The Community Associations Institute Washington Legislative Action Committee (WA LAC) needs your help opposing E2SSB 5686 Expanding and funding the foreclosure mediation program, which passed in the Senate and has been sent to the House. Tell your Representative to OPPOSE SB 5686! If passed, this bill would extend the foreclosure process and pass costs onto all homeowners, rather than just those who are delinquent in paying assessments. WA LAC has tried to work with stakeholders on improving E2SSB 5686, however, we remain deeply concerned that this bill will create additional delays in the collections process and unfairly limit the ability of community associations to recover legal fees associated with the delays introduced by the required mediation. The end result of this bill would be to transfer costs from owners who do not pay assessments in a timely manner to owners that do and increase the cost of housing for everyone. 

Unlike banks and other financial institutions, community associations must rely on all homeowners to cover the costs of maintaining shared spaces and services. When a homeowner falls behind on their assessment payments, the financial burden shifts to the rest of the community's homeowners. If this bill passes, it will prohibit associations from recovering legal fees and costs associated with the new “meet and confer” and mediation requirements. Under this bill, parties must meet and confer with a housing counselor within 30 days of receiving a foreclosure notice. The bill also requires a referral to mediation no later than 90 days prior to a foreclosure auction. These delays introduced into the collections process could make some assessments uncollectible due to the statute of limitations, forcing responsible homeowners to cover the costs. 

Under E2SSB 5686, a referral to mediation may be made at any time before the date of the foreclosure sale, while also allowing parties to meet and confer before then. These two processes, similar yet separate, could drag out a months-long process even longer. An association would not be able to file a judicial foreclosure complaint if mediation has been requested, which complicates the statute of limitations and could cause portions of the debt to become uncollectible. Mediation and “meet and confer” requirements are not necessary as delinquent owners already receive numerous delinquency notices from their associations, and in most cases, have an opportunity to make payment plan or settlement proposals prior to litigation.

While we support efforts to inform homeowners about available government assistance programs and housing counseling services, we believe collection costs should be minimized by ensuring that delinquent accounts are addressed as quickly as possible. Homeowners who pay their dues on time should not be forced to subsidize those who refuse to engage in the collections process.  Please tell your Representative to OPPOSE E2SSB 5686!