wa-law.org > bill > 2023-24 > HB 1569 > Original Bill
The legislature finds that the practices covered by this chapter are matters vitally affecting the public interest for the purpose of applying the consumer protection act, chapter 19.86 RCW.
A violation of this chapter by a declarant, a unit owners association, a managing agent of a unit owners association, or other agent of a unit owners association is not reasonable in relation to the development and preservation of business and is an unfair or deceptive act in trade or commerce and an unfair method of competition for purposes of applying the consumer protection act, chapter 19.86 RCW.
The remedies provided in chapter 19.86 RCW are in addition to any other remedies provided by law.
The legislature finds that the practices covered by this chapter are matters vitally affecting the public interest for the purpose of applying the consumer protection act, chapter 19.86 RCW.
A violation of this chapter by a homeowners' association or an agent of a homeowners' association is not reasonable in relation to the development and preservation of business and is an unfair or deceptive act in trade or commerce and an unfair method of competition for purposes of applying the consumer protection act, chapter 19.86 RCW.
The remedies provided in chapter 19.86 RCW are in addition to any other remedies provided by law.
The legislature finds that the practices covered by this chapter are matters vitally affecting the public interest for the purpose of applying the consumer protection act, chapter 19.86 RCW.
A violation of this chapter by an association of apartment owners or an agent of an association of apartment owners is not reasonable in relation to the development and preservation of business and is an unfair or deceptive act in trade or commerce and an unfair method of competition for purposes of applying the consumer protection act, chapter 19.86 RCW.
The remedies provided in chapter 19.86 RCW are in addition to any other remedies provided by law.
The legislature finds that the practices covered by this chapter are matters vitally affecting the public interest for the purpose of applying the consumer protection act, chapter 19.86 RCW.
A violation of this chapter by a declarant, a master association, a unit owners' association, or an agent of a unit owners' association is not reasonable in relation to the development and preservation of business and is an unfair or deceptive act in trade or commerce and an unfair method of competition for purposes of applying the consumer protection act, chapter 19.86 RCW.
The remedies provided in chapter 19.86 RCW are in addition to any other remedies provided by law.
Except for a nonresidential common interest community described in RCW 64.90.100, RCW 64.90.095, 64.90.405(1) (b) and (c), 64.90.495, 64.90.525, and 64.90.545 apply, and any inconsistent provisions of chapter 58.19, 64.32, 64.34, or 64.38 RCW do not apply, to a common interest community created in this state before July 1, 2018.
Except to the extent provided in this subsection, the sections listed in subsection (1) of this section apply only to events and circumstances occurring on or after July 1, 2018, and do not invalidate existing provisions of the governing documents of those common interest communities. To protect the public interest, RCW 64.90.095 and 64.90.525 supersede existing provisions of the governing documents of all plat communities and miscellaneous communities previously subject to chapter 64.38 RCW.
This section applies to an association subject to this chapter or chapter 64.32, 64.34, or 64.38 RCW, except that subsection (2)(h) of this section only applies to associations subject to this chapter.
An association must retain the following:
The current budget, detailed records of receipts and expenditures affecting the operation and administration of the association, and other appropriate accounting records within the last seven years;
Minutes of all meetings of its unit owners and board other than executive sessions, a record of all actions taken by the unit owners or board without a meeting, and a record of all actions taken by a committee in place of the board on behalf of the association;
The names of current unit owners, addresses used by the association to communicate with them, and the number of votes allocated to each unit;
Its original or restated declaration, organizational documents, all amendments to the declaration and organizational documents, and all rules currently in effect;
All financial statements and tax returns of the association for the past seven years;
A list of the names and addresses of its current board members and officers;
Its most recent annual report delivered to the secretary of state, if any;
Financial and other records sufficiently detailed to enable the association to comply with RCW 64.90.640;
Copies of contracts to which it is or was a party within the last seven years;
Materials relied upon by the board or any committee to approve or deny any requests for design or architectural approval for a period of seven years after the decision is made;
Materials relied upon by the board or any committee concerning a decision to enforce the governing documents for a period of seven years after the decision is made;
Copies of insurance policies under which the association is a named insured;
Any current warranties provided to the association;
Copies of all notices provided to unit owners or the association in accordance with this chapter or the governing documents; and
Ballots, proxies, absentee ballots, and other records related to voting by unit owners for one year after the election, action, or vote to which they relate.
