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Subject: Super Lien
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Author Messages
KathyK4
(Washington)

Posts:4


08/08/2010 9:44 PM  
Does anyone have knowledge of the "Super Lien" statute that may or may not be in Washington State code? I have found a document, Fannie Mae Form 4318 listing "Acceptable State Superlien Statutes", but the RCW listed does not seem to come up in my searches. This statute is supposed to impact the priority of an HOA lien. Thanks in advance!
MaryA1


Posts:0


08/09/2010 8:12 AM  
Kathy,

I believe a "super lien" would have to be statutorily allowed. Check the WA state HOA statutes to determine if a super lien is provided for. Look for a statute titled "Lien for assessments", or something to that effect.

Following is an article written by two attorneys which explains the HOA super lien.


HOA Super Liens
by Janeen R. Hill, Esq. and Jonathan A. Goodman, Esq.

Question: I just bought a property through the foreclosure process. I expected that the foreclosure of the first deed of trust would extinguish all liens against the property, including delinquent homeowner's association fees. Now the association is claiming a lien for six months of assessments, plus the attorneys fees spent attempting to collect them. Didn't the foreclosure clear the HOA lien from the property?

Response: No, as confirmed by the recent Colorado Court of Appeals decision in First Atlantic Mortgage, LLC v. Sunstone North Homeowners Association, 2005 WL 427700 (Colo. App.).

Historically, HOA assessments were subordinate to the first deed of trust on a property, and had no recourse but to redeem if the senior deed of trust foreclosed on the property. The Colorado Common Interest Ownership Act ("CCIOA") was effective July 1, 1992. CCIOA is modeled on the Uniform Common Interest Ownership Act (the "Uniform Act"), some form of which has been enacted by more than 20 states. The Colorado version of the Uniform Act are in line with the Uniform Act as applied in other states, and so is the decision in First Atlantic.

The super-lien provision, Colorado Revised Statutes §38-33.3-316 authorizes the existence of a lien on a unit for

"any assessment levied against that unit or fines imposed against its owner. Unless the declaration otherwise provides, fees, charges, late charges, attorney fees, fines and interest charged pursuant to section 38-33.3-302(1)(j), (1)(k) and (1)(.), 313(6) and 315(2), are enforceable as assessments under this article".
This lien is given priority to the first deed of trust on the property to the extent of

"An amount equal to the common expense assessments based on a periodic budget adopted by the association under section 38-33.3-315(1) which would have become due, in the absence of any acceleration, during the six months immediately preceding institution by either the association or any party holding a lien senior to any part of the association lien created under this section of an action or a nonjudicial foreclosure either to enforce or to extinguish the lien."
What this means in practical terms, is that at a closing on the property after a foreclosure, the homeowner assessments will have to be paid. How much is owed?

In First Atlantic Mortgage, LLC v. Sunstone North Homeowners Association, 2005 WL 427700 (Colo. App.), the court held that the lien may be more than the assessments alone. The language of the statute is clear - that "assessments" may include fees, charges, late charges, attorney fees, fines and interest. The First Atlantic decision holds that the lien value has a cap of up to a total amount equal to six months of regular assessments, plus attorney fees, interest and other allowable items.

In light of this decision, lenders may think about escrowing for association assessments. Because of the inclusion of attorney fees, late charges, interest, and fines, the super-lien could wind up being larger than the amount of property taxes owed. Investors buying property through the foreclosure process, and any purchaser of an REO property should be aware of and manage the risks of the HOA super-lien.
TishS
(Washington)

Posts:116


08/09/2010 8:31 AM  
In Washington State, not all HOA fall under the Washington State RCW for HOA. It depends on the year of formation. Check with your HOA and find out whether they are subject to RCW 24.03. only. I believe the cutoff year is 1995.

I have not seen anything regarding super liens in either area but in any case it is important to know which RCW pertain to your HOA.
KarenT
(Washington)

Posts:225


08/09/2010 2:41 PM  
RCW 60.04.061

also see article
http://distressedrealestate.org/if-you-want-to-invest-in-foreclosures-you-need-to-understand-lien-priority/
SnakeP
(Washington)

Posts:41


09/18/2010 3:41 AM  
Posted By TishS on 08/09/2010 8:31 AM
In Washington State, not all HOA fall under the Washington State RCW for HOA. It depends on the year of formation. Check with your HOA and find out whether they are subject to RCW 24.03. only. I believe the cutoff year is 1995.




Could you please provide a source for this? We are in a Community Club that was formed in 1976.

However the Board is now stating we are a homeowners association.

A lot of the property owners are now very concerned about this as it is our understand that the Washington Homestead Act will not protect us from forced sales arising from HoA liens.

EdS10
(Washington)

Posts:3


10/06/2010 4:11 PM  
Washington State RCW's for Homeowners' associations come under Chapter 64.38 RCW
http://apps.leg.wa.gov/RCW/default.aspx?cite=64.38&full=true

Whereas Condominium act fall under Chapter 64.34 RCW http://apps.leg.wa.gov/RCW/default.aspx?cite=64.34

Chapter 24.03 RCW deals with Washington nonprofit corporation act
http://apps.leg.wa.gov/RCW/default.aspx?cite=24.03

MaryA1
(Arizona)

Posts:388


10/06/2010 4:51 PM  
The WA homeowner association statutes do not address assessment liens. Following is the section from the WA condo statutes; however I don't believe there is a super lien as the assessment lien is not prior to a mortgage.


RCW 64.34.364
Lien for assessments.

(1) The association has a lien on a unit for any unpaid assessments levied against a unit from the time the assessment is due.

(2) A lien under this section shall be prior to all other liens and encumbrances on a unit except: (a) Liens and encumbrances recorded before the recording of the declaration; (b) a mortgage on the unit recorded before the date on which the assessment sought to be enforced became delinquent; and (c) liens for real property taxes and other governmental assessments or charges against the unit. A lien under this section is not subject to the provisions of chapter 6.13 RCW.

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