Unless your declarations says otherwise, there is no reason you cannot file a lien on the property just because you've written a letter and sent it to a collection agency. That's just laziness on the part of your management company. Contact your county clerk of the court and ask for a form to file a lien for the amount outstanding including any future monthly fees, management fees and attorney's fees. Some have a letter that must be stated in a certain way. Either way, they can tell you what to do. It can be signed by the Board president or treasurer and mailed to the clerk of courts.
When the bill is paid, you send a copy of that form/letter to the clerk of courts indicating the outstanding fees are paid in full. That removes the lien.
I see no reason not to be able to file a lien even though you have sent the debt to a collection company. The lien makes your case a little stronger will all collection activities. I would copy the bank on any actions to keep them informed. Often these funds have been escrowed in advance and may be held by the bank until the HOA comes forward to them to collect. Banks will try to keep the escrow to pay their attorney's fees instead of paying HOA fees to help their bottom line unless you make them aware you are out there and are demanding payment. In Texas, you can foreclose before the bank and push the bank into a second position with very few rights, but then that's Texas.
After foreclosure, the bank will owe all the fees past, present and future as the owner of the property, but will often not pay until they liqudate the property unless you press them to do so. The title company will collect on liqudation to be able to provide clear title to the property, but that can take years in some states.
Time to hire an attorney and a new property management company. I feel your pain!
This is exactly where associations get devastated in California. It doesn't matter if we place a lien on the property because the lien is extinguished by the foreclosure because the bank is in the first lien position. When the property auctions, California only requires that the winning bidder (usually an unscrupulous investor) pay the back property taxes but says nothing about the back HOA fees. California ensures that they get their money but the associations get screwed. The State’s complete lack of understanding the cause and effect of this has is causing massive problems in California. Our Association has had three units auction and we had a lien on two of them, but the liens were extinguished by the foreclosure and we got nothing.
California says they want to stem the State’s foreclosure crisis, but the State is part of the problem. By allowing these liens to be extinguished, that debt has to then be absorbed by the rest of the association. Associations simply can’t afford this and have to raise their fees dramatically. Folks who were not in trouble with their mortgage then get into trouble because their HOA fees have tripled to cover the cost of these foreclosure and many of these owners then end up in foreclosure.
What California legislature wouldn’t push to fix this if it were brought to their attention? I have contacted the Community Association Institute (California Legislative Action Committee) and they didn’t know of any legislation being developed or of anyone even trying to get this to the State’s attention. I would have thought their very name would mean that THEY would be pushing for this, but apparently not.
For almost everyone, their biggest monthly bill is their mortgage. The real crime in this is that when folks stop paying their mortgage, they can certainly afford to pay their HOA dues, but they just unabashedly walk away. It’s shameful.
Double whew! Nothing to add, but as Secy/Treas of my HOA, know the trials and tribulations. Hang in there.
For owner meetings you can use proxies to get your quorum and to vote. Check it out in your condo governing documents and/or Washington law. You may not need receivership if you start using proxies to follow the procedures in your governing docs (for meetings, elections, and all that follows). Good luck with it!
I would suggest you do a couple of things:
1. Find out who the Statutory Agent is for your Association. It should be your attorney not your property management company because the attorney would know to respond to all foreclosure filings so your HOA's interest can be established since the mgt company is useless. It's not too late for they to respond.
2. While you will in most cases never be in 1st lien position the mortgage company, and taxes will come out first and then you may get a small amount.
3. Since she has moved out of state you are going to have a heck of a time collecting and will probably get nothing.
4. Hopefully the mortgage company will buy the unit back then they become responsible for the fees but most of them are now doing nothing and not buying the property back and the owner continues to pile up fees and the unit just sits empty.
5. I would contact the mortgage company and let them know the property is unit is vacant so they can winterize and secure the unit. I'm sure their Property Preservation department has already been out to check for occupancy. You need to demand they turn on gas and electric.
6. If they owner was still in town I'd say do a debtor's exam in court but since they have moved you can turn it over to collection.
While it's too late now for what you should have done, I think your Board needs to come up with a set collection and delinquency policy. What do your documents say about when demand letters go out and when liens are filed? Your monthly financials should show delinquency by unit, the total past due, and the last payment date and amount posted to you know who is behind.
Thank you all for the responses. Yesterday I contacted an attorney, getting them off of the card today revoking their rights to pay bills or accept money on our behalf.
Since they refuse to give up our records that they have been keeping on the associations behalf for 3 years now we are taking them to court to get our records back and of course having them audited.
Bylaws state nothing about demand letters or when liens are filed. Management company wont even let the homeowners see their complete ledgers so we truly don't know how much anyone owns at this point.
Actually we have no policies at all.
"Find out who the Statutory Agent is for your Association." I looked at the website to see who our registered agent is and it IS the management company and has been since the board was turned over to the association. So I guess next step to figuring out how to get them removed and how to get someone as the agent is the next step.
Also found out that the declarant terminated his rights that he turned the association with a negative balance and they didnt audit them. They stepped down and let the management company handle things and thats why we are in the position now.
Our association was born in 2006 turned over in 2008, turned over in the negative to the homeowners. I fault us as homeowners for not knowing what was going on. But I fault the the previous board for puting things in managements hands and not notifying anyone that they stepped down.
Out of 3 members voted in at the January 2011 meeting 2 remain. Unfortunately for the MC I know how to handle things and not afraid to get my hands dirty and thanks to you guys on this forum I can now I have found great guidance. The President of the B.O.D. truly do appreciate the help.
Actually I have a question that might solve all of my problems because its causing great confusion...
According to governing documents All Owners=Association=Board=Board of Directors who appoints the direcors. According to the minutes he Turned the association over to the Board of Directors and Resigned from the Association as well? Does that even make sense? Is it legal to Resign from the Association itself and if you choose to Resign from the association itsself?
Can't find anything in case law or RCW's regarding this one.
I found a few points of law for you and your attorney to consider.
Association records — Funds.
(1) ... all financial and other records of the association...are the property of the association, but shall be made reasonably available for examination and copying by the manager of the association, any unit owner, or the owner's authorized agents.
Also, RCW 64.34.312, Control of association — Transfer
...(2) Upon the transfer of control to the unit owners, the records of the association shall be audited...to determine if expenditures were for association purposes and the billings, cash receipts, and related records to determine if the declarant was charged for and paid the proper amount of assessments.
There is other stuff in there about the transfer. You are on the right path. Good luck!