Washington Real Estate Law Blog

What can a tenant do when a landlord breaches the rental or lease agreement?

Robert Dickson — Fri, 05 Feb 2010 14:56:14 -0800

For a tenant to exercise his or her remedial rights under the Landlord-Tenant Act (RCW 59.18), the following requirements must be satisfied:

1. Tenant must be current on rent

2. Tenant must give landlord notice of any defective condition in writing (the landlord then has statutorily-outlined time requirements in which to correct the defects. RCW 59.18.070). If the landlord is not given notice, the court will not expect him to have fixed the defect(s).

3. Tenant must not prevent or thwart the landlord's attempt at remedying the defect

4. If the landlord still does not correct the defect, the tenant may elect one of the following remedies:

(a) terminate rental agreement, and vacate; (b) commence action in court; or (c) fix the defect and deduct the cost from the required rental payment; (d) seek a third party arbitrator or court determination which assesses the reduction of rental value of the property; (e) in the case of substantial danger to the health and safety of the tenant, he or she can request that a government conduct an inspection on the premises. The inspector will then certify whether in deed the property is sufficiently dangerous, thus verifying whether withholding rental payment is justified; (f) seek authorization from a court or arbitrator to end the tenancy -- this is only authorized when the defects are so drastic that they cannot be corrected.

For a more detailed description of the above guide, look to RCW 59.18. It is important to note that tenants must follow these requirements strictly. If a landlord can show that the RCW was not followed, he may defeat the tenant's actions in attempting to correct the deficiency -- meaning that the tenant may have violated the lease and is liable for subsequent damages.

Above all, if you are a tenant, be sure to keep paying rent! The court will not go along with your actions IF it is shown that you are either deficient in the rent owed, or have unnecessarily withheld amounts that you rightfully owe.

Landlords -- don't forget about the deposit!

Robert Dickson — Tue, 02 Feb 2010 09:53:00 -0800

In a recent case, I encountered an interesting issue regarding deposits held by landlords. Specifically, what happens to a tenant's deposit once the landlord/tenant relationship has ended (either the tenant has moved out or abandoned the property, or, the landlord has removed him or her)? In the Landlord-Tenant Act, RCW 59.18.280 outlines what needs to happen --

"Within fourteen days after the termination of the rental agreement and vacation of the premises or, if the tenant abandons the premises as defined in RCW 59.18.310, within fourteen days after the landlord learns of the abandonment, the landlord shall give a full and specific statement of the basis for retaining any of the deposit together with the payment of any refund due the tenant under the terms and conditions of the rental agreement. No portion of any deposit shall be withheld on account of wear resulting from ordinary use of the premises. The landlord complies with this section if the required statement or payment, or both, are deposited in the United States mail properly addressed with first-class postage prepaid within the fourteen days.

The notice shall be delivered to the tenant personally or by mail to his last known address. If the landlord fails to give such statement together with any refund due the tenant within the time limits specified above he shall be liable to the tenant for the full amount of the deposit. The landlord is also barred in any action brought by the tenant to recover the deposit from asserting any claim or raising any defense for retaining any of the deposit unless the landlord shows that circumstances beyond the landlord's control prevented the landlord from providing the statement within the fourteen days or that the tenant abandoned the premises as defined in RCW 59.18.310. The court may in its discretion award up to two times the amount of the deposit for the intentional refusal of the landlord to give the statement or refund due. In any action brought by the tenant to recover the deposit, the prevailing party shall additionally be entitled to the cost of suit or arbitration including a reasonable attorney's fee.

Nothing in this chapter shall preclude the landlord from proceeding against, and the landlord shall have the right to proceed against a tenant to recover sums exceeding the amount of the tenant's damage or security deposit for damage to the property for which the tenant is responsible together with reasonable attorney's fees."

The important thing to remember is that the landlord has a mere 14 days to provide either an explanation of why the deposit has not been tendered (or to ask for more time). After that 14-day window, the landlord is functionally barred from making any defenses to keeping the money and may actually have to pay more. So, to all those landlords out there: be sure to take care of the deposit issue within that 14-day deadline.

Understanding debt-to-income ratios and how they relate to loan modifications

Robert Dickson — Tue, 15 Dec 2009 10:41:08 -0800

In determining whether to grant a loan modification, there are generally three central factors that a lender takes into consideration: 1) the financial hardship of the borrower; 2) whether the borrower is currently delinquent on mortgage payments or is at risk of becoming delinquent in the immediate future; and 3) the borrower’s debt-to-income ratios. While the first two factors seem relatively straightforward, understanding your debt-to-income ratios is oftentimes confusing and may seem complex.

What is a debt-to-income ratio?

Simply put, a “debt-to-income ratio” (DTI) is the percentage of a homeowner’s gross monthly income that goes toward paying the homeowner’s debts. In the context of a home loan modification, two DTI ratios are considered: a “front-end” DTI ratio and a “back-end” DTI ratio.

Why are Your Debt-to-Income Ratios Important?

Because lenders want to avoid as much risk as possible, they will pay special attention to your DTI ratios. In essence, lenders use your DTI ratios as indicators of your ability to repay your debts. Therefore, if your DTI ratios are low, lenders may be more inclined to assist you because they believe that you have a higher probability of repaying your debts. On the other hand, if your DTI ratios are high, lenders may be less likely to assist you because they believe you have a lower probability of repaying your debts (and, therefore, you are a greater risk).

Because your DTI ratios play such a significant role in the home loan modification process, it is a good idea for you to do a rough calculation of your own front-end and back-end DTI ratios before seeking a loan modification. By doing your own calculation, you can estimate whether a lender is more likely or less likely to grant you a loan modification.

How Do You Calculate Your Front-end DTI Ratio?

To calculate your front-end DTI ratio, you divide your total “monthly house payment” by your gross monthly household income:

Monthly House Payment ÷ Gross Monthly Household Income= Front-end DTI Ratio

Your “monthly house payment” is often referred to as “PITIA.” “PITIA” is defined as principal, interest, taxes, insurance (including homeowners insurance and hazard and flood insurance) and homeowners association fees (if applicable). Note that if you pay property taxes, insurance, and/or homeowners association fees separately from you mortgage principal and interest, these expenses need to be added to your total “monthly house payment.”

