SENATE BILL REPORT

SHB 1297

BYHouse Committee on Agriculture & Rural Development (originally sponsored by Representatives Rayburn, Nealey, Kremen and McLean)

Establishing procedures to foreclose on properties with delinquent payments of assessments.

House Committe on Agriculture & Rural Development

Senate Committee on Agriculture

Senate Hearing Date(s):February 19, 1988

Majority Report:  Do pass as amended.

      Signed by Senators Barr, Chairman; Anderson, Vice Chairman; Halsan, Hansen, Rinehart.

Senate Staff:Tom McDonald (786-7404)

                  February 19, 1988

AS REPORTED BY COMMITTEE ON AGRICULTURE, FEBRUARY 19, 1988

BACKGROUND:

In 1984 the Washington State Supreme Court held that the procedure for irrigation assessment foreclosures was constitutionally defective because it failed to provide notice and opportunity for a hearing.  Before any action can be taken against an interest in property, due process requires there to be notice reasonably calculated to notify parties who have an interest in the property and afford them an opportunity to present their objections.  Notice of foreclosure must be sent to interested parties by personal service or first class mail, describe the subject property with sufficient specificity, and set forth the time and place at which the property will be sold.  The irrigation district's foreclosure statute failed to require personal service or notice by mail and failed to require notice of the specific time and place of the sale.  Further, the foreclosure procedure failed to allow the interested parties an opportunity to object or contest the foreclosure at a hearing.

SUMMARY:

The irrigation district foreclosure law is repealed and a foreclosure procedure, designed to satisfy minimum constitutional requirements, is established.  This procedure, similar to the property tax foreclosure procedure, will require the following:

(1) After irrigation district assessments are delinquent for three years, the district will prepare a certificate of delinquency containing, among other things, the lien amount of the assessments, costs, and interest due.

(2) After preparing the certificate, the district will institute foreclosure proceedings and serve a "notice and summons" on each "party in interest." "Party in interest" is defined to include an occupant of the property, the owner of record, and other person having a financial interest of record in the property.  The notice and summons must include, among other things, the lien amount due, a description of the property, a direction that the party should appear and defend the foreclosure action or pay the lien amount due, and a notice that failure to appear or pay the amount due will result in a foreclosure sale of the property at a specified date, time and place.

(3) If the court finds for the district and renders a judgment of foreclosure, the district will have to publish a notice of sale at least ten days before the foreclosure sale.  The notice must specify, among other things, the property to be sold, the lien amount due, the place, date and time of the sale and that the sale will not take place if the amount due is paid at least one day before the date of the sale.

(4) At the foreclosure sale, the property will be sold to the "highest and best bidder", so long as the bid is for a minimum amount specified by the court in its foreclosure judgment. Amounts in excess of the lien amount due will be remitted to the owner of the property if requested by the owner.  Before receiving title, the purchaser will have to pay any property taxes, certain drainage or diking assessments and irrigation assessments that are due at the time of sale. The purchaser will be granted a treasurer's deed conveying the property clear of all encumbrances, except for the above taxes and assessments not due at the time of the foreclosure sale.  If the property is not sold, then title to the property will vest automatically in the irrigation district.

Irrigation districts and county treasurers are authorized to use the interlocal cooperation act as a means of providing for the combined foreclosure of delinquent property taxes and irrigation district assessments.

Appropriation:    none

SUMMARY OF PROPOSED SENATE AMENDMENTS:

It is clarified that the treasurer's deed will not be conveyed until the purchaser has paid all assessments and taxes due at the time of purchase.  The assessment obligations of the irrigation district, if the district becomes owner of foreclosed property, is clarified to require payment of assessments.

Revenue:    none

Fiscal Note:      available

Senate Committee - Testified: Jeanne Dickman, Washington Water Resources Association (for); Fred Saeger, Washington Association of County Officials (for)