Counties seek temporary HOA fee exemption after tax foreclosure; bill would extend grace period to one year

House Bill 3,545 would temporarily exempt properties managed by homeowners associations or condominium associations from HOA assessments while those properties are owned by a county after tax foreclosure; a dash‑1 amendment heard March 17 extends the proposed exemption from six months to one year.

Representative Cyrus Javedi, sponsor of the bill, said counties do not voluntarily sign HOA covenants and should not be forced to use taxpayer dollars to pay private fees that were contracted by prior owners. “These aren’t county obligations,” Javedi said. “Once the property is sold or transferred, the new owner will pay the total accrued fees.”

Clatsop County officials described a local example they say illustrates the problem: in one subdivision 30,000 fish died after a dam repair, triggering a $3.7 million settlement that led the HOA to sharply raise fees. Clatsop County acquired two lots through tax foreclosure and — because of a prior Oregon Supreme Court ruling — was required to pay HOA assessments while it held title. Monica Steele, assistant county manager for Clatsop County, told the committee the county has paid $61,209.51 in HOA fees for those two lots as of March 1, 2025. Steele and Heidi Tandy, Clatsop’s director of assessment and taxation, said auctions for the properties drew no bids at a minimum price of $1 and that counties face a lengthy tax‑foreclosure timeline that can extend six years from the missed tax payment to county acquisition and sale.

County counsel explained that accrued charges prior to the county’s taking title would generally be extinguished by the foreclosure statute, but assessments that accrue while the county holds title continue unless the bill exempts them. County counsel said the intent was that the accrued fees would become a lien on the property and be resolved at closing when the property is sold, but he acknowledged that the precise mechanics would need clarification in follow‑up drafting.

Proponents — including the Association of Oregon Counties and Columbia and Clatsop county officials — urged the committee to adopt the dash‑1 amendment to give counties up to one year to find responsible buyers before HOA assessments resume. Justin Lowe of the Association of Oregon Counties said taxpayers should not be asked to subsidize private HOAs when counties are already strained for essential services.

Opponents, including lawyers and advocates for associations, told the committee the bill would harm the financial stability of HOAs and condominiums and shift costs onto remaining owners. Ashley Yura of VF Law, representing many associations, said that the bill as drafted appears to exempt counties from assessments without creating a lien and that the misunderstanding of lien mechanics must be addressed. Sarah Ianni of the Oregon Legislative Action Committee for Community Associations argued the change would set a precedent that could normalize nonpayment and worsen associations’ cash flow.

Committee members asked detailed questions about how accrued fees would be resolved at sale, whether liens would be created, and what happens if a county holds a property longer than a year. County witnesses said that if a county holds title more than the exemption window, assessments would continue to accrue and would be paid by the purchaser when the property transfers; county counsel said the likely mechanism is a lien addressed at closing but that the details were not fully worked out and may need statutory clarification.

Clatsop County officials and local commissioners urged the committee to consider amendments that would allow counties to transfer title back to HOAs for $0 or otherwise help associations protect their lien interests; proponents also suggested HOAs sometimes could waive fees to facilitate sale. Witnesses emphasized the bill would not absolve future owners of fees; rather, it would shift timing of when HOA charges are paid.

No final committee vote was recorded on March 17; the bill will return for further work and possible redrafting to address lien language and the financial impacts raised by HOA representatives.