Examples

1) Mr. Smith’s monthly house payment is $1,100. Mr. Smith is a carpenter and his gross monthly household income is $2,700. To figure out his front-end DTI ratio, Mr. Smith takes the amount of his monthly house payment ($1,300) and divides it by the amount of his gross monthly household income ($2,700). Mr. Smith’s front-end DTI ratio is 40.7%, because $1,300 ÷ $2,700= 40.7%.

2) Mr. and Mrs. Baker’s monthly house payment is $1,900. Mr. Baker is an electrician and his gross monthly income is $2,800. Mrs. Baker is a seamstress and her gross monthly income is $1,200. Combined, Mr. and Mrs. Baker’s gross monthly household income is $4,000. To figure out their front-end DTI ratio, the Bakers take the amount of their monthly house payment ($1,900) and divide it by the amount of their gross monthly household income ($4,000). The Bakers’ front-end DTI ratio is 47.5%, because $1,900 ÷ $4,000= 47.5%.

How Do You Calculate Your Back-end DTI Ratio?

To calculate your back-end DTI ratio, you add up all of your monthly debt payments (do not include any expenses that are not listed on your credit report), which may include:

· Your “house payment” or PITIA (this was used in calculating your front-end DTI)

· Credit card payments

· Automobile loan or lease payments

· Alimony/child support

· Educational/student loan payments

· Any personal loans

· Any other accounts reported in your credit reports

After adding all of these monthly debts up, you then take the total and divide it by your total gross monthly household income:

Monthly Debt Payments ÷ Gross Monthly Household Income= Back-end DTI Ratio

Examples

1) Mr. Smith’s monthly debt payments come out to $1,700 ($1,100 for his monthly house payment, $300 for his car loan, and $300 for alimony). Mr. Smith is a carpenter and his gross monthly household income is $2,700. To figure out his back-end DTI ratio, Mr. Smith takes the amount of his monthly debt payments ($1,700) and divides it by the amount of his gross monthly household income ($2,700). Mr. Smith’s back-end DTI ratio is 62.9%, because $1,700 ÷ $2,700= 62.9%.

2) Mr. and Mrs. Baker’s monthly debt payments come out to $2,300 ($1,900 for their monthly house payment, $200 for their car lease, and $200 in credit card payments). Mr. Baker is an electrician and his gross monthly income is $2,800. Mrs. Baker is a seamstress and her gross monthly income is $1,200. Combined, Mr. and Mrs. Baker’s gross monthly household income is $4,000. To figure out their back-end DTI ratio, the Bakers take the amount of their monthly debt payments ($2,300) and divide it by the amount of their gross monthly household income ($4,000). The Bakers’ back-end DTI ratio is 57.5%, because $2,300 ÷ $4,000= 57.5%.

3) Ms. Garcia’s monthly debt payments come out to $1,600. Ms. Garcia is a civil engineer and her gross monthly income is $5,000. To figure out her back-end DTI ratio, Ms. Garcia takes the amount of her monthly debt payments ($1,600) and divides it by the amount of her gross monthly household income ($5,000). Ms. Garcia’s back-end DTI ratio is 32%, because $1,600 ÷ $5,000= 32%.

Why Do Your DTI Ratios Matter and What Should You Do?

Today, lenders have specific target ranges and limitations on allowable DTI ratios for loan modifications. Although your lender may have slightly differing DTI ratio targets and limitations, most lenders are willing to grant loan modification to homeowner’s whose DTI ratios are below 50%. Remember, lenders want to avoid risk and only want to extend loan modifications to homeowners who have a high probability of repaying their debts.

Therefore, it is a good idea for you to do your own initial front-end and back-end DTI calculations so that you can get a general sense of whether a lender is more likely or less likely to grant you a loan modification. When doing these calculations keep in mind that DTI ratios well below 50% are ideal. Doing these calculations can save you time in determining whether a loan modification is right for you or whether another option might be more advantageous to you in protecting your house.

As always, remember that the earlier you look into the requirements of loan modifications and begin the process, the better. Start by doing your own front-end and back-end DTI calculations and go from there. If you have questions, do not hesitate to ask for help. Also, remember that a qualified attorney who has experience in working with loan modifications can be extremely beneficial to you and can assist you in working directly with your lender and in protecting your interests.

Facing a nonjudicial foreclosure? Here's what you need to know...

Wendy Koch — Thu, 05 Nov 2009 15:34:58 -0800

Washington law allows lenders to foreclose on properties that are in default by using either a judicial or a nonjudicial foreclosure process. While the judicial foreclosure process involves going through the courts to obtain an order to foreclose, the nonjudicial foreclosure process allows the lender or the trustee under a deed of trust to foreclose by selling the property without court involvement.

Often referred to as a “trustee’s foreclosure” or a “foreclosure by power of sale,” nonjudicial foreclosure can only be used if a deed of trust (or other mortgage instrument) authorizes it. Today, it is widespread practice for a deed of trust to contain such an authorization by including a “power of sale” clause. This “power of sale” clause preauthorizes the sale of the property to pay off the balance of the loan in the event that the borrower defaults. Because a court is not involved in a nonjudicial foreclosure, however, there are very specific provisions, procedures, and formalities that the trustee or the lender must observe during the foreclosure process. In Washington, the statutory requirements governing nonjudicial foreclosures are set forth in Chapter 61.24 of the Revised Code of Washington. The following are the major requirements of the nonjudicial foreclosure process.

1) Notice of Default

At least thirty (30) days before initiating a foreclosure sale, the trustee must send a written notice of default to the borrower. This written notice of default must be sent to the borrower’s last known address and must be sent by both first-class mail and either registered or certified mail, with a return receipt requested. Additionally, the trustee must either personally serve the notice of default on the borrower or post a copy of the notice in a conspicuous place on the premises.

The RCWs set forth very specific information that must be included in the notice of default. For example, a description of the subject property, a statement declaring the borrower in default, and an itemized account of all amounts in arrears are just some of the items of information that must be included in this notice. In addition, the RCWs set forth specific duties that lenders have and must complete even before a notice of default can be issued.

2) Notice of Sale

At least ninety (90) days before the foreclosure sale, the trustee must record a notice of sale in the office of the auditor in each county where the property is located. The trustee must then send a copy of the notice of sale to the borrower (and any other interested parties as set forth in the RCWs) by both first-class mail and either certified or registered mail, with a return receipt requested.

In addition to the notice of sale, the trustee must include a statement to the borrower that sets forth the steps required to cure the default and avoid foreclosure. This statement allows the borrower to stop the foreclosure process by paying past due payments, plus additional expenses. The ability to cure the default, however, ends eleven (11) days prior to the foreclosure sale.

