If the lender, CitiMortgage was notified of the non-payment of HOA dues and was also notified of the redemption period after the Sheriff’s Sale, then it looks like they were certainly not “diligent” in protecting their interest and it is now gone, at least as far as the security goes. <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'>Am I reading this correctly?<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'>Here is the Summerhill Village summary: </span>Date: March 27, 2012 / Author: Larry Glosser / Categories: <a href="http://www.ac-lawyers.com/news/category/liens-bond-claims">Liens/Bond Claims</a> / <a href="http://www.ac-lawyers.com/news/2012/03/27/super-priority-lien-of-homeowners-associations#comments">Comments (0)</a> / <a href="http://www.ac-lawyers.com/news/2012/03/27/super-priority-lien-of-homeowners-associations">Back to Blog</a> <span style='font-size:12.0pt;font-family:"Times New Roman",serif'><o:p></o:p></span></p><p>In <i><a href="http://www.courts.wa.gov/opinions/?fa=opinions.disp&filename=664557MAJ">Summerhill Village Homeowners Association v. Roughly and JP Morgan Chase Bank</a></i>, the Washington State Court of Appeals upheld a foreclosure sale of a condominium unit based on the homeowner's failure to pay Homeowner's Association ("HOA") assessments over the claims of the first lien lender's mortgage lien. By statute, a condominium association or HOA has a "super" priority lien over all other liens where the homeowner failed to pay HOA assessments for six months. In most cases, when a lender is notified of a foreclosure for the unpaid HOA assessments, the lender pays the six months of past assessments (the super-lien amount) and preserves its position as the first lien holder. In this case, the lender's lien was recorded in 2006 but the delinquent assessments did not accrue until 2008. Yet, the six months of unpaid HOA assessments in 2008 had a super priority over the 2006 mortgage lender. <o:p></o:p></p><p>In this case, the lender, after being notified of the pending foreclosure by the homeowner's association, failed to pay the six months of past HOA assessments. Consequently, the HOA foreclosed and the unit was sold at auction to a third party for $10,302.00. After the sale, the lender attempted to invoke redemption rights, which allow certain persons or entities (including junior lien holders who acquired a lien "subsequent in time" to the foreclosing lien) to redeem the property by payment to the successful bidder of that bidder's costs. However, the appellate Court held that since the lender's deed of trust was recorded in 2006, it was not "<i>subsequent </i>in time" to the super priority lien that arose in 2008. Thus, the Court denied the lender the right to redeem the property and ruled that its interest had been extinguished at the Sheriff's sale. The court stated that "[w]e will not rewrite the redemption statute because a lienholder's lack of diligence had unexpected consequences."<o:p></o:p></p><p>The lesson in this case is that the first position lien holder can lose its rights to a foreclosing HOA for lack of diligence–failing to pay the mere six months of past HOA assessments.<o:p></o:p></p><div class=MsoNormal align=center style='text-align:center'><hr size=3 width="100%" align=center></div><p class=MsoNormal><a name=comments></a><span style='font-size:12.0pt;color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'><o:p> </o:p></span></p><div><p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'>James R. Doran<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'>Attorney at Law<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;color:#1F497D'>100 E. Pine Street – Suite 205<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;color:#1F497D'>Bellingham, WA 98225<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;color:#1F497D'>(360)393-9506<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;color:#1F497D'><a href="mailto:jim@doranlegal.com"><span style='color:#0563C1'>jim@doranlegal.com</span></a><o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;color:#1F497D'>www.doranlegal.com<o:p></o:p></span></p></div><p class=MsoNormal><span style='font-size:12.0pt;color:#1F497D'><o:p> </o:p></span></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com] <b>On Behalf Of </b>Kathryn R. McKinley<br><b>Sent:</b> Tuesday, February 24, 2015 2:54 PM<br><b>To:</b> WSBA Real Property Listserv<br><b>Subject:</b> Re: [WSBARP] Condo HOA Lien Foreclosure<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><span style='color:#1F497D'>Actually, if the condominium was formed under the Washington Condominium