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July 2018 – Washington Uniform Common Interest Ownership Act (WUCIOA)

Washington Uniform Common Interest Ownership Act (WUCIOA)

Written by: Theresa M. Torgesen, Esq.

Sound Legal Partners

 

What is it?
  • 135 page bill passed by the legislature in March – Takes effect July 1, 2018
  • Still in bill form (SSB 6175) – RCW expected Fall 2018
  • Originally intended to replace existing statutes – now opt in only
How does it affect existing communities?
  • Opt In – Section 120:
    • 1) Amend governing documents based on existing amendment requirements
    • 2) Amend governing documents with WUCIOA procedure:
      • a. Board or 20% of owners propose amendment
      • b. 30 day notice to all owners and hold meeting
      • c. After meeting, 2nd notice to owners with ballot
      • d. Amendment deemed approved if 30% of owners participate and 67% of participants approve
  • Budgets – Section 326 – Very similar to HOA and Condo Acts except:
    • 1) Requires 14-50 days’ notice, instead of 14-60 days
    • 2) Budget content changes [Section 326(2)]
    • 3) Clarifies special assessments require same process
What will be different for future communities?
Applies to all HOAs, condos and co-ops (Common Interest Communities – “CICs”) created after July 1, 2018

 

Changes for just new HOAs:
  • Incorporation before first sale – for-profit, non-profit or LLC (Section 301)
  • Resale Certificates and Public Offering Statements (Sections 402, 403 & 409)
  • Super Priority Lien – with $2,000 in costs and attorneys’ fees (Section 318)
  • Non-Judicial Foreclosure [Section 318(13)]
  • Declaration Amendment Process (Section 218)
  • Terminology – “Units”
Changes for just new Condos and Co-ops:
  • Open Board meetings required, except for executive session (Section 310)
  • Email voting and notice allowed (Sections 312 and 324)
  • Regulations of flags, political signs and solar panels (Section 323)
  • Options for Declaration Amendment Process [Section 218(9)-(13)]
Changes for all new CICs:
  • Association powers and duties – must v. may (Section 302)
    • (1) An association must:
      • (a) Adopt organizational documents;
      • (b) Adopt budgets as provided in section 326 of this act; 
      • (c) Impose assessments for common expenses and specially allocated expenses on the unit owners as provided in sections 117(1) and 326 of this act;
      • (d) Prepare financial statements as provided in section 327 of this act; and 
      • (e) Deposit and maintain the funds of the association in accounts as provided in section 327 of this act.
    • Noteworthy “mays”:
      • Move in/Move out fees
      • Lender questionnaire fees
      • Suspend owner’s rights for delinquent assessments, but NOT voting
      • Enforcement against tenants (fines)
      • Require nonbinding dispute resolution (mediation) to resolve dispute before litigation
  • Association loan authority and approval process [Section 302 (4)]
  • Association records – list of what must be kept (Section 320)
  • Association meeting notice – 14-50 days for annual, special and budget (Section 310)
  • Board meeting notice must be sent to all owners (Section 310)
  • Process for rules adoption (owner comment period) (Section 322)
  • Annual Audit – required if annual assessments are $50k or more – if less, can be waived by majority of owners. (Section 327)  –  Different from Condo Act (if fewer than 50 units, can be waived by 60%) and HOA Act (waiver by 67% present at a meeting)
  • Management Company Transition:
    • Section 320(8): An association’s managing agent must deliver all of the association’s original books and records to the association immediately upon termination of its management relationship with the association, or upon such other demand as is made by the board. An association managing agent may keep copies of the association records at its own expense.
  • Developer Transition (Section 304 and 305)
Posted by: nwmanagementgroup on July 25, 2018
Posted in: Uncategorized