In addition to mailing copies of the notice of sale and the statement regarding how the default can be cured, the trustee must also either personally serve the notice of sale upon any occupant of the property, or must post a copy of the notice of sale in a conspicuous place on the property. The trustee must also publish the notice of sale consecutively for four (4) weeks in a “legal” newspaper in the county where the property is located.

3) The Foreclosure Sale

The foreclosure sale itself also has rigid guidelines. The foreclosure sale must take place at a designated public place and must be on a Friday, or if the Friday is a legal holiday, on the following Monday. Additionally, the foreclosure sale must take place between 9:00 a.m. and 4:00 p.m., and it must take place at least 190 days from after the date of the first default.

4) Notice to Occupants or Tenants

If the property subject to the foreclosure proceeding is occupied by a tenant or other occupant, the trustee must, in addition to the requirements set out above, mail a specific notice in an envelope addressed to the “Resident of property subject to foreclosure sale.” Like many of the other notices, the specific language of this notice is set forth in the RCWs.

After the foreclosure sale is completed, the purchaser of the property is entitled to possession of the property on the twentieth day following the trustee’s sale, as against the borrower and anyone having an interest junior to the deed of trust, including occupants who are not tenants. When the occupants of the property are tenants, however, the purchaser cannot merely enter the property on the twentieth day following the sale. In this situation, the purchaser has two options: 1) The purchaser can negotiate a new purchase or rental agreement with the tenant or subtenant; or 2) The purchaser can elect to terminate the rental agreement. If the purchaser elects to terminate the rental agreement, the purchaser must give the tenant or subtenant sixty (60) days written notice to vacate. It is not until this sixty days notice has lapsed that the purchaser can lawfully remove the tenant or subtenant from the property.

Understanding these major requirements of Washington’s nonjudicial foreclosure process is important. Whether you are a homeowner who is facing foreclosure, a lender who is considering beginning the foreclosure process, or a tenant living in a property that is being auctioned at a foreclosure sale, understanding these requirements can help you to know your rights and your duties. The process of nonjudicial foreclosure can be a time-consuming and complex process, requiring strict adherence to the applicable RCWs and their substantive forms and language. Always keep in mind that because each situation involving nonjudicial foreclosure presents unique issues, seeking professional legal assistance to guide you through this complicated time may ultimately be that best decision you make in protecting your interests.

Does the RCW mandate attorney's fees awards in timber trespass cases? Appeals court in Bassani Farms v. Maddox says "no."

Robert Dickson — Mon, 02 Nov 2009 13:21:32 -0800

One of Washington State’s greatest natural resources is its trees and forests. Given the abundance of this natural resource, Washington has enacted several statutes which govern accidental or intentional damage to and/or removal of timber on someone else’s property (without permission of course). These laws are set forth in RCW 4.24.630 and RCW 64.12.030.

Although both RCW 4.24.630 and RCW 64.12.030 deal with damage to and removal of trees, there has always been a conflict between these statutes. Namely, how does the court award damages to a prevailing party in an action when the trespasser damaged and/or removed trees, but did not injured the property? (Both RCW 4.24.630 and 64.12.030 discuss damages for timber trespass, yet 4.24.630 includes a provision for attorney’s fees).

RCW 4.24.630 says that if a person goes onto another’s property without permission and removes or damages timber, that person is liable for treble damages and attorney fees. RCW 64.12.030, however, says that if a person goes onto another’s property without permission and removes or damages any tree, timber, or shrub, that person is liable only for treble damages—no attorney fees may be awarded.

Recently, in Bassani Farms, LLC v. Maddox, the Washington Appellate Court (Division III) offered some guidance on this conflict. For one, the Bassani Court asserted that RCW 64.12.030 requires no mental state and applies equally to intentional and negligent takings and damages to trees and shrubs. Second, the Bassani Court reiterated that RCW 4.24.630(2) expressly exempts any claims that fall under RCW 64.12.030’s language from being applied to RCW 4.24.630. The result is therefore, that prevailing claims pertaining ONLY to damage and/or removal of trees from a landowner’s property can only be awarded treble damages—no attorney fees can be awarded.

Ultimately, Bassani’s outcome may negatively impact on landowners whose trees have been damaged and/or removed and seek redress in court. In such cases, attorney fees may be substantial. Consequently, the possibility of recovering attorney fees may be equally, if not more, important to a landowner as is recovering treble damages. If courts are finding that a landowner’s claims apply under RCW 64.12.030 (which does not allow attorney fees), not RCW 4.24.630, landowners may be less likely to sue because they will not be awarded attorney fees and any other litigation-related costs.

Bankruptcy: what are my options?

Robert Dickson — Tue, 27 Oct 2009 16:11:29 -0800

For people experiencing severe financial difficulties and who are overwhelmed with debt, bankruptcy may be an important option. Whether difficult times are brought on by job loss, medical problems, family breakups, or even financial irresponsibility, bankruptcy can grant you much desired relief. Understanding some basic principles of consumer bankruptcy, however, is imperative in knowing which form of bankruptcy is appropriate.

Within bankruptcy law, there are several different “chapters.” Each “chapter” is specifically designed to help either individuals or businesses in eliminating, resolving, and/or repaying their debts. Selecting which bankruptcy chapter to proceed under, depends on the individual’s or business’s specific circumstances. For individuals (“consumers”) who are seeking relief through the bankruptcy process, two chapters are available: Chapter 7 and Chapter 13. These two bankruptcy chapters differ significantly and offer different results.

Chapter 7 Bankruptcy

Chapter 7 is commonly referred to as “liquidation bankruptcy.” When an individual proceeds under Chapter 7, a trustee is appointed by the bankruptcy court. The trustee then gathers all of the individual’s property (except any property that is exempt), sells (“liquidates”) it, and distributes the proceeds of the sale to the individual’s creditors. At the end of this process, any outstanding debts are discharged (eliminated). The creditors then chalk-up their losses and move on, while the individual must start anew with very little assets leftover. The Chapter 7 process generally takes about four to six months.

Not everyone is allowed to proceed under Chapter 7, however. To be eligible under Chapter 7, an individual must pass the “means test” (a mechanical formula that is used to determine who can and cannot repay some debt.) If it is determined by the court that the individual’s “current monthly income” is above a certain amount and the individual has the ability to repay some debt, the individual may be denied Chapter 7 relief and may be forced to proceed under Chapter 13. Most people who meet the eligibility requirements proceed under Chapter 7 because, unlike Chapter 13, Chapter 7 takes less time to complete and does not require the individual to pay back any portion of his or her debts.

