Collection Options for Community Associations

Babak Shamsi Edmonds Lawyer

Community associations rely upon regular assessments and special assessments paid by their owners to address their collective common expenses. Sometimes, however, owners cannot pay their assessments.  Such unfortunate circumstances require community associations to review their options on how to collect the needed unpaid assessments.  

To understand a community association’s possible avenues for collection of assessments, board members must familiarize themselves with their association governing documents as well as the statutes applicable to their community.  Governing documents, and in particular, CC&Rs differ dramatically in the scheme of rights they afford associations as well as the restrictions they place upon associations.  For example, while some CC&Rs may permit nonjudicial foreclosure, others may not.  While some may permit the termination of utility services, still others may not.  In other words, it is critical to understand the powers afforded by the CC&Rs before beginning the collections process.

However, board members cannot stop their analysis at the governing documents.  They must understand the particular statute governing their communities.  While there are specific exceptions to the following rule of thumb, generally speaking:

  • RCW 64.32 governs condominiums formed prior to July 1, 1990;
  • RCW 64.34 governs condominiums formed between July 1, 1990 and June 30, 2018;
  • RCW 64.38 governs homeowners (not condominium) associations formed prior to July 1, 2018; and
  • RCW 64.90 governs homeowners and condominium associations formed on or after July 1, 2018.

These statutes have significant differences, including in the realm of collections.

For example, RCW 64.32 allows condominium associations to shut off utility services to a unit in the event the unit owner fails to pay assessments, provided the CC&Rs permit the same.  Subsequent statutes governing condominiums, however, do not contain this provision. 

On the other hand, RCW 64.34 allows condominium associations to collect up to six months of past due assessments against lenders, rather than the homeowners, prior to a lender foreclosure through the application of a super-priority lien.  RCW 64.90 expands this right by expressly permitting the recovery of certain attorney’s fees as well.  Most condominiums governed by RCW 64.32, however, do not have this super-priority lien, and are completely subordinate to a lender’s prior recorded deed of trust. 

Still other differences include the fact that RCWs 64.32 and 64.34 set a statute of limitations for condominium assessments at three years, while RCW 64.90 doubles the statute of limitations to six years.  Additionally, while condominiums governed by RCW 64.32 can adopt specific provisions of RCW 64.34, condominiums that wish to adopt RCW 64.90 must adopt the entire statutory scheme. It is critical to be familiar with these statutes.  These are only a handful of differences one can find between the statutes governing the collection of assessments by community associations, and the differences are significant.  If you need guidance with review of your governing documents, applicable statutes, and options for collection enforcement, the attorneys at Beresford Booth have the experience to assist you.  Please do not hesitate to contact us at info@beresfordlaw.com or by phone (425) 776-4100 for assistance.

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