Which Liens Survive a County Tax Foreclosure in Washington State?

 Which Liens Survive a County Tax Foreclosure in Washington State?

With many of the Washington Tax Foreclosures coming soon, we thought we would do a little blog liens that survive a tax foreclosure in Washington State (this is informational only and not legal advice - please consult your attorney if you wish to purchase at an auction). 

When a property goes through a county tax foreclosure in Washington, most people assume the foreclosure wipes out all liens. But that’s not the whole story. While many liens are cleared, several important categories survive the tax sale — and buyers need to know exactly what they may still be responsible for.

Below is a clear breakdown of which liens are wiped out and which continue to encumber the property after foreclosure.

Liens That Survive a County Tax Foreclosure

1. Federal IRS Tax Liens (When Not Properly Noticed)

A tax foreclosure does not automatically extinguish federal tax liens. Under federal law (26 U.S.C. § 7425):

• The county must send proper written notice to the IRS.

• If the IRS doesn’t receive lawful notice, the lien survives the sale.

• Even if extinguished, the IRS gets 120 days to redeem the property after the sale.

This is one of the most common lingering liens encountered after tax sales.

2. Utility Liens (Water, Sewer, Stormwater)

Many municipal utility charges in Washington run with the land, not the owner. These are statutory super-priority liens created under RCW 35.21, RCW 35.67, RCW 36.94, and related laws.

These can include unpaid:

• Water bills

• Sewer charges

• Storm drainage fees

• Irrigation district assessments

Because they are statutory liens, they are not wiped out by a general tax foreclosure.

3. Local Improvement District (LID / ULID) Assessments

Local Improvement District and Utility Local Improvement District assessments remain attached to the property unless:

• The foreclosure itself was based on the LID delinquency.

If the tax foreclosure was for general property taxes, the LID/ULID assessments survive and remain due after the sale.

These assessments can be significant and often surprise investors who expected a “clean slate.”

4. Environmental Liens (State and Federal)

Environmental cleanup obligations are another category of liens that do not get extinguished. These include:

• Washington MTCA (Model Toxics Control Act) liens

• EPA CERCLA Superfund liens

• Hazardous waste cleanup obligations

Environmental liabilities are considered super-priority and remain attached to the land regardless of ownership changes.

5. Certain Government Fines and Municipal Assessments

Some government-imposed obligations are not traditional liens but still survive foreclosure if the authorizing statute states that the charge runs with the land.

These may include:

• Nuisance abatement costs

• Weed or brush clearing charges

• Building code enforcement assessments

• Solid waste cleanup charges

• Health department orders

If the law says the obligation attaches to the property, then tax foreclosure does not remove it.

Liens That Are Usually Wiped Out

While several liens survive, most private liens do not. A Washington tax foreclosure generally removes:

• Mortgages and deeds of trust

• Judgment liens

• Mechanic’s/construction liens

• HOA liens (for amounts owed before the sale)

• Lis pendens (other than condemnation actions)

These lienholders typically lose their security interest entirely once the county completes the foreclosure process.

Bottom Line

A county tax foreclosure in Washington is not a clean-slate event. While many liens are extinguished, several major categories — including federal tax liens (under certain conditions), utility liens, LID/ULID assessments, environmental liens, and some municipal assessments — can remain attached to the property.

Anyone buying at a tax foreclosure sale should perform careful due diligence to determine:

• Whether the IRS was properly noticed

• Whether utility or LID liens are outstanding

• Whether any environmental actions are pending

• Whether the county is foreclosing on general taxes or an improvement district assessment

Failing to check these items can mean unexpected costs after purchase.

Our investment branch Snohocap.com can help you are looking at purchasing at a tax foreclosure or simply looking to invest in Commercial Real Estate. 

Our Contact: 

Weitz Commercial 

Scott@weitzcommercial.com

T: 206-306-4034