Senate Bill Proposes to Repeal Condo and HOA Laws
On January 17, 2024, the Senate Law and Justice Committee took testimony on SB 5796, a massive 193-page bill which proposes major changes to the law of condominiums, cooperatives and homes governed by a HOA. In a nutshell, this legislation repeals existing condominium and HOA law in favor of the Washington Uniform Common Interest Ownership Act (WUCIOA). WUCIOA is a very top-heavy and process-intensive statute that governs “common interest communities” (CIC’s) and “plat communities” created since July 1, 2018. The only WUCIOA exemption is for communities with fewer than 12 homes and dues of less than $300 per year. A laundry list of the elements of WUCIOA appears in this blog post – click here.
In a nutshell, SB 5796 would apply WUCIOA to all condominiums, cooperatives or HOA communities, except those previously exempt, regardless of when the community was formed. In addition, it mandates a process to remove illegal restrictions (even though they are already void ab initio), it prohibits adverse possession claims for common elements, (even though those are very weak to begin with), it mandates provisions for electronic attendance at meetings subject to onerous verification requirements, it prohibits restrictions on storing compost, garbage or recycling receptacles other than behind screening and importantly, it requires Public Offering Statements for new construction and Resale Certificates for everything else, which must be provided by the Association no later than the date of a purchase and sale agreement. Sellers must pay for the production of the Resale Certificate and for any updates while Buyers retain the unilateral right to rescind a transaction for five days following delivery of the document. Very few if any smaller Associations will have the human or financial resources to comply with these new requirements. In order to comply, most Associations will have to hire professional management.
A little background may be helpful. Washington’s first condominium act, (RCW 64.32), was passed in 1963. It was replaced in 1989 with RCW 64.34, the Washington Condominium Act. In 1995, the legislature enacted RCW 64.38, which governs non-condominium HOA’s. Then, in 2018, the Legislature passed WUCIOA, which contained 134 pages. The bill in question, SB 5796, runs to 193 pages. The proponents of SB 5796 claim that it will eliminate this “patchwork”, however they appear to not have considered the burden this proposal will place on the human and financial resources of small condominiums or HOAs.
To view the current status of the bill, type “5796” into the search box on this website: https://apps.leg.wa.gov/billinfo/
Contact Helsell Fetterman’s Real Estate and Land Use practice group with any questions at mspence@helsell.com or at 206 292-1144.
