Once an association obtains a judgment against a delinquent owner, a myriad of options become available to collect on that judgment. We'll spend some time discussing many of these options in the coming weeks. Today, let's talk about judgment liens.
First, what is a judgment and what is a lien? A judgment is a court order in a lawsuit which states that the defendant (also known as the judgment debtor) owes a particular amount to the plaintiff (the initiating party) in that lawsuit. So in the case of an association lawsuit for monies due (and judgments can be obtained in foreclosure lawsuits, too), an association would obtain a judgment against the delinquent owner, stating exactly how much the owner owes the association as of the date of the judgment.
A lien is a recorded document that demonstrates that someone has a security interest in a piece of real property or real estate. A common example of a lien is that when you borrow money from a bank to buy your home, the bank records a deed of trust, which is a lien against your property. That is how the bank secures its interest in your property. You get the money to buy the property, and the bank gets a lien against your property to secure the loan. Association liens are similar, except that they do not have to be recorded in order to be "perfected." An association lien springs into being the moment an owners falls behind on their dues. (But association liens should most often be recorded anyways, for reasons too lengthy to discuss in this article!)
So what is a judgment lien? Let's say you have a delinquent owner in your association, and the association obtains a judgment against that owner. The association can then record that judgment as a lien against any real estate owned by the judgment debtor in Washington State. Recording a judgment lien means, at a minimum, that if the owner ever wants to sell the property against which the lien is recorded, they have to satisfy (pay off) the lien before they can do so.
And if the judgment debtor owns real estate in the same county in which the association obtained its judgment, the judgment automatically attaches as a lien against that property. There are many valid reasons for actually recording the judgment lien anyways, so keep that in mind next time your association attorney advises you that a judgment lien should be recorded.
So there you have it - the ABCs of a judgment lien. We'll cover other options available to association with a judgment against a delinquent owner in the future, including garnishment of bank accounts and/or wages. In the meantime, if you have any questions we can answer, please feel free to leave a comment or contact us directly. We look forward to continuing this conversation with you in our future posts!