Chapter 13 Bankruptcy

Chapter 13 differs significantly from Chapter 7’s liquidation method. Commonly referred to as an “Adjustment of Debt” or “Wage Earner’s Plan,” Chapter 13 focuses on using the individual’s future earnings, rather than liquidated property, to pay creditors. When an individual files under Chapter 13, a court-approved plan allows the individual to keep all of his or her property, but the individual must pay a portion of all future income to the creditors. This payout plan lasts for three to five years, depending on the circumstances and the court-approved plan. When the individual has completed the agreed payout plan, any remaining obligations are discharged.

Naturally, eligibility to proceed under Chapter 13 requires that an individual must prove that he or she is capable of paying a portion of his or her future monthly income to creditors for a period of three to five years. If the individual’s income is not regular or is too low, Chapter 13 may be denied. Likewise, if the individual’s total amount of debt is too high, the court may deny Chapter 13. Unlike Chapter 7, Chapter 13 takes much more time to complete. However, the major benefit of Chapter 13 is that the individual is allowed to keep his or her property.

Understanding the main differences between Chapter 7 and Chapter 13 can assist you in knowing which form of bankruptcy will most likely work best for you. Keep in mind, however, that because the bankruptcy process is complex and oftentimes requires professional knowledge to be successful, seeking professional help is your best bet.

Update on loan modifications

Wendy Koch — Tue, 13 Oct 2009 11:37:04 -0800

Although foreclosure filings across the nation were up almost eighteen percent last quarter compared to the same time last year, foreclosure rates in Seattle, Tacoma, and Bellevue were down nearly twelve percent from the same period a year ago. While this news may be refreshing, foreclosures continue to have adverse effects on property values throughout our community and on homeowners who have been striving to make their monthly mortgage payments in this tough economy.

Many may wonder how foreclosures affect those homeowners who continue to pay their mortgages each month. In essence, foreclosures reduce a community’s home prices and have further unfavorable consequences on the economy as a whole. For example, in some studies, foreclosure on a home has been found to reduce the prices of nearby homes by as much as 9 percent—creating the potential that even borrowers who make every payment on their home mortgage suffer from foreclosures in their community[1]. Along with foreclosures, our slow economy’s sharp rise in unemployment has affected the real estate market and continues to affect many homeowners who are struggling to keep up on their mortgage payments.

To combat the grave effects that foreclosures and the economy are having on the real estate market, loan modifications have become increasingly popular among homeowners who are struggling to make their mortgage payments and who do not want to lose their homes. One of the biggest reforms to the current loan modification system has been President Obama’s Homeowner Affordability and Stability Plan (“HASP”), which was passed last March and was enacted to help qualified homeowners restructure and refinance their mortgages to avoid foreclosure. The HASP targets those homeowners with a “high combined mortgage debt compared to income,” or those who are “underwater” on the homes (those with a mortgage balance that is higher than the current market value of their homes).

Because a properly negotiated loan modification may allow a borrower to remain in his home and avoid foreclosure, loan modifications are becoming more and more appealing to many homeowners who need a little help to get through this difficult time. However, there are two important things to remember when considering a loan modification:

1) Loan modifications are more likely to succeed if done early; and

2) Loan modifications are more likely to succeed if done with the assistance of an experienced attorney who has worked directly with lenders on loan modifications.

Borrowers who have only missed a small number of payments or who have not yet missed a payment (but are likely to in the immediate future) are in the best position to have their loan modifications succeed. This is because the financial hardship of the homeowner is likely to have only recently begun and can likely be turned around with prudent planning. Similarly, the earlier the terms of the loan modification are negotiated, the more likely the homeowner will receive a better rate and can immediately begin to reap the benefits of the modification.

Additionally, although loan modification requirements will vary from lender to lender, the documents needed to negotiate a loan modification are generally the same. These required documents may include, but are not limited to, your most recent tax return, a statement of your complete income, your recent pay stubs, and a written affidavit describing the hardship you are experiencing in meeting your financial obligations. Because loan modification requires many of these documents, the earlier you start, the more time you will have to gather these documents. Again, seeking help early on is very important, and, always remember, even if you are unsure about whether you qualify for a loan modification, it is better to ask earlier than later.

Just as a loan modification is more likely to succeed if done early, so too is a loan modification more likely to succeed if done with the assistance of an experienced attorney who has worked directly with lenders. Seeking a loan modification is never an easy process. Besides the necessary documentation required in negotiating a loan modification, modifying a loan can be time-intensive and confusing. Often, you must work with a lender that is dealing with thousands of other homeowners who are attempting to save their homes through the loan modification process. The unfortunate result is that many homeowners are forced to wait for a substantial period of time before being helped, or they are left without any help altogether. With the assistance of an experienced attorney, however, many of these problems can be avoided and you can be represented by someone who has gone through the necessary steps. Again, being represented by someone with experience can be very beneficial.

[1] Homeowner Affordability and Stability Plan Fact Sheet; http://www.treasury.gov/initiatives/eesa/homeowner-affordability-plan/FactSheet.pdf

A Claim for Rescission Based on Misrepresentation Survives the Economic Loss Rule and Alejandre

Kevin Steinacker — Thu, 24 Sep 2009 17:02:06 -0800

Division Two of the Court of Appeals recently issued an opinion on yet another suit for negligent misrepresentation and fraud by the purchaser of a home against the seller. Jackowski v. Borchelt, 151 Wn. App. 1, 209 P.3d 514 (2009). With two notable exceptions, the opinion predictably follows the precedent established by the Supreme Court in Alejandre v. Bull, 159 Wn.2d 674, 153 P.3d 864 (2007).

Jackowski confirms that the economic loss rule holds a party to its contract remedies and affirmed dismissal of the purchaser’s negligence claim against the seller. The opinion further affirmed dismissal of the purchaser’s fraud claim for failure to disclose that the property was in a landslide area where a reasonable inspection prior to closing would have disclosed the landslide risk. Each of these results seems obvious based on Alejandre. The decision therefore underscores a purchaser’s need to either perform a thorough inspection prior to purchasing a home or to insist upon contractual terms detailing the seller’s responsibility for representations as to the condition of the home (or both).

