Bill Text: OR SB300 | 2011 | Regular Session | Introduced

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Bill Title: Relating to communities governed by declaration.

Spectrum: Unknown

Status: (Failed) 2011-06-30 - In committee upon adjournment. [SB300 Detail]

Download: Oregon-2011-SB300-Introduced.html

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     76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 1059

                         Senate Bill 300

Printed pursuant to Senate Interim Rule 213.28 by order of the
  President of the Senate in conformance with presession filing
  rules, indicating neither advocacy nor opposition on the part
  of the President (at the request of Senate Interim Committee on
  Finance and Revenue)

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.

  Modifies provisions relating to enforcement of liens for
association assessments in planned communities and condominiums.

                        A BILL FOR AN ACT
Relating to communities governed by declaration; creating new
  provisions; and amending ORS 94.709 and 100.450.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 94.709 is amended to read:
  94.709. (1) Whenever a homeowners association levies any
assessment against a lot { +  or against an owner of a lot + },
the association   { - shall have - }   { + has + } a lien upon
the individual lot for any unpaid assessments. The lien { + :
  (a) + } Includes interest, late charges, attorney fees, costs
or other amounts imposed under the declaration or bylaws or other
recorded governing document.   { - The lien - }
   { +  (b) + } Is prior to a homestead exemption and all other
liens or encumbrances upon the lot except:
    { - (a) - }   { + (A) + } Tax and assessment liens; and
    { - (b) - }   { + (B) Subject to subsections (2) and (10) of
this section, + } a first mortgage { + , a land sale contract + }
or  { + a + } trust deed of record.
   { +  (2) Except with respect to assessments for fines, the
lien of the association under this section is prior to a first
mortgage, a land sale contract or a trust deed of record with
respect to assessments that would have become due during the six
months immediately preceding the date of:
  (a) A sheriff's sale in an action for judicial foreclosure of a
first mortgage;
  (b) A trustee's sale in a nonjudicial foreclosure of a first
trust deed; or
  (c) Recording of a declaration of forfeiture under a contract
for the conveyance or transfer of an interest in real property
under ORS 93.905 to 93.940. + }
    { - (2) - }   { + (3) + } Recording of the declaration
constitutes record notice and perfection of the lien for
assessments.   { - No further - } Recording of a claim of lien

for assessments or notice of a claim of lien under this section
is  { + not + } required to perfect the association's lien.
   { +  (4) Before the association may proceed with an action to
foreclose a lien under this section:
  (a) + } The association   { - shall record a notice of claim of
lien for assessments under this section in the deed records of
the county in which a lot is located before any suit to foreclose
may proceed under subsection (4) of this section. - }   { + must
present for recordation in the deed records of the county in
which the lot is located a notice of claim of lien for
assessments, verified by the oath of an individual having
knowledge of the facts; and
  (b) The county clerk must have recorded and indexed the notice
as other liens are recorded and indexed.
  (5) + } The notice   { - shall - }   { + must + } contain:
  (a) A true statement of the amount due for the unpaid
assessments after deducting all just credits and offsets;
  (b) The name of the owner of the lot, or reputed owner, if
known;
  (c) The name of the association;
  (d) The description of the lot as provided in ORS 93.600; and
  (e) A statement that if the owner of the lot thereafter fails
to pay any assessments when due, as long as the original or any
subsequent unpaid assessment remains unpaid, the unpaid amount of
assessments automatically   { - continue - }   { + continues + }
to accumulate with interest without the necessity of further
recording.
    { - (3) The notice shall be verified by the oath of some
person having knowledge of the facts and shall be recorded by the
county recording officer. The record shall be indexed as other
liens are required by law to be indexed. - }
    { - (4)(a) - }   { + (6) + }   { - The proceedings - }
 { + A proceeding + } to foreclose liens created by this section
 { - shall - }   { + must + } conform as nearly as possible to
 { - the proceedings - }   { + a proceeding + } to foreclose
liens created by ORS 87.010 except, notwithstanding ORS 87.055, a
lien may be continued in force for a period of time not to exceed
six years from the date the assessment is due. For the purpose of
determining the date the assessment is due in those cases when
subsequent unpaid assessments have accumulated under a notice
recorded as provided in subsection   { - (2) - }   { + (3) + } of
this section, the assessment and claim regarding each unpaid
assessment   { - shall be - }  { +  are + } deemed to have been
levied at the time the unpaid assessment became due.
    { - (b) - }   { + (7) + } The   { - lien may be enforced by
the - }  board of directors acting on behalf of the
association { +  may enforce a lien to collect unpaid assessments
under this section by bringing an action to foreclose the lien,
by bringing an action to recover a money judgment for unpaid
assessments or by accepting a deed in lieu of foreclosure in
satisfaction of the lien + }.
    { - (c) - }   { + (8) + } An action to recover a money
judgment for unpaid assessments { + :
  (a) + } May be maintained without foreclosing or waiving the
lien securing the claim for unpaid assessments.
   { +  (b) Operates to satisfy the lien, or the portion thereof,
for which recovery is made. + }
    { - (5) - }   { + (9) + } Unless the declaration or bylaws
provide otherwise, fees, late charges, fines and interest imposed
pursuant to ORS 94.630 (1)(L), (n) and (o) are enforceable as
assessments under this section.
    { - (6) This section does not prohibit an association from
pursuing an action to recover sums for which subsection (1) of
this section creates a lien or from taking a deed in lieu of
foreclosure in satisfaction of the lien. - }