Subject to subsections (4) and (5) of this section, all records required to be retained by an association must be made available for examination and copying by all unit owners, holders of mortgages on the units, and their respective authorized agents as follows, unless agreed otherwise:
During reasonable business hours or at a mutually convenient time and location; and
At the offices of the association or its managing agent.
Records retained by an association may be withheld from inspection and copying to the extent that they concern:
Personnel and medical records relating to specific individuals;
Contracts, leases, and other commercial transactions to purchase or provide goods or services currently being negotiated;
Existing or potential litigation or mediation, arbitration, or administrative proceedings;
Existing or potential matters involving federal, state, or local administrative or other formal proceedings before a governmental tribunal for enforcement of the governing documents;
Legal advice or communications that are otherwise protected by the attorney-client privilege or the attorney work product doctrine, including communications with the managing agent or other agent of the association;
Information the disclosure of which would violate a court order or law;
Records of an executive session of the board;
Individual unit files other than those of the requesting unit owner;
Unlisted telephone number or electronic address of any unit owner or resident;
Security access information provided to the association for emergency purposes; or
Agreements that for good cause prohibit disclosure to the members.
An association may charge a reasonable fee for producing and providing copies of any records under this section and for supervising the unit owner's inspection.
A right to copy records under this section includes the right to receive copies by photocopying or other means, including through an electronic transmission if available upon request by the unit owner.
An association is not obligated to compile or synthesize information.
Information provided pursuant to this section may not be used for commercial purposes.
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.
In addition to the requirements in subsection (2) of this section, an association must comply with the association records requirements in RCW 64.90.495, excluding RCW 64.90.495(2)(h) regarding records related to certain unit resale requirements that are applicable only to units subject to chapter 64.90 RCW. Any provisions in this chapter that are inconsistent with RCW 64.90.495, excluding RCW 64.90.495(2)(h), do not apply.
The manager or board of directors, as the case may be, shall keep complete and accurate books and records of the receipts and expenditures affecting the common areas and facilities, specifying and itemizing the maintenance and repair expenses of the common areas and facilities and any other expenses incurred. Such books and records and the vouchers authorizing payments shall be available for examination by the apartment owners, their agents or attorneys, at any reasonable time or times. All books and records shall be kept in accordance with good accounting procedures and be audited at least once a year by an auditor outside of the organization.
In addition to the requirements in subsections (2) and (3) of this section, an association must comply with the association records requirements in RCW 64.90.495, excluding RCW 64.90.495(2)(h) regarding records related to certain unit resale requirements that are applicable only to units subject to chapter 64.90 RCW. Any provisions in this chapter that are inconsistent with RCW 64.90.495, excluding RCW 64.90.495(2)(h), do not apply.
The association shall keep financial records sufficiently detailed to enable the association to comply with RCW 64.34.425. All financial and other records of the association, including but not limited to checks, bank records, and invoices, are the property of the association, but shall be made reasonably available for examination and copying by the manager of the association, any unit owner, or the owner's authorized agents. At least annually, the association shall prepare, or cause to be prepared, a financial statement of the association in accordance with generally accepted accounting principles. The financial statements of condominiums consisting of fifty or more units shall be audited at least annually by a certified public accountant. In the case of a condominium consisting of fewer than 50 units, an annual audit is also required but may be waived annually by unit owners other than the declarant of units to which 60 percent of the votes are allocated, excluding the votes allocated to units owned by the declarant.