Jackowski dealt with two issues that were not addressed in Alejandre, though: the purchaser’s claim for rescission and claims against the real estate agents involved in the transaction. Jackowski successfully argued that the economic loss rule applies to economic damages, not to equitable relief. Division Two ruled that although the economic loss rule bars recovery, rescission is avoidance of a contract, not recovery. Accordingly, the purchaser’s claim for rescission based on negligent misrepresentation was not barred as a matter of law, despite Alejandre and the economic loss rule.

Similarly, the economic loss rule did not apply to bar the purchaser’s statutory and common law claims against the real estate agent. The economic loss rule bars tort claims for losses suffered as a result of a breach of duties assumed only by contract. Alejandre, 159 Wn.2d at 682. However, the real estate agent had duties to the purchaser based on common law and on statute (specifically, RCW 18.86), in addition to any duties assumed by contract. The statutory and common law claims were not barred by the economic loss rule, and those claims were improperly dismissed on summary judgment.

After Alejandre, the legal prospects for home buyers who had been the victims of negligent misrepresentation were bleak. The standard contracts used for the majority of residential sales provided no relief for issues with the condition of a home, and it is never easy to prove fraud or fraudulent concealment, even if there is some indication that it may have occurred. The opinion in Jackowski might give buyers some hope. It is at least possible to ask for rescission of the contract, and there is a chance of recovery against real estate agents involved in the transaction. Of course, the best advice for buyers is still to take diligent steps prior to closing, rather than to rely on the tenuous claims that may be available to them post-closing.

The information and misinformation about loan modifications

Wendy Koch — Tue, 01 Sep 2009 11:40:06 -0800

Although loan modifications have only recently become publicly known, in actuality they have always been a lesser known option for some borrowers. Not all loan modifications are equal. When President Obama’s Homeowner Affordability and Stability Plan first became available, the criteria seemed relatively clear: it had to be your primary residence, the payment could not be more than 31% of your gross income, you had to have a Fannie Mae or Freddy Mac loan, etc…However, the plan is not as limiting as once thought.

The most important thing to know about loan modifications is that they vary by lender. Some lenders have their own application packet, some are even available online, and others have no packet at all, leaving the borrower to gather and compile all documents necessary to apply. When the public first became aware of the plan, they sent in their paperwork to apply. Many never heard back from the lender or were told months later to resubmit the paperwork at it had become stale. The demand was overwhelming and the response time was slow. The entire program seemed extremely disorganized and most lenders had not even received official information or funding from the government yet.

However, the process now seems to be streamlining. The documents that are requested are generally the same no matter who the lender is. Typically, lenders require documents such as your 2008 tax return or a signed 4506-T IRS form, a hardship affidavit, and proof of income.

When loan modifications were first approved, borrowers immediately received their modification. However, lenders were finding that many borrowers would default under the modified plan, costing lenders millions in unnecessary administrative costs. To avoid such costs (which are ultimately passed on to the consumers), the vast majority of lenders are now giving borrowers a “trial modification.” In general, a trial modification is over the course of three or four months, and after that time, if the borrower has returned all required documents, signed the agreement, and made all trial modification payments timely, a permanent modification will be made.

There are pitfalls with loan modifications to also be aware of. First, once the documents are submitted to the lender, the borrower should check and then double check that the lender received the documents and that no documents are considered ‘missing.’ Second, some lenders have borrowers sending their trial modification payments to a special modification department as opposed to paying online or by check to the usual payment center. If a loan modification department has been established, sometimes there is no communication between that department and the customer service department, so all inquiries and payments should be directed to the loan modification department. Last, borrowers must understand that with each trial modification payment (which is usually at a much reduced amount than the normal mortgage payment) they are becoming further and further in arrears on their loan. They may receive collection letters, they may be reported delinquent on their credit report, and their online account may not reflect any payments having been made at all. This is normal. After the trial modification period has been successfully completed, the arrearage and late charges are tacked on to the end of the loan and future payments are reported as timely. However, if for some reason the borrower does not complete the trial or no longer qualifies (due to some change, i.e., income) the borrower is responsible for all of the arrearage and late fees, leaving some borrowers in a worse position than they were before the trial. So, it is important to know that there is some risk associated with applying for a loan modification.

I frequently hear from clients that their lender told them that they did not qualify for a modification because they were current. The borrower then purposely failed to pay for a couple of months in an attempt to qualify, only to be told that they are now in foreclosure. Some clients are told that they must be working to qualify. An attorney can help to maneuver through some of these complicated areas. Most importantly, seek help early on. The earlier you seek help, the more options that may be available to you. Seeking to save your home on the eve of a trustee’s sale is a nearly impossible task for even the most experienced attorney.

Statute of Limitations

Wendy Koch — Wed, 19 Aug 2009 11:13:35 -0800

The statute of limitations is the time within which you may bring a claim in court. In Washington, many of the statutes of limitations can be found in Chapter 4.16 RCW. For example, an action upon a written contract must be brought within six years; an action for trespass upon real property must be brought within three years; and a civil action for slander must be brought within two years.

The statute of limitations for some claims can be found buried in the statute that creates the claim. For example, an action to foreclose on a materialmen’s lien must be commenced within eight months of recording of the lien. RCW 60.04.141.

Not all limitations periods begin to run upon the happening of some event. For example, the time within which to bring certain personal injury claims begins to run when the harm is “discovered” as opposed to when the harm actually occurred.

In order to preserve your right to bring a claim, consult with an attorney who can advise you of any statute of limitations, otherwise, the opportunity to bring your claim may pass you by.

The Law's Shades of Gray

Wendy Koch — Thu, 13 Aug 2009 12:40:11 -0800

This past weekend my friends and I went river rafting at Flaming Geyser State Park. When we arrived the park was full so we parked a couple of blocks down the road. As we walked to the park we came upon a 2’ x 2’ hole in the ground approximately 3’ feet deep. One of my friends gleefully turned to me and asked, “could I sue and wins lots of money if I had fallen in?” My friends all looked to me waiting to hear a resounding “yes!” but instead they received a lawerly “it depends.” As dissatisfying as that answer was, it is true. Unfortunately, the law is not black and white. Rather, it is the many shades of gray in between.

My friends mistakenly believe that all legal questions can be looked up in some giant book of laws and the answers recited with definitiveness. Of course, if this were true then there would be no practicing of law, but merely the looking up of laws. I began to explain to them that a proper analysis involves thorough fact finding: is this private or public property, are we invitees or trespassers, was the hole purposely or naturally created, does the owner know about the hole…..the list went on. It was at that point that my friends’ eyes glossed over and their interest faded away.

