Things can get ugly when homeowners (members) fail to pay their assessments.

BUT every common interest community (CIC) should have a collection policy that standardizes the approach to resolving past due accounts.  Assessment revenue is the lifeblood that funds your operating expenses!  Please do not assume that you need to hire an attorney to collect on behalf of your community.  Attorneys are not debt collectors.  At least consider an approach where you pay nothing up front. 

• Attorneys acting on behalf of secured parties in non-judicial foreclosure proceedings are not debt collectors.  Reference this blog re: Obduskey vs. McCarthy & Holthus LLP decided March 20, 2019 by the US Supreme Court.

• Accurate records make all the difference.  See Villa Marina Association Of Apartment Owners v. Collins (Washington Court of Appeals 10/2021)

State statutes vary greatly regarding collections and foreclosure.  In Washington State, recent House Bills 1482, 1349 and 1686 became effective May '21 and July '23 for all WA CIC statutes: RCW 64.90.485, 64.34.364, 64.38.100 and 64.32.200.  

The updated requirements to foreclose a lien are as follows: 

• (a) The unit owner, at the time the action is commenced, owes at least a sum equal to the greater of:

  • (i) Three months or more of assessments, not including fines, late charges, interest, attorneys' fees, or costs incurred by the association in connection with the collection of a delinquent owner's account; or

  • (ii) $200 of assessments, not including fines, late charges, interest, attorneys' fees, or costs incurred by the association in connection with the collection of a delinquent owner's account;

• (b) At or after the date that assessments have become past due for at least 90 days, the association has mailed, by first-class mail, to the owner, at the unit address and to any other address which the owner has provided to the association, a notice of delinquency (view EXAMPLE below)

• (c) at least 180 days to have elapsed from the date the minimum amount required in (a) of this subsection has accrued; and

• (d) The board approves commencement of a foreclosure action specifically against that unit.

  • Every aspect of a collection, foreclosure, sale, or other conveyance under this section, including the method, advertising, time, date, place, and terms, must be commercially reasonable.  What's commercially reasonable?  Reference this blog about the Delaware Supreme Court decision from March 2017 in The Williams Companies, Inc. v. Energy Transfer Equity, L.P.