SENATE BILL REPORT

SB 6162

BYSenators Pullen, Talmadge, Zimmerman, Newhouse and Niemi

Changing provisions relating to homestead exemptions.

Senate Committee on Law & Justice

Senate Hearing Date(s):January 12, 1988; January 27, 1988

Majority Report:  That Substitute Senate Bill No. 6162 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Pullen, Chairman; McCaslin, Vice Chairman; Halsan, Hayner, Madsen, Nelson, Newhouse, Niemi, Talmadge.

Senate Staff:Lidia Mori (786-7418)

                  January 27, 1988

AS REPORTED BY COMMITTEE ON LAW & JUSTICE, JANUARY 27, 1988

BACKGROUND:

The Homestead Act protects a homestead from attachment and from forced sale for the debts of the owner up to $30,000 or the total net value of the lands, mobile home, and improvements, whichever is less.  There are currently four exceptions to this protection.

People who purchase a condominium or home and belong to a condominium or homeowners association generally purchase the property subject to an agreement to pay assessments to the association.  Typically, these assessments are for maintenance work.  There have been instances where an association member has become delinquent in paying the assessments and the association is unable to exercise the option of foreclosure due to the protection afforded by the Homestead Act.

SUMMARY:

A new exception to the protection of the Homestead Act is added.  It allows a condominium or homeowners association to satisfy a judgment obtained against a member who has become delinquent in the payment of assessments.  The member must have purchased their property subject to an agreement to pay such assessments.  The condominium or homeowners association has the option of pursuing a forced sale.

EFFECT OF PROPOSED SUBSTITUTE:

The homestead exemption is not available against a forced sale in satisfaction of judgments obtained on debts secured by a condominium's or homeowner association's lien.  The association must provide a homeowner with notice that nonpayment of debts owed to the association may result in foreclosure of the association's lien.  The association must give this notice prior to beginning a judicial foreclosure action.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested January 11, 1988

Senate Committee - Testified: Gary Ackerman, attorney; Barbara Peterson, attorney; Greg Bass, Evergreen Legal Services