Source: https://www.nolo.com/legal-encyclopedia/washington-dc-hoa-coa-foreclosures.html
Timestamp: 2018-07-20 16:38:35
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Washington D.C. HOA and COA Foreclosures | Nolo.com
If you live in a condominium, single-family house, or townhome that is part of a common interest community in the District of Columbia, you are most likely responsible for paying dues and assessments to a condominium association (COA) or homeowners’ association (HOA). If you don’t pay, the COA or HOA can usually get a lien on your property that could lead to a foreclosure.
Read on to learn more about COA and HOA foreclosures in Washington D.C.
COA and HOA Laws in Washington, D.C.
Washington, D.C.’s condominium laws can be found in Title 42, Subtitle III, Chapter 19 ( § § 42-1901.01 through 42-1904.18) of the District of Columbia Official Code. The statute applies to condominiums created after March 29, 1977. With limited exception, it also applies to most condos created before that date in regard to events and circumstances that occur after that date.
HOAs are controlled by their governing documents, which include the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and bylaws. The specific rules regarding assessments liens can commonly be found in these governing documents. (You should have received copies of the CC&Rs and bylaws when you purchased your property. Find out more about what's in your HOA CC&Rs and other relevant documents in Nolo’s article Before Buying: How to Read the CC&Rs or Homeowners' Association (HOA) Documents.)
A COA or HOA typically has the power to place a lien on your property if you get behind in monthly dues and/or any special assessments (collectively referred to as assessments). Often, once you fall behind in paying the assessments, a lien will automatically attach to your property.
In Washington, D.C., a COA is entitled to a lien on a condo for any unpaid assessments from the time the assessment becomes due. If an assessment is payable in installments, the full amount of the assessment is a lien from the time the first installment becomes due and payable (D.C. Code § 42-1903.13(a)).
The recording of the COA’s governing documents (that is, the CC&Rs and bylaws) in the county records constitutes record notice and perfection of the lien. The COA doesn't have to record the lien in the county records in order for it to be effective (D.C. Code § 42-1903.13(b). (In some states, the COA must record the lien.)
If you are part of an HOA, check the association’s CC&Rs and bylaws to learn about the association’s right to place a lien on your home if you don’t pay the assessments.
State law and the COA or HOA’s governing documents will usually set out the type of charges that the association may impose in addition to the past-due assessments. In the District of Columbia, a COA may impose:
interest at the rate of 10% per year or the maximum amount allowed for first mortgages in the District of Columbia (D.C. Code § 42-1903.12(e)).
To find out which charges an HOA in the District of Columbia may include in its lien, check the association's governing documents.
In Washington, D.C., COA liens are prior to all other liens and encumbrances, except for:
liens for real property taxes (or municipal assessments against the unit), and
a first mortgage or first deed of trust on the condo that was recorded before the assessment became delinquent (D.C. Code § 42-1903.13(a)(1)). (Learn more about the difference between mortgages and deeds of trust.)
To find out the priority of an HOA lien in the District of Columbia, check the association’s governing documents. (In many instances, an HOA’s CC&Rs will state that a lender’s first mortgage or deed of trust is superior to an HOA lien).
In certain states, a lien for delinquent common expense assessments has priority over even a lender’s first mortgage. This is called a super lien. (Learn more in Nolo’s article Homeowners’ Association Super Liens.)
In the District of Columbia, a COA is entitled to a super lien over a first mortgage or first deed of trust recorded before the date on which the assessment became delinquent in an amount equal to six months worth of common expense assessments (D.C. Code § 42-1903.13(a)(2)).
If you make a written request to the COA, the association must provide you with a statement of the amount of unpaid assessments within ten days after receiving your request. If the COA does not provide the statement within this time period, the lien is extinguished (eliminated) (D.C. Code § 42-1903.13(h)).
COA and HOA Foreclosures in Washington, D.C.
In the District of Columbia, a COA may foreclose its lien nonjudicially (which means the foreclosure takes place without court supervision) unless the COA’s governing documents prohibit nonjudicial foreclosures (D.C. Code § 42-1903.13(c)(1)). (Learn more about judicial v. nonjudicial foreclosures.)
COA Nonjudicial Foreclosure Procedures
Thirty days before a foreclosure sale, the COA must mail a notice to the condo owner that specifies:
the amount of any past-due assessments plus any accrued interest or late charge as of the date of the notice, and
that if the past-due amounts are not paid within 30 days after the date the notice is mailed, the condo will be sold at a public sale at the time, place, and date stated in the notice. (D.C. Code § 42-1903.13(c)(4)).
The sale date cannot be sooner than 31 days from the mailing date of the notice (D.C. Code § 42-1903.13(c)(5)).
In addition, the notice must be published in a newspaper of general circulation in the District of Columbia on at least three separate days during the 15-day period before the sale date (D.C. Code § 42-1903.13(c)(5)).
A condo owner has the right to cure a default in assessment payments at any time prior to the foreclosure sale by making full payment of past due assessments, plus any late charge, interest due, and reasonable attorney's fees and costs incurred in connection with the enforcement of the lien (D.C. Code § 42-1903.13(c)(2)).
Unless the COA starts the foreclosure (or sues the condo owner personally for payment) within three years from the date the assessment became due, the lien will be extinguished (D.C. Code § 42-1903.13(e)). This is called the statute of limitations.
To find out about an HOA’s right to foreclose if you become delinquent in paying the assessments, read the association’s governing documents.
What to Do if You Are Facing Foreclosure by a COA or HOA in Washington, D.C.
If you are facing a COA or HOA foreclosure, you should consult with an attorney licensed in Washington, D.C. to discuss all legal options available in your particular circumstances. (See our HOA Foreclosure topic page for articles on HOAs, possible options to catch up if you are delinquent in payments, how bankruptcy can help discharge dues, HOA super liens, and more.)