I think their disappointment in my answer stems from our basic need for structure and consistency in the world in which we live our lives. The law made not be as certain as black and white, but utilizing past experience (cases) as our guide, and the similarities and differences between those experiences, outcomes can be predicted within a certain degree of probability. However, before this provides you any comfort, it is important to note that even with the best analysis, judges and juries are the one variable, the proverbial wrench, that are inevitably unpredictable.

Landlord's responsibilities when sheriff executes a writ of restitution in an unlawful detainer action

Shane Yelish — Wed, 22 Jul 2009 16:53:17 -0800

The landlord must provide all necessary manpower and materials to complete the eviction as expeditiously as possible including boxes, large plastic garbage bags, and rolls of plastic sheeting to cover furniture which need to be provided by landlord.

The landlord must store the property if the tenant has served the landlord a written request to store the property not later than three (3) days after service of the writ. The sheriff serves the tenant with the proper form when the eviction occurs.

If the landlord knows the tenant has a disability which prevents or impairs the tenant from requesting storage it is presume the tenant has requested storage unless a written objection from the tenant is made.

The landlord may store the property in “any reasonably secure place” (including the premises) and may sell and dispose of the as provided in RCW 59.18.312.

RCW 59.18.312 requires:

A landlord shall take possession of any property of the tenant found on the premises.

If the total value of the property is less than $100.00, the landlord may sell or dispose of the property except for personal papers, family pictures, and keepsakes after seven days notice to the tenant. The notice shall either be mailed to the tenant's last known address or personally delivered to the tenant. After seven days from the date the notice is mailed or delivered to the tenant, the landlord may sell or dispose of the property After 30 days from the notice, you can sell or dispose of the personal papers, family pictures, and keepsakes.

If the total value of the property exceeds $100.00, the landlord needs to notify the tenant thirty days before the sale date by mailing or personally delivering the notice to the tenant's last known address. The landlord may sell property, personal papers, family pictures, and keepsakes, and dispose of any property not sold

The landlord may apply any income derived from the sale of the tenant's property against moneys due the landlord for drayage and storage of the property. The amount of sale proceeds that the landlord may apply towards such costs may not exceed the actual or reasonable costs for drayage and storage of the property, whichever is less.

Any excess income derived from the sale of such property shall be held by the landlord for the benefit of the tenant for a period of one year from the date of the sale. If no claim is made or action commenced by the tenant for the recovery of the excess income prior to the expiration of that period of time, then the balance shall be treated as abandoned property and deposited by the landlord with the department of revenue pursuant to chapter 63.29 RCW

Property stored shall be returned to the tenant after the tenant has paid the actual or reasonable drayage and storage costs, whichever is less, or until it is sold or disposed of by the landlord

The landlord may remove the tenant’s property to the nearest public property if the tenant has not served the landlord with a written request to store the property within 3 days of service of the writ.

Vehicles left by the tenant must be removed as a private impound with towing and storage arrangements made by the landlord.

Animals are impounded by the Human Society and held pending later release to the tenant or adoption.

Seattlebubbleblog: Interesting Source for Puget Sound Real Estate Info

Dan Dickson — Fri, 17 Jul 2009 10:41:45 -0800

One of my favorite websites I visit to keep a pulse on the Puget Sound residential real estate market is the Seattlebubbleblog. Its founder and editor is Seattle resident named Timothy Ellis who goes by the blog name “The Tim.” http://seattlebubble.com/blog/

The blog has daily posts which include some great graphs, charts and analysis of the Puget Sound real estate market. What makes the posters on the Seattle Bubble Blog unique is their credibility. They were one of a few vocal media sources in Washington State that consistently and loudly predicted the current real estate crash before it happened. In addition to good posts and analysis by “The Tim,” the comment section provides a lively discussion about Puget Sound real estate issues. *Be aware homeowner: many of the comments made are from bloggers who predict continued steep declines in the Puget Sound real estate - so the blog isn’t for the faint of heart.

The effect of local and federal laws as they relate to the residential real estate market in the Puget Sound area are also frequently discussed by the blog posters and authors with links to news articles and additional resources.

The Attorney-Client Privilege and Relationship

Wendy Koch — Thu, 09 Jul 2009 16:53:16 -0800

In Washington State, the attorney-client privilege is defined by RCW 5.60.060(2), which provides as follows: An attorney or counselor shall not, without the consent of his or her client, be examined as to any communication made by the client to him or her, or his or her advice given thereon in the course of professional employment.

The purpose of the privilege is to encourage full and uninhibited communications between attorney and client. Thus, although the statute speaks only to whether the attorney may be questioned about communications with a client, the statute has been interpreted to restrict questioning of the client as well. In a nutshell, the privilege bars evidence of communications between attorney and client only when the communications were intended as confidential.

The client is the holder of the attorney-client privilege. That is to say that only the client may give consent for the attorney to divulge confidential communications. However, the client may waive the privilege in situations where they bring a third party into closed door conferences with the attorney, share the privileged communications with a third party, or confer with the attorney where the conversation may be heard in the open by the public. Other situations of waiver include the client commencing an action against the attorney, and in a criminal case, a plea of insanity or diminished capacity waives the attorney-client privilege.

A corollary to the attorney-client privilege is the ethical rule governing the confidential nature of the attorney-client relationship. The Rules of Professional Conduct (RPC) govern the attorney-client relationship. Once such a relationship has been formed, a lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is reasonably necessary to prevent reasonably certain death or substantial bodily harm, to prevent the client from committing a crime, to prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client’s commission of a crime or fraud in furtherance of which the client has used the lawyer’s services, to secure legal advice regarding compliance with the rules, to establish a claim or defense on behalf of the lawyer in a controversy between the client and attorney, to comply with a court order, or to inform a tribunal about any client’s breach of fiduciary responsibility when the client is serving as a court-appointed fiduciary. RPC 1.16.

Even where an attorney-client relationship has not yet been formed, but the prospective client discusses with a lawyer the possibility of forming such a relationship, a lawyer who has had discussions with a prospective client shall not use or reveal information learned in the consultation, with limited exceptions found in RPC 1.9. RPC 1.18.

Unequivocal waiver of a contract term: what does it look like?

