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Liens on property in ’08 hit record high

February 4, 2009 by root

Over 40 percent of filings were due to unpaid sewer bills

Thursday, January 15 | 6:07 p.m.

BY COURTNEY SHERWOOD
COLUMBIAN STAFF WRITER

A record number of liens was issued against Clark County properties in 2008, according to a Columbian analysis of 20 years of property records. And something stinks about many of last year’s 6,056 legal claims.

Clark County homeowners are flushing away some of the money they might recover from a property sale by ignoring their unpaid sewer bills.

Liens, which are legal claims made on properties because of an unpaid debt, have been rising in many categories. When a property with a lien on it sells, the issuer of the lien gets paid before the property owner — often with interest.

Homeowners and neighborhood associations filed 307 liens in 2008, up from 132 the year before. Businesses with “construction” in the name filed 88, up from 78.

But the biggest jump in liens can be traced to the Clark Regional Wastewater District, which filed 2,624 of these claims last year, more than 40 percent of the total.

The number of liens it files has climbed significantly since 1999, when it was known as the Hazel Dell Sewer District. “We bill bimonthly, and when a bill becomes two bill cycles past due we mail an intent to lien notice to the property owners,” said Ken Andrews, finance director of Clark Regional Wastewater.

“We don’t have the ability to turn sewer service off because of unpaid bills,” he said. “So after 15 days, if there hasn’t been some form of contact or payment arrangement, then a lien is filed.”

Andrews was not with the sewer district when this policy went into effect, but it appears to have started in about 1999, when the number of liens filed, which had been fewer than 10 for each year of the preceding decade, began its climb. After a few years, things stabilized.

But recently, missed sewer payments have been mounting. The district, which generally serves areas inside the Vancouver urban growth boundary but outside the city limits, saw only 1 percent customer growth in 2008, but a 13.2 percent increase in the number of liens it filed. “This is mostly a reflection of the economy, and it’s certainly a reflection of the increase in unemployment, the increase in foreclosures and bankruptcies that are happening,” Andrews said.

The good news is that most of these liens are resolved. In 2008, about 2,200 liens were released once property owners paid their bills, Andrews said.

Others who have had to turn to liens to secure debts have not fared as well. Fettig Construction, based in Sherwood, Ore., filed 14 liens for more than $80,000 in unpaid work for Clark County developments in 2008. It filed only two in 2007 for unpaid work, and none in 2006. Five liens were filed on properties owned by Renaissance Homes, which filed for bankruptcy in September.

“In the last six months of 2008 we filed more liens than in the whole history of the company,” said Jeff Howell, operations manager at Fettig. “If they don’t have the money, they don’t have the money, but if they’re waiting to see who’s screaming the loudest then they pay us after we file a lien.”

He’s optimistic about 2009 because of changes in how projects are funded. Investor-funded developments depend on investors to pay contractors, Howell said. “Now projects are more likely to be funded by banks, and you know the money will come through.”

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