The funds of an association shall be kept in accounts in the name of the association and shall not be commingled with the funds of any other association, nor with the funds of any manager of the association or any other person responsible for the custody of such funds. Any reserve funds of an association shall be kept in a segregated account and any transaction affecting such funds, including the issuance of checks, shall require the signature of at least two persons who are officers or directors of the association.
In addition to the requirements in subsections (2) through (5) of this section, an association must comply with the association records requirements in RCW 64.90.495, excluding RCW 64.90.495(2)(h) regarding records related to certain unit resale requirements that are applicable only to units subject to chapter 64.90 RCW. Any provisions in this chapter that are inconsistent with RCW 64.90.495, excluding RCW 64.90.495(2)(h), do not apply.
The association or its managing agent shall keep financial and other records sufficiently detailed to enable the association to fully declare to each owner the true statement of its financial status. All financial and other records of the association, including but not limited to checks, bank records, and invoices, in whatever form they are kept, are the property of the association. Each association managing agent shall turn over all original books and records to the association immediately upon termination of the management relationship with the association, or upon such other demand as is made by the board of directors. An association managing agent is entitled to keep copies of association records. All records which the managing agent has turned over to the association shall be made reasonably available for the examination and copying by the managing agent.
All records of the association, including the names and addresses of owners and other occupants of the lots, shall be available for examination by all owners, holders of mortgages on the lots, and their respective authorized agents on reasonable advance notice during normal working hours at the offices of the association or its managing agent. The association shall not release the unlisted telephone number of any owner. The association may impose and collect a reasonable charge for copies and any reasonable costs incurred by the association in providing access to records.
At least annually, the association shall prepare, or cause to be prepared, a financial statement of the association. The financial statements of associations with annual assessments of $50,000 or more shall be audited at least annually by an independent certified public accountant, but the audit may be waived if 67 percent of the votes cast by owners, in person or by proxy, at a meeting of the association at which a quorum is present, vote each year to waive the audit.
The funds of the association shall be kept in accounts in the name of the association and shall not be commingled with the funds of any other association, nor with the funds of any manager of the association or any other person responsible for the custody of such funds.
An association must:
Adopt organizational documents;
Adopt budgets as provided in RCW 64.90.525;
Impose assessments for common expenses and specially allocated expenses on the unit owners as provided in RCW 64.90.080(1) and 64.90.525;
Prepare financial statements as provided in RCW 64.90.530; and
Deposit and maintain the funds of the association in accounts as provided in RCW 64.90.530.
Except as provided otherwise in subsection (4) of this section and subject to the provisions of the declaration, the association may:
Amend organizational documents and adopt and amend rules;
Amend budgets under RCW 64.90.525;
Hire and discharge managing agents and other employees, agents, and independent contractors. If an association hires a managing agent, the association must make unit owners third-party beneficiaries of any contract with the managing agent;
Institute, defend, or intervene in litigation or in arbitration, mediation, or administrative proceedings or any other legal proceeding in its own name on behalf of itself or two or more unit owners on matters affecting the common interest community;
Make contracts and incur liabilities subject to subsection (4) of this section;
Regulate the use, maintenance, repair, replacement, and modification of common elements;
Cause additional improvements to be made as a part of the common elements;
Acquire, hold, encumber, and convey in its own name any right, title, or interest to real estate or personal property, but:
Common elements in a condominium, plat community, or miscellaneous community may be conveyed or subjected to a security interest pursuant to RCW 64.90.465 only; and
Part of a cooperative may be conveyed, or all or part of a cooperative may be subjected to a security interest pursuant to RCW 64.90.465 only;
Grant easements, leases, licenses, and concessions through or over the common elements and petition for or consent to the vacation of streets and alleys;
Impose and collect any reasonable payments, fees, or charges for:
The use, rental, or operation of the common elements, other than limited common elements described in RCW 64.90.210 (1)(b) and (3);
Services provided to unit owners; and
