73rd OREGON LEGISLATIVE ASSEMBLY--2005 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 1310
 
                         Senate Bill 902
 
Sponsored by Senator B STARR (at the request of Legislative
  Action Committee of Community Associations Institute Oregon
  Chapter)
 
 
                             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.
 
  Revises provisions relating to liens for unpaid assessments
levied by planned community homeowners association or condominium
unit owners association.
 
                        A BILL FOR AN ACT
Relating to liens on properties governed by declarations;
  amending ORS 94.709, 94.723, 100.450, 100.465 and 100.475.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 94.709 is amended to read:
  94.709. (1) { + (a) + } Whenever a homeowners association
levies any assessment against a lot, the association shall have a
lien upon the individual lot for any unpaid assessments. The lien
includes interest, late charges, attorney fees, costs or other
amounts imposed under the declaration or bylaws or other recorded
governing document. The lien is prior to a homestead exemption
and all other liens or encumbrances upon the lot except:
    { - (a) - }   { + (A) + } Tax and assessment liens;
 { - and - }
   { +  (B) Liens and encumbrances recorded before the recording
of the declaration or applicable supplemental declaration or
other instrument subjecting the lot to the jurisdiction of the
association; and + }
    { - (b) - }   { + (C) + } A first mortgage or trust deed
 { - of record - }  { +  recorded after the recording of the
declaration or applicable supplemental declaration or other
instrument subjecting the lot to the jurisdiction of the
association, to the extent provided under paragraph (b) of this
subsection + }.
   { +  (b) A lien of the association under this section that
secures assessments for fines levied under ORS 94.630 (1)(n) is
not prior to the lien of a first mortgage or trust deed described
in paragraph (a)(C) of this subsection. + }
  (2) { + (a) + } 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 required to perfect the
association's lien.
   { +  (b) + } 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. The notice
shall contain:
    { - (a) - }   { + (A) + } A true statement of the amount due
for the unpaid assessments after deducting all just credits and
offsets;
    { - (b) - }   { + (B) + } The name of the owner of the lot,
or reputed owner, if known;
    { - (c) - }   { + (C) + } The name of the association;
    { - (d) - }   { + (D) + } The description of the lot as
provided in ORS 93.600; and
    { - (e) - }   { + (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
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) The proceedings to foreclose liens created by this
section shall conform as nearly as possible to the proceedings 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) of this section,
the assessment and claim regarding each unpaid assessment shall
be deemed to have been levied at the time the unpaid assessment
became due.
  (b) The lien may be enforced by the board of directors acting
on behalf of the association.
  (c) An action to recover a money judgment for unpaid
assessments may be maintained without foreclosing or waiving the
lien securing the claim for unpaid assessments.
  (5) 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.
  SECTION 2. ORS 94.723 is amended to read:
  94.723. If a first mortgagee acquires a lot in a planned
community by foreclosure or deed in lieu of foreclosure, the
mortgagee and subsequent purchaser   { - shall not be - }
 { + are + } liable for any   { - of the common expenses - }
 { + assessments + } chargeable to the lot which became due
before the mortgagee or purchaser acquired title to the lot
 { + except for assessments for fines levied under ORS 94.630
(1)(n) + }.   { - The unpaid expenses shall become a common
expense of all lot owners including the mortgagee or
purchaser. - }
  SECTION 3. ORS 100.450 is amended to read:
  100.450. (1) { + (a) + } Whenever an association of unit owners
levies any assessment against a unit, the association of unit
owners shall have a lien upon the individual unit and the
undivided interest in the common elements appertaining to such
unit for any unpaid assessments. The lien includes interest, late
charges, attorney fees, costs or other amounts levied under the
declaration or bylaws. The lien is prior to a homestead exemption
and all other liens or encumbrances upon the unit except:
    { - (a) - }   { + (A) + } Tax and assessment liens;
 { - and - }
   { +  (B) Liens and encumbrances recorded before the recording
of the declaration or applicable supplemental declaration
recorded under ORS 100.125 or 100.150; and + }
    { - (b) - }   { + (C) + } A first mortgage or trust deed
 { - of record unless: - }  { + recorded after the recording of
the declaration or applicable supplemental declaration under ORS
100.125 or 100.150, to the extent provided in paragraph (b) of
this subsection. + }
    { - (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. - }
   { +  (b) A lien of the association under this subsection that
secures assessments for fines levied under ORS 100.405 (4)(k) is
not prior to the lien of a first mortgage or trust deed described
in paragraph (a)(C) of this subsection. + }
  (2) { + (a) + } 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 required to perfect the
association's lien.
   { +  (b) + } 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. The
notice shall contain:
    { - (a) - }   { + (A) + } A true statement of the amount due
for the unpaid assessments after deducting all just credits and
offsets;