Robert Dickson — Mon, 06 Jul 2009 14:42:41 -0800

In a recent summary judgment motion, the main topic at issue was whether the famed Mike M. Johnson case applied (Mike M. Johnson v. County of Spokane, 150 Wn.2d 375, 78 P.3d 161 (2003)). As many will recall, Mike M. Johnson ("MMJ") states that contract provisions are enforceable unless waived by the provision's benefit ting party. This waiver can be implied through conduct or actions, however, if it is so implied, the conduct/action must be unequivocal for waiver to be valid. MMJ dealt specifically with a contract provision regarding the procedure by which a contractor could receive compensation for changes in the contract (or "change orders").

The contract owner in MMJ at almost every turn notified (often in writing) the contractor that if it wanted additional consideration for changes in the contract, it must satisfy the requirements for change orders and turn in specific documentation and information to the owner. MMJ failed to do so. The court held that even though the contract owner had actual knowledge of the changed circumstances, this wasn't enough. It would have to do more to waive other than simply having actual notice of the changes.

So, the big question remains: if MMJ wasn't waiver, what does waiver look like? I believe that MMJ and another case called American Safety Cas. Ins. Co. v. City of Olympia, 133 Wn.App. 649, 137 P.3d 865 (2006) give us a hint:

In MMJ, the court analyzed an assertion by the plaintiff which said that because the county had actual knowledge of the changed circumstances, that it therefore couldn't deny compensation for mere failure to follow the details of the contract. The court disagreed:

"MMJ argued to the Court of Appeals, and maintains before this court, that when an owner has actual notice of a contractor's protest or claim, that notice, in and of itself, excuses the contractor from complying with mandatory contractual protest and claim procedures. MMJ contends that the decision of Bignold v. King County, 65 Wn.2d 817, 822, 399 P.2d 611 (1965) establishes the 'actual notice' exception . . . [c]ontrary to MMJ's contention, the Court of Appeals in Bignold did not hold that the owner's actual notice of the changed condition in and of itself excused the contractor from complying with the contractual notice provisions. Rather it was the owner's knowledge of the changed conditions coupled with the subsequent direction to proceed with the extra work that evidenced its intent to waive enforcement of the written notice requirements under the contract." Id. at 388-89

From that analysis, the court has clued us into what may look like an unequivocal waiver: actual notice, coupled with directions to proceed. This resembles an estoppel argument in a lot of ways. A contract owner may not be protected if he/she knows about change orders, then directs the contractor to do the changed work. The court seemed to want to avoid the idea of using the contract as a payment shield after an owner draws the contractor into doing change orders.

This idea is echoed in the American Safety case. There, the court further clarified what unequivocal waiver may look like: "[w]e stress that the discussions between the City and American Safety took place after the work was completed, and thus the situation was not one where the City was directing American Safety to perform its obligations under the contract while the parties negotiated the contractual dispute. Had the City directed American Safety to focus on performing work rather than worrying about assembling documentation to comply with contractual provisions, then such situation could arguably be construed as implied waiver. . ." Id. at 772.

Unequivocal waiver of a contract provision would appear to be an instance where a benefited party knows of changed circumstances and directs the other party to more forward, OR, the party is aware of the changed circumstances, then waives the contract procedures by insisting that the work be done and that the contractual formalities be put off or ignored.

Types of Proof Required for Adverse Possession

Brett Beetham — Wed, 24 Jun 2009 09:52:00 -0800

Washington Courts recognize a number of doctrines which allow property owners to quiet title to property and establish new boundary lines, even in the face of a conflicting survey. The most well-known doctrine is adverse possession. Several others include estoppel in pais, parol agreement, and mutual recognition and acquiescence (“mutual acquiescence”). These doctrines contain their own unique characteristics. However, several contain overlapping elements which require similar kinds of proof.

For instance, both adverse possession and mutual acquiescence generally require a showing of certain use of the claimed property for a period of ten years. In short, an attorney’s analysis of one doctrine likely applies to another and the same types of evidence may be gathered to support the related doctrines. Nonetheless, it is important to disassociate the doctrines and separately address each doctrine’s distinct attributes from inception of the lawsuit. Failure to do so may prevent use of the most pertinent doctrine at the summary judgment or trial stage. For instance, in a recent case, plaintiffs prevailed on the theory of mutual acquiescence even where they had only pled claims of adverse possession. Green v. Hooper, 149 Wn. App. 627, 205 P.3d 134 (2009).

The plaintiffs, having failed on their adverse possession claims, finally raised their mutual acquiescence theory on the third and final day of the trial. The trial court, over strenuous objection by the defendants, reasoned that the plaintiffs’ claim of adverse possession was sufficient to put the defendants on notice of the doctrine of mutual acquiescence – given the similar elements of the doctrines and congruous burdens of evidentiary proof. The trial court’s rational was tentatively supported by decisions coming out of Division Two of Washington’s Court of Appeals. That Court has, on previous occasions, stated mutual acquiescence “supplements” the doctrine of adverse possession. See e.g. Lilly v. Lynch, 88 Wn. App. 306, 316, 945 P.2d 727 (1997). The defendants appealed the trial court’s ruling, arguing mutual acquiescence must be separately pled from adverse possession. Division Three of the Court of Appeals agreed. “The doctrine of mutual recognition and acquiescence does not ‘supplement’ adverse possession in the sense that it is contained within a pleaded cause of adverse possession and it is not sufficient, without expressly being pleaded, to give fair notice to a defending litigant where judgment is being sought solely on the theory of adverse possession.” Green, 149 Wn. App. at 640. In so holding, the Green court gave fair-warning to litigants proceeding on alternative, but often interrelated, doctrines commonly used by Washington Courts to settle boundary disputes. Ultimately, plead each doctrine separately to ensure preservation of the most appropriate doctrine for trial.

Important things to keep in mind when facing foreclosure

Robert Dickson — Fri, 12 Jun 2009 16:20:34 -0800

In a recent case, the issue arose as to what options a party has when their home has already been foreclosed upon, and sold in a trustee's sale. Washington's Deed of Trust Act provides direction for this issue in RCW 61.24.130.

As interpreted in In re Marriage of Kaseburg,126 Wash.App. 546, 108 P.3d 1278 (2005), a party waives the right to post-foreclosure-sale remedies under the Deed of Trust Act where the party:

received notice of the right to enjoin the sale;
had actual or constructive knowledge of a defense to foreclosure prior to the sale; AND
failed to bring an action to obtain a court order enjoining the sale

This Act provides a the only manner in which ANY party may prevent or restrain a trustee's sale on any proper ground, once the foreclosure has begun with a "receipt of the notice of sale and foreclosure." Id. at 236.

