West Virginia HOA Lien Foreclosure: Three-Year Deadline, Two-Way Fee Shifting

West Virginia adopted the Uniform Common Interest Ownership Act at Chapter 36B, and § 36B-3-116 is where the association's collection power and its limits both sit. The limits are the part owners rarely see quoted.

The first is a hard three-year cutoff. Under subsection (d), a lien for unpaid assessments "is extinguished unless proceedings to enforce the lien are instituted within three years after the full amount of the assessments becomes due." That is not a general statute of limitations borrowed from elsewhere in the West Virginia Code; it is written into the lien section itself and it destroys the lien rather than merely barring a remedy. Subsection (a) fixes the start of the clock for instalment assessments by providing that where an assessment is payable in instalments, the full amount is a lien from the time the first instalment becomes due.

The second limit is structural and is easy to miss because it is an absence. Chapter 36B nowhere gives a West Virginia association a power of sale over a unit, and § 36B-3-116 nowhere states the manner in which the lien is to be foreclosed. Subsection (e) confirms that the section "does not prohibit actions to recover sums for which subsection (a) creates a lien or prohibit an association from taking a deed in lieu of foreclosure", which leaves three practical routes: sue the owner on the debt, negotiate a deed in lieu, or institute proceedings to enforce the lien inside the three years. The single reference to a power of sale anywhere in the section is in subsection (i), and it applies only to cooperatives: at any time before the association has disposed of a cooperative unit or contracted for its disposition under the power of sale, the unit owner or the holder of any subordinate security interest may cure the default and stop the sale by tendering the performance due, including amounts due because of acceleration, plus the reasonable expenses of proceeding to foreclosure incurred to the time of tender and the creditor's reasonable attorney's fees.

The third limit cuts both ways and is the one that most often changes how a dispute is fought. Subsection (f) requires that a judgment or decree in any action brought under § 36B-3-116 "must include costs and reasonable attorney's fees for the prevailing party." It is not written in the association's favour. An owner who defeats a West Virginia assessment claim is entitled to fees on the same terms as the association would have been, which is a real deterrent to filing a thin case over a small balance.

Subsection (g) is the provision a seller needs. On written request the association must furnish the owner a statement of the amount of unpaid assessments against the unit, in recordable form where the owner's interest is real estate, within ten business days of receiving the request, and that statement "is binding on the association, the executive board, and every unit owner." Ten business days is the outer limit, and the binding language means a figure quoted too low cannot be revised upward after closing.

Subsection (c) settles a contest that arises in West Virginia's larger master-planned developments, where a lot can sit under both a master association and a neighbourhood association: unless the declaration provides otherwise, if two or more associations hold assessment liens on the same property, those liens have equal priority. Neither association can claim to have got there first.

One further caution applies before any of this is relied on. Section 36B-1-203 exempts a planned community of no more than twelve units that is not subject to development rights, and one whose declaration caps the annual average common expense liability of residential units, exclusive of optional user fees and insurance premiums, at $300 as adjusted under § 36B-1-114. In those communities most of Chapter 36B, including the lien section, does not apply unless the declaration says the whole chapter does.

Enforcement begins with perfection rather than with a filing. Section 36B-3-116(h) requires the association to give the owner notice in the manner set out in § 56-2-1 or by registered or certified mail with return receipt requested, and to record a notice of lien with the clerk of the county commission of any county where part of the property lies; the notice must carry a legally sufficient description of the unit, the owners' names, the amount unpaid with the date each item fell due, and the date of recordation.

Without that recorded notice the lien is discharged as to a subsequent purchaser for value without notice. From there the three-year clock in subsection (d) controls: proceedings not instituted in time leave the association with an ordinary money claim against the owner and no lien on the unit. A judgment under the section carries costs and reasonable attorney's fees to the prevailing party under subsection (f), so an association that loses pays the owner's lawyer. Section 36B-3-117 keeps association debts off the rest of an owner's property: a recorded money judgment against the association is not a lien on the common elements but is a lien against every unit, "No other property of a unit owner is subject to the claims of creditors of the association", and an owner whose unit is caught by a non-mortgage lien affecting two or more units may pay the share attributable to that unit, proportionate to its common expense liability, and demand a prompt release.

When the debt is paid, § 36B-3-116(h) requires the association to record a release in the manner set out in § 38-12-1, at the association's own expense, in the county commission clerk's office where the lien notice was filed.