    { - (7) An action to recover a money judgment for unpaid
assessments may be maintained without foreclosing or waiving the
lien for unpaid assessments. However, recovery on the action
operates to satisfy the lien, or the portion thereof, for which
recovery is made. - }
   { +  (10) Notwithstanding the priority established for a lien
for unpaid assessments and interest under subsection (1) of this
section, the lien is also prior to the lien of a first mortgage,
a land sale contract or a trust deed of record for the unit and
the undivided interest in the common elements, if:
  (a) The association has given the lender under the mortgage,
the land sale contract or the trust deed 90 days prior written
notice that the owner of the unit is in default in payment of an
assessment. The notice must contain:
  (A) Name of borrower;
  (B) Recording date of the mortgage, the land sale contract or
the trust deed;
  (C) Recording information of the mortgage, the land sale
contract or the trust deed;
  (D) Name of the planned community, the lot owner and the lot
designation stated in the declaration or applicable governing
document; and
  (E) Amount of unpaid assessment.
  (b) The notice under paragraph (a) of this subsection sets
forth the following in 10-point type:

________________________________________________________________

  NOTICE: The lien of the association may become prior to that of
the lender pursuant to ORS 94.709.

________________________________________________________________

  (c) The lender has not:
  (A) Initiated judicial action to foreclose the mortgage;
  (B) Caused to be recorded either a trustee's notice of sale
under the trust deed or a notice of default and election to sell;
or
  (C) Accepted a deed in lieu of foreclosure in the circumstances
described in ORS 100.465 prior to the expiration of 90 days
following the notice by the association.
  (d) The association has provided the lender, upon request, with
copies of any liens filed on the unit, a statement of the
assessments and interest remaining unpaid on the unit and other
documents that the lender may reasonably request.
  (e) The borrower is in default as to principal or interest
under the terms of the mortgage or trust deed.
  (f) A copy of the notice described in paragraph (a) of this
subsection, together with an affidavit of notice by an individual
having knowledge of the facts and reciting the date and the
individual to whom the notice was given, has been recorded in the
manner prescribed in subsection (4) of this section. + }
  SECTION 2. ORS 100.450 is amended to read:
  100.450. (1) Whenever an association of unit owners levies any
assessment against a unit, the association of unit owners
  { - shall have - }   { + has + } a lien upon the individual
unit and the undivided interest in the common elements
appertaining to   { - such - }   { + the + } unit for any unpaid
assessments. The lien { + :
  (a) + } Includes interest, late charges, attorney fees, costs
or other amounts levied under the declaration or bylaws.
 { - The lien - }  { +
  (b) + } Is prior to a homestead exemption and all other liens
or encumbrances upon the unit except:
    { - (a) - }   { + (A) + } Tax and assessment liens; and
    { - (b) - }   { + (B) Subject to subsections (2) and (12) of
this section,  + }a first mortgage { + , a land sale contract + }
or  { + a + } trust deed of record { + . + }   { - unless: - }
    { - (A) The condominium consists of fewer than seven units,
