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Sweeping New Washington Legislation Impacts All HOAs & COAs

| Jan 31, 2019 | Homeowners' Associations |

The Washington Legislature in 2018 enacted a
comprehensive set of new statutes governing Homeowners’ Associations (“HOAs”) and
condominium owners’ associations (“COAs”).
This new legislation is entitled the Washington Uniform Common Interest
Ownership Act (“WUCIOA”), and it became effective July 1, 2018.  The new legislation is intended to clarify issues
and resolve uncertainties that existed under prior law, which consisted of one
set of statutes for COAs and a different set of statutes for HOAs.

This new legislation is based upon the national Uniform
Common Interest Ownership Act that was developed by a team of attorneys and
other professionals involved in association-related work.

While the new legislation significantly changes
Washington law in many respects, it will not apply to the majority of
existing Associations (and their planned communities).  That is because it specifically exempts
smaller communities with 12 or few units that have annual assessments of less
than $300.00 per unit from most of its provisions.  Additionally, all HOAs and COAs that were
already in existence on July 1, 2018 will continue to be governed (at least primarily)
by the prior HOA or COA statutes (RCW 64.34 or RCW 64.38) and their existing
governing documents unless those communities amend their governing
documents to specifically opt to be governed by the new 2018 HOA/COA legislation.

Still, certain provisions of the new legislation will
apply to all planned communities and HOAs/COAs regardless of when they
were created and regardless of whether they vote to be governed by the new
legislation.  The universally applicable provisions
include §120 that sets forth the process to amend the governing documents to
subject the community to the new legislation.
§120 requires a minimum 67% vote (of a 30% quorum) to subject the
community to the new legislation.

Additionally, the budget provisions of WUCIOA §326 are
applicable to all existing HOAs and COAs.
§326 replaces RCW 64.34.308 (3) and (4) of the prior Washington
Condominium Act and RCW § 64.38.025 (3) and (4) of the prior Homeowner’s
Association Act.  It (a) requires the
Board to provide a copy and summary of the proposed budget to all owners, (b) sets
a date for the owners to vote on the budget, which date is 14 to 50 days after
the budget has been provided to the owners, and (c) provides that the proposed budget
is adopted unless the majority of all owners vote to reject it.  Accordingly, the budget may be adopted even
if there is no quorum  present at the general
meeting to vote on it.  §326 also sets forth
the specific information a budget summary must contain.

For those HOA and COAs subject to the 2018 legislation,
there are many new provisions that should be reviewed and understood in order
to comply with its requirements.  There
will be a learning curve involved for all HOAs and COAs subject to the new
legislation and the attorneys who advise them.
Some of the major changes under the new legislation relate to requirements
and procedures applicable to HOA/COA records, restrictions on the use of
houses/units, Board meetings, the use of electronic notices to owners, Board decisions
made without an actual meeting, the makeup and operation of HOA/COA committees
and the collection and priority of Association liens.  There are many other changes as well.  The 2018 legislation is quite comprehensive in
scope.

If HOA/COA Board members or owners have questions or
concerns regarding the governance and operation of your Association under
either the new or the prior legislation (that remains in effect for many
Associations), please do not hesitate to contact our firm.  We can help.

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