    { - (b) - }   { + (B) + } The name of the owner of the unit,
or reputed owner, if known;
    { - (c) - }   { + (C) + } The name of the condominium and the
designation of the unit as stated in the declaration or
applicable supplemental declaration; and
    { - (d) - }   { + (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
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) The proceedings to foreclose liens created by this
section shall conform as nearly as possible to the proceedings 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) of this section,
the assessment and claim regarding each unpaid assessment shall
be deemed to have been levied at the time the unpaid assessment
became due.
  (b) The lien may be enforced by the board of directors acting
on behalf of the association of unit owners.
  (c) An action to recover a money judgment for unpaid
assessments may be maintained without foreclosing or waiving the
lien securing the claim for unpaid assessments.
  (d) 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) Unless the declaration or bylaws provides 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) 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) Notwithstanding the priority established for a lien
for unpaid assessments and interest under subsection (1) of this
section, the lien shall also be prior to the lien of a first
mortgage or 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
or trust deed 90 days prior written notice that the owner of the
unit is in default in payment of an assessment. The notice shall
contain: - }
    { - (A) Name of borrower; - }
    { - (B) Recording date of trust deed or mortgage; - }
    { - (C) Recording information; - }
    { - (D) Name of condominium, unit owner and 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 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 initiated judicial action to
foreclose the mortgage or requested issuance of a trustee's
notice of sale under the trust deed or 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 the lender may reasonably
request. - }
    { - (e) The borrower is in default 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
having knowledge of the facts, has been recorded in the manner
prescribed in subsection (3) of this section. The affidavit shall
recite the date and the person to whom the notice was given. - }
  SECTION 4. ORS 100.465 is amended to read:
  100.465.   { - Unless the declarations or bylaws otherwise
provide, - }  A deed in lieu of foreclosure accepted by the
holder of a first mortgage or the beneficiary of a first deed of
trust in respect to a condominium unit   { - shall - }   { + does
not + } have the effect of extinguishing a lien of the
association securing unpaid assessments through the date of
recording of the deed in lieu of foreclosure   { - in the
following circumstances: - }   { + except to the extent that the
lien secures assessments for fines levied under ORS 100.405
(4)(k). + }
    { - (1) Written notice has been given to the association,
addressed to the individual authorized to accept service of
process sent by first class mail, return receipt requested,
notifying the association of the mortgagee or beneficiary's
intent to accept a deed in lieu of foreclosure and stating that
the lien of the association may be extinguished in the
circumstances specified in this section; and - }
    { - (2) The deed in lieu of foreclosure is recorded not later
than 30 days after the date the notice is mailed to the
association. - }  { +  + }
  SECTION 5. ORS 100.475 is amended to read:
  100.475. (1) A unit owner shall be personally liable for all
assessments imposed on the unit owner or assessed against the
unit by the association of unit owners.
  (2)   { - Where - }   { + When + } the purchaser of a unit
obtains title to the unit as a result of foreclosure of the first
mortgage or trust deed,   { - such - }   { + the + } purchaser,
the successors and assigns of the purchaser  { - , shall not
be - }   { + are + } liable for   { - any of the - }  assessments
against   { - such - }   { + the + } unit or its owner
 { - which - }   { + that + } became due prior to the acquisition
of title to   { - such - }   { + the + } unit by   { - such - }
 { + the + } purchaser except   { - as specifically provided
otherwise in ORS 100.450 - }   { + for assessments for fines
levied under ORS 100.405 (4)(k) + }.   { - Such unpaid
assessments shall be a common expense of all the unit owners
including such purchaser, the successors and assigns of the
purchaser. - }
  (3)(a) Subject to paragraph (b) of this subsection, in a
voluntary conveyance of a unit, the grantee shall be jointly and
severally liable with the grantor for all unpaid assessments
against the grantor of the unit to the time of the grant or
conveyance, without prejudice to the grantee's right to recover
from the grantor the amounts paid by the grantee therefor.
  (b) Upon request of an owner or owner's agent, for the benefit
of a prospective purchaser, the board of directors shall make and
deliver a written statement of the unpaid assessments against the
prospective grantor or the unit effective through a date
specified in the statement, and the grantee in that case shall
not be liable for any unpaid assessments against the grantor not
included in the written statement.
  (4) An escrow agent or a title insurance company providing
escrow services or issuing title insurance in conjunction with
the conveyance:
  (a) May rely upon a written statement of unpaid assessments
delivered pursuant to this section; and
  (b) Is not liable for a failure to pay to the association at
closing any amount in excess of the amount set forth in the
written statement.
                         ----------