all of which are to be used for nonresidential purposes; - }
    { - (B) The declaration provides that the lien of any
mortgage or trust deed of record affecting the property shall be
subordinate to the lien of the association provided under
subsection (1) of this section; and - }
    { - (C) The holder of any mortgage or trust deed of record
affecting the property when the declaration is recorded executes
a separate subordination of the holder's interest to the
declaration which is attached as an exhibit and which states that
the holder understands that the declaration subordinates the
holder's lien to the assessment lien of the association provided
under subsection (1) of this section. - }
   { +  (2)(a) Subject to paragraph (b) of this subsection,
except with respect to assessments for fines, the lien of the
association under this section is prior to a first mortgage, a
land sale contract or a trust deed of record with respect to
assessments that would have become due during the six months
immediately preceding the date of:
  (A) A sheriff's sale in an action for judicial foreclosure of a
first mortgage;
  (B) A trustee's sale in a nonjudicial foreclosure of a first
trust deed; or
  (C) Recording of a declaration of forfeiture under a contract
for the conveyance or transfer of an interest in real property
under ORS 93.905 to 93.940.
  (b) Paragraph (a) of this subsection does not apply if:
  (A) The condominium consists of fewer than seven units, all of
which are to be used for nonresidential purposes;
  (B) The declaration provides that the lien of a mortgage, a
land sale contract or a trust deed of record affecting the
property is subordinate to the lien of the association under this
section; and
  (C) The holder of a mortgage, a land sale contract or a trust
deed of record affecting the property when the declaration is
recorded executes a separate subordination of the holder's
interest to the declaration that is attached as an exhibit and
that states that the holder understands that the declaration
subordinates the holder's lien to the assessment lien of the
association under this section. + }
    { - (2) - }   { + (3) + } Recording of the declaration
constitutes record notice and perfection of the lien for
assessments.   { - No further - } Recording of a claim of lien
for assessments or notice of a claim of lien under this section
is  { + not + } required to perfect the association's lien.
   { +  (4) Before the association may proceed with an action to
foreclose a lien under this section:
  (a) + } The association   { - shall record a notice of claim of
lien for assessments under this section in the deed records of
the county in which the unit is located before any suit to
foreclose may proceed under subsection (4) of this section. - }
 { + must present for recordation in the deed records of the
county in which the unit is located a notice of claim of lien for
assessments, verified by the oath of an individual having
knowledge of the facts; and
  (b) The county clerk must have recorded and indexed the notice
as other liens are recorded and indexed.
  (5)  + }The notice   { - shall - }   { + must + } contain:
  (a) A true statement of the amount due for the unpaid
assessments after deducting all just credits and offsets;
  (b) The name of the owner of the unit, or reputed owner, if
known;
  (c) The name of the condominium and the designation of the unit
as stated in the declaration or applicable supplemental
declaration; and