It would seem that the safeguards required before a trustee's sale can go through, influenced what that legislature allows in post-foreclosure-sale remedies. In other words, even if there is a valid reason to undue a trustee's sale, you must take those steps prior to the sale. IF, of course, you did not receive proper notice and were not aware of the sale, you are NOT barred from bringing an action to stop the sale.

To be safe, if one is facing a foreclosure and his/her home has a scheduled trustee's sale date, the best thing is to hire an attorney to initiate the legal process. At a minimum, therefore, the home owner is not guilty of waiving his or her rights to post-foreclosure-sale remedies and can forestall the process before it is too late.

Loan modification options for property investors (non owner-occupied properties)

Robert Dickson — Mon, 01 Jun 2009 07:32:05 -0800

The Obama legislation, which passed in March, aimed specifically to assist those in danger of losing their primary residence to foreclosure. It was thought that individuals purchasing property for investment (namely those acquiring property then leasing it out) would not be eligible under the new law.

While that has not changed, our office has seen some interesting movement by banks and loan servicers regarding investment properties. Under many circumstances, even the investor may gain some relief through loan modification.

Banks/servicers largely follow the same pattern as the owner-occupied loan modifications. First, they require a signed forbearance agreement, then they require an extensive disclosure of the investor's financial status in the form of a "Hardship Packet". When they have those two things in hand, the servicer/bank will decide whether to modify the loan. The following is what is most often required:

1. Letter describing hardship

2. Last two pay stubs

3. Length of time at current employer

4. One month's complete bank statement

5. Most recent tax return

6. Statement of your complete income (including family members residing with you)

7. Proof of paid property taxes, homeowners insurance, and HOA fees

8. (If self-employed): (a) Profit/loss statements; (b) three pay stubs; (c) last two years tax returns; and (d) business and personal bank statements.

Can You Lose the Right to Damages from a Nuisance if You Sell the Property Before Trial?

Kevin Steinacker — Mon, 18 May 2009 09:56:30 -0800

A recent opinion from the Court of Appeals address the issue of standing (“a party’s right to make a legal claim or seek judicial enforcement of a duty or right” according to Black’s). Division Two handed down its decision in Vance v. XXXL Development, Inc., involving a property owner’s nuisance claim against a developer. The developer had built a 25-foot high concrete block wall just two feet north of the homeowner’s property line. The homeowner sold her home prior to trial, and claimed that the sale price was $100,000 lower due to the nuisance. After the sale, the developer moved to dismiss the suit, claiming that the homeowner no longer had standing to sue.

The developer relied on RCW 7.48.020, which provides that a nuisance action “may be brought by any person whose property is … injuriously affected or whose personal enjoyment is lessened by the nuisance.” Because the statute describes the damages in the present tense, the developer argued that the homeowner lost standing when she sold the home (ie, at the time of trial, she wasn’t one who is injuriously affected or whose enjoyment is lessened). The trial court agreed with the developer.

The homeowner argued that the statute was not meant to be read so narrowly. For example, RCW 7.48.180 allows recovery of damages even after a nuisance has been abated. Further, the homeowner pointed out that seemingly arbitrary outcomes could result: a homeowner who sold the day before trial cannot recover, but one who sells the day after trial can. Also, the tortfeasor would have an incentive to drag out litigation and intensify the nuisance, hoping that the homeowner would be forced to move due to the noxious nuisance before trial.

Division Two agreed with the homeowner’s arguments. It also noted that damages from the nuisance would be more definite if the property had been sold, and emphasized the rule that “the spirit or purpose of an enactment should prevail over express but inept wording.”

Although I agree that statutes generally should be interpreted to mean what they say, Division Two probably made the right decision in this case. The homeowner here appears to have been damaged, and the purpose of the nuisance statutes is not frustrated by allowing her to recover for the damages incurred when she did own the home. It also seems to be a stretch to argue, based solely on the use of the present tense, that the legislature intended to exclude as plaintiffs those who have sold their property after inception of the nuisance. The unanswered question (and there are not enough facts in the opinion to speculate) is whether the developer’s retaining wall actually constitutes a nuisance for which the homeowner should recover. But at least she has the right to argue her claim.

You sued someone and obtained a judgment. Now how do you collect your money?

Wendy Koch — Thu, 14 May 2009 10:52:24 -0800

The first thing you should do is record your judgment at the County Auditor’s office. By recording your judgment, it becomes a lien on all real property owned by the debtor in that county.

You have several options for collecting on your judgment, so take the time to investigate the most efficient way to do so. Judgments in Washington State are good for ten (10) years. If you have not collected on your judgment at the end of the ten year period, you can renew your judgment for another ten (10) years as long as you do so within 90 days of its expiration.

One method of collection is to garnish the debtor’s wages or bank account. You must know where the debtor works or banks and there must be enough funds or income available that are not exempt from garnishment.

A second method of collection is to execute on the debtor’s personal property. This involves taking non-exempt property from the debtor’s residence or business and selling it at auction. You must have sufficient funds upfront, including the Sheriff’s fees, mover’s fees, storage fees, and auction fees.

A third method of collection is to execute on the debtor’s real property. This also involves taking the debtor’s property and selling it at a public sale. Again, the debtor will be permitted a certain amount in equity that is exempt from execution. You must also demonstrate that the debtor did not have sufficient personal property to execute on first.

Finally, you may be able to sell or assign your judgment to a third party such as a collection agency. These companies will either buy your judgment at a reduced amount or will attempt to collect the debt on your behalf, charging a percentage of the judgment or a fee.

In order to find out exactly where the debtor banks and works and to find out the assets available for execution, including how much equity there is, you can have the debtor ordered to go into court and testify under oath in supplemental proceedings. In addition, you may require the debtor to bring documents with him such as his tax return or pay stub.

It is important to remember that even with the availability of these collection tools, you may not be able to collect on your judgment. Some debtors are known as “judgment proof.” This typically means that the debtor does not have enough income or assets to satisfy your judgment or that you simply cannot locate the debtor to determine whether or not there are. Of course, twenty years is a long time and people’s circumstances can change so even if you cannot collect on your judgment right away, it may be worth your while to periodically check the debtor’s status.