Act, the COA may have a super priority lien over CitiMortgage for assessments in the 6 months preceding foreclosure. See <u>Summerhill Village Homeowners Association v. Roughly</u>. I believe it is a 2012 case. <o:p></o:p></span></p><p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p><div><p class=MsoNormal><span style='font-size:14.0pt;font-family:"Monotype Corsiva";color:#1F497D'>Kathryn R. McKinley<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:9.0pt;font-family:"Arial",sans-serif;color:#1F497D'>Of Counsel<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'><img border=0 width=171 height=23 id="Picture_x0020_1" src="cid:image001.jpg@01D05047.1F3791E0" alt=PHEmailLogo></span><span style='font-size:12.0pt;font-family:"Times New Roman",serif;color:#1F497D'><br></span><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'>717 W. Sprague Ave. Suite 1200<br>Spokane, WA 99201<br>(509) 455-6000</span><span style='font-size:14.0pt;font-family:"Monotype Corsiva";color:#1F497D'><o:p></o:p></span></p><p class=MsoNormal><u><span style='font-size:12.0pt;color:#1F497D'><a href="mailto:kathryn.mckinley@painehamblen.com"><span style='color:blue'>kathryn.mckinley@painehamblen.com</span></a><o:p></o:p></span></u></p><p class=MsoNormal><b><span style='font-size:12.0pt;color:#C00000'><o:p> </o:p></span></b></p><p class=MsoNormal><b><i><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'>This message is private or privileged. If you are not the person for whom this message is intended, please delete it and notify me immediately, and please do not copy or send this message to anyone else.</span></i></b><b><i><span style='font-size:12.0pt;font-family:"Times New Roman",serif;color:#1F497D'> <o:p></o:p></span></i></b></p></div><p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p><div><div style='border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Tahoma",sans-serif'>From:</span></b><span style='font-size:10.0pt;font-family:"Tahoma",sans-serif'> <a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a> [<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">mailto:wsbarp-bounces@lists.wsbarppt.com</a>] <b>On Behalf Of </b>Rich Holland<br><b>Sent:</b> Tuesday, February 24, 2015 2:32 PM<br><b>To:</b> WSBA Real Property Listserv<br><b>Subject:</b> Re: [WSBARP] Condo HOA Lien Foreclosure<o:p></o:p></span></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><span style='color:#1F497D'>That is awesome, but I doubt it. Look at the governing documents of the Condo. They almost ALWAYS subordinate COA liens to the first mortgage.<o:p></o:p></span></p><p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> <a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a> [<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">mailto:wsbarp-bounces@lists.wsbarppt.com</a>] <b>On Behalf Of </b>Jim Doran<br><b>Sent:</b> Tuesday, February 24, 2015 1:46 PM<br><b>To:</b> 'WSBA Real Property Listserv'<br><b>Subject:</b> [WSBARP] Condo HOA Lien Foreclosure<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><span style='font-size:12.0pt'>I do not do much condo work so here is a question for you all.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt'>The condo owner did not pay his HOA dues and a sheriff’s sale was done. The purchaser at the sheriff’s sale has brought in a quote from somewhere saying that “in some states” the HOA liens are considered “super priority liens”. The quote further says that if the HOA forecloses the super line, such as in this case, it may eliminate the first mortgage. In this case CitiMortgage has a $60,000 mortgage. <o:p></o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt'>Does the foreclosure and Sheriff’s Sale brought by the HOA for dues eliminate the CitiMortgage underlying DOT and Note?<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt'>Thanks.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt'>(My instincts say “No, it does not”.)<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt'>James R. Doran<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:12.0pt'>Attorney at Law<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt'>100 E. Pine Street – Suite 205<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt'>Bellingham, WA 98225<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt'>(360)393-9506<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt'><a href="mailto:jim@doranlegal.com">jim@doranlegal.com</a><o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt'><a href="http://www.doranlegal.com">www.doranlegal.com</a><o:p></o:p></span></p><p class=MsoNormal><o:p> </o:p></p></div></body></html>