  (d) A statement that if the owner of the unit thereafter fails
to pay any assessments when due, as long as the original or any
subsequent unpaid assessment remains unpaid, the unpaid amount of
assessments automatically   { - continue - }   { + continues + }
to accumulate with interest without the necessity of further
recording.
    { - (3) The notice shall be verified by the oath of some
person having knowledge of the facts and shall be recorded by the
county recording officer. The record shall be indexed as other
liens are required by law to be indexed. - }
    { - (4)(a) - }   { + (6) + }   { - The proceedings - }
 { + A proceeding + } to foreclose liens created by this section
 { - shall - }   { + must + } conform as nearly as possible to
 { - the proceedings - }   { + a proceeding + } to foreclose
liens created by ORS 87.010 except, notwithstanding ORS 87.055, a
lien may be continued in force for a period of time not to exceed
six years from the date the assessment is due. For the purpose of
determining the date the assessment is due in those cases when
subsequent unpaid assessments have accumulated under a notice
recorded as provided in subsection   { - (2) - }   { + (4) + } of
this section, the assessment and claim regarding each unpaid
assessment   { - shall be - }  { +  are + } deemed to have been
levied at the time the unpaid assessment became due.
    { - (b) - }   { + (7) + } The   { - lien may be enforced by
the - }  board of directors acting on behalf of the association
of unit owners  { + may enforce a lien for unpaid assessments
under this section by bringing an action to foreclose the lien,
by bringing an action to recover a money judgment for unpaid
assessments or by accepting a deed in lieu of foreclosure in
satisfaction of the lien + }.
    { - (c) - }   { + (8) + } An action to recover a money
judgment for unpaid assessments { + :
  (a) + } May be maintained without foreclosing or waiving the
lien securing the claim for unpaid assessments.
   { +  (b) Operates to satisfy the lien, or the portion thereof,
for which recovery is made. + }
    { - (d) - }   { + (9) + } An action to foreclose a lien under
this section or recover a money judgment for unpaid assessments
may not be maintained unless the Condominium Information Report
and the Annual Report described in ORS 100.250 are designated
current as provided in ORS 100.255.
    { - (5) - }   { + (10) + } Unless the declaration or bylaws
 { - provides - }  { +  provide + } otherwise, fees, late
charges, fines and interest imposed pursuant to ORS 100.405
(4)(j), (k), (L) and (m) are enforceable as assessments under
this section.
    { - (6) - }   { + (11) + } With respect to condominium units
also constituting timeshare property as defined by ORS 94.803,
liens created by this section shall be assessed to the timeshare
owners in the timeshare property according to the method for
determining each owner's liability for common expenses under the
timeshare instrument and shall be enforced individually against
each timeshare owner in the condominium unit.
    { - (7) - }   { + (12) + } Notwithstanding the priority
established for a lien for unpaid assessments and interest under
subsection (1) of this section, the lien   { - shall also be - }
 { + is also + } prior to the lien of a first mortgage { + , a
land sale contract + } or  { + a + } trust deed of record for the
unit and the undivided interest in the common elements, if:
  (a) The association   { - of unit owners for the condominium in
which the unit is located - }  has given the lender under the
mortgage { + , the land sale contract + } or  { + the + } trust
deed 90 days prior written notice that the owner of the unit is
in default in payment of an assessment. The notice
 { - shall - }   { + must + } contain:
  (A) Name of borrower;
  (B) Recording date of  { + the mortgage, the land sale contract
or the + } trust deed   { - or mortgage - } ;
  (C) Recording information { +  of the mortgage, the land sale
contract or the trust deed + };
  (D) Name of  { + the + } condominium,  { + the + } unit owner
and  { + the + } unit designation stated in the declaration or
applicable supplemental declaration; and
  (E) Amount of unpaid assessment.
  (b) The notice under paragraph (a) of this subsection
 { - shall set - }   { + sets + } forth the following in 10-point
type:
_________________________________________________________________

  NOTICE: The lien of the association may become prior to that of
the lender pursuant to ORS 100.450.
_________________________________________________________________

  (c) The lender has not { + :
  (A) + } Initiated judicial action to foreclose the
mortgage { + ; + }   { - or requested issuance of - }
   { +  (B) Caused to be recorded + } a trustee's notice of sale
under the trust deed or  { + a notice of default and election to
sell; or
  (C) + } Accepted a deed in lieu of foreclosure in the
circumstances described in ORS 100.465 prior to the expiration of
90 days following the notice by the   { - unit owners' - }
association.
  (d) The   { - unit owners' - }  association has provided the
lender, upon request, with copies of any liens filed on the unit,
a statement of the assessments and interest remaining unpaid on
the unit and other documents   { - which - }  { +  that + } the
lender may reasonably request.
  (e) The borrower is in default  { + as to principal or
interest + } under the terms of the mortgage or trust deed  { -
as to principal and interest - } .
  (f) A copy of the notice described in paragraph (a) of this
subsection, together with an affidavit of notice by   { - a
person - }   { + an individual + } having knowledge of the
facts { +  and reciting the date and the individual to whom the
notice was given + }, has been recorded in the manner prescribed
in subsection   { - (3) - }   { + (4) + } of this section.
  { - The affidavit shall recite the date and the person to whom
the notice was given. - }
  SECTION 3.  { + The amendments to ORS 94.709 and 100.450 by
sections 1 and 2 of this 2011 Act apply to assessments levied on
or after the effective date of this 2011 Act. + }
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