Moving in, moving out, or transferring title to units to the extent provided for in the declaration;
Collect assessments and impose and collect reasonable charges for late payment of assessments;
Enforce the governing documents and, after notice and opportunity to be heard, impose and collect reasonable fines for violations of the governing documents in accordance with a previously established schedule of fines adopted by the board of directors and furnished to the owners;
Impose and collect reasonable charges for the preparation and recordation of amendments to the declaration, resale certificates required under RCW 64.90.640, lender questionnaires, or statements of unpaid assessments;
Provide for the indemnification of its officers and board members, to the extent provided in RCW 23B.17.030;
Maintain directors' and officers' liability insurance;
Subject to subsection (4) of this section, assign its right to future income, including the right to receive assessments;
Join in a petition for the establishment of a parking and business improvement area, participate in the ratepayers' board or other advisory body set up by the legislative authority for operation of a parking and business improvement area, and pay special assessments levied by the legislative authority on a parking and business improvement area encompassing the condominium property for activities and projects that benefit the condominium directly or indirectly;
Establish and administer a reserve account as described in RCW 64.90.535;
Prepare a reserve study as described in RCW 64.90.545;
Exercise any other powers conferred by the declaration or organizational documents;
Exercise all other powers that may be exercised in this state by the same type of entity as the association;
Exercise any other powers necessary and proper for the governance and operation of the association;
Require that disputes between the association and unit owners or between two or more unit owners regarding the common interest community, other than those governed by chapter 64.50 RCW, be submitted to nonbinding alternative dispute resolution as a prerequisite to commencement of a judicial proceeding; and
Suspend any right or privilege of a unit owner who fails to pay an assessment, but may not:
Deny a unit owner or other occupant access to the owner's unit;
Suspend a unit owner's right to vote; or
Withhold services provided to a unit or a unit owner by the association if the effect of withholding the service would be to endanger the health, safety, or property of any person.
The declaration may not limit the power of the association beyond the limit authorized in subsection (2)(w) of this section to:
Deal with the declarant if the limit is more restrictive than the limit imposed on the power of the association to deal with other persons; or
Institute litigation or an arbitration, mediation, or administrative proceeding against any person, subject to the following:
The association must comply with chapter 64.50 RCW, if applicable, before instituting any proceeding described in chapter 64.50 RCW in connection with construction defects; and
The board must promptly provide notice to the unit owners of any legal proceeding in which the association is a party other than proceedings involving enforcement of rules or to recover unpaid assessments or other sums due the association.
Any borrowing by an association that is to be secured by an assignment of the association's right to receive future income pursuant to subsection (2)(e) and (p) of this section requires ratification by the unit owners as provided in this subsection.
The board must provide notice of the intent to borrow to all unit owners. The notice must include the purpose and maximum amount of the loan, the estimated amount and term of any assessments required to repay the loan, a reasonably detailed projection of how the money will be expended, and the interest rate and term of the loan.
In the notice, the board must set a date for a meeting of the unit owners, which must not be less than fourteen and no more than 50 days after mailing of the notice, to consider ratification of the borrowing.
Unless at that meeting, whether or not a quorum is present, unit owners holding a majority of the votes in the association or any larger percentage specified in the declaration reject the proposal to borrow funds, the association may proceed to borrow the funds in substantial accordance with the terms contained in the notice.
If a tenant of a unit owner violates the governing documents, in addition to exercising any of its powers against the unit owner, the association may:
Exercise directly against the tenant the powers described in subsection (2)(l) of this section;
After giving notice to the tenant and the unit owner and an opportunity to be heard, levy reasonable fines against the tenant and unit owner for the violation; and
Enforce any other rights against the tenant for the violation that the unit owner as the landlord could lawfully have exercised under the lease or that the association could lawfully have exercised directly against the unit owner, or both; but the association does not have the right to terminate a lease or evict a tenant unless permitted by the declaration. The rights referred to in this subsection