What is a Judgement Lien
Typically, when a party obtains a judgment, the judgment becomes a lien (judgment lien) against real property owned by the judgment debtor in the county in which the judgment is recorded. In Oregon, the judgment automatically becomes a lien against the judgment debtor’s property where the judgment was obtained. Additional steps are required to record the judgment in other counties.
In the event of a bankruptcy, or if the judgment debtor claims a homestead exemption, the judgment lien places the judgment creditor in the position of a secured party, entitling the judgment creditor to a priority over unsecured creditors.
For example, if a judgment debtor filed bankruptcy, and claimed a homestead exemption, and the judgment debtor’s equity in the property exceeded the homestead exemption by $100,000, the $100,000 would be available to the judgment creditor, to the extent of the judgment.
Washington, however, has established different requirements, which can be a trap for the unwary.
A Judgement Lien in Washington can Oregon Vary
Like Oregon, when a judgment is obtained, it is automatically recorded in the county where the judgment was obtained. If the debtor owns real property in that county, the judgment will be reflected in a title report against the property, whether or not the real property is residential or commercial.
However, Washington, unlike Oregon, has a special statutory requirement requiring a judgment to be separately recorded.
RCW 6.13.090 provides in relevant part:
“A judgment against the owner of a homestead shall become a lien on the value of the homestead property in excess of the homestead exemption from the time the judgment creditor records the judgment with the recording officer of the county where the property is located….”
This seems like a seemingly useless act since the judgment is already of record in that county. Regardless, last month, the U.S. District Court for the Eastern District of Washington upheld a decision by the Bankruptcy Court requiring the second recording, regardless of extenuating circumstances in the case.
The caveat is that, whenever you obtain a judgment in Washington, and you seek to perfect that judgment against the judgment debtor’s personal residence, it is necessary to separately record the judgment pursuant to RCW 6.13.090, and you cannot rely on the automatic recording of the judgment, even in the county where the judgment was obtained.