August 7, 2009

How to Garnish Delinquent Owners' Wages and Assets

Filing lawsuits directly against delinquent owners and attempting to garnish their wages and assets is a collection option that is usually available to community associations. If the debt is less than $5,000, small claims court is a quick and inexpensive way to seek a judgment. A board member typically presents the association’s case at trial. If the debt is substantially more than $5,000, then pursuing collection in superior court is a better choice. The association’s attorney presents the case in that forum.

Once a judgment has been obtained against a delinquent owner, the association must seek garnishment of the owner’s wages or bank account funds. If an owner’s employer is known, up to 25% percent of his or her wages can be diverted to the association until the judgment is paid. It is a good practice to request employment information from new owners. If a delinquent owner’s bank account is known, whatever funds are present can be diverted to the association. It is a good practice to keep copies of owners’ checks.

In some cases, a delinquent owner’s employer or bank account can not be identified. If an association lacks this information, it can try to serve an owner with written questions requesting information about his or her assets. If an owner fails to answer the association’s questions, he or she can be held in contempt of court. This sometimes motivates delinquent owners to cooperate.

The ultimate success of personal lawsuits depends to a large extent on the delinquent owner. If an owner is unemployed and has little money in the bank, a personal lawsuit is not likely to result in a full recovery in the short term. Some associations decide to cut their losses and end such lawsuits at that point. However, there is value in obtaining and recording a judgment against owners that currently have no assets. Judgments are valid for 10 years in Washington and can be renewed. Persistent associations can direct their attorneys to periodically reopen unpaid judgment matters to investigate whether circumstances have changed and proceed with garnishment if this is the case.