Recently, the Division 1 Court of Appeals of Washington issued its opinion in the case of Viewcrest Condominium Association v. Robertson, 2016 WL 7470025 (December 27, 2016). The decision by the Court in Viewcrest will need to be considered when evaluating collection of delinquent condominium assessments in Washington.

In Viewcrest, the condo association utilized judicial foreclosure to enforce its lien for delinquent assessments owed by Robertson.  It obtained a judgment and order of foreclosure, bid and purchased Robertson's unit at the sheriff's sale (i.e. the auction), and then offered Robertson the option to remain in the unit during the one-year redemption period in exchange for rent payments. Receiving no response, the association obtained a writ from the court to force Robertson out of her unit.  Roberson took issue, arguing that Washington law guarantees her right to remain in her unit until the end of the redemption period following the judicial foreclosure.

The Division 1 Court of Appeals of Washington agreed with Robertson, and decided that she could stay in her unit, rent free, after the foreclosure during the redemption period.  A "redemption period" is the period of time, which can be up to 12 months after the sheriff's sale, that the debtor has to pay the full balance of certain past-due amounts and costs to "redeem," or save, their ownership interest in the property.  The right of redemption is part of a bundle of rights and protections under Homestead and Redemption laws that safeguard owners from being (easily) separated from their home and equity.

However, RCW 64.34.364(2) of the Washington Condo Act states that the condominium's lien for assessments is not subject to the homestead protections found at Chapter 6.13 RCW of the Condo Act.  Whether this meant all the homestead and redemption protections, or just certain monetary protections, was argued to and answered by the court in Viewcrest.  As stated above, the court held that a condominium owner occupying the condo unit as their primary residence at the time of judicial foreclosure of the association's lien "has the right to possession during the redemption period, with no obligation to pay for the value of the occupation."  The decision is not a good result for new act condominium associations.

With the Viewcrest opinion now law in Division 1 (and persuasive authority everywhere else in Washington), new act condominium associations should reassess certain collection and foreclosure options. For example, dues acceleration provisions may become increasingly important, as will be the decision of whether to utilize judicial or non-judicial foreclosure.

This article and the case it examines concerns Washington law and new act condominiums in Washington.  It also sheds light on how these issues might impact condominiums formed under the Horizontal Property Regimes Act in Washington.  However, the Oregon Condominium Act, like the Washington Condominium Act, contains an exception to that state's homestead exemption for certain association liens, but we caution from reading too much into this similarity, because there are many factors that guided the Viewcrest court as well as many differences in the laws between the two states.  Thus, this article does not comment on how these same issues might be analyzed in Oregon.

If you have questions about this case, collections in general, or anything else related to community associations, Barker Martin's assessment collection program, litigation, insurance and general counsel divisions are here to help.

Co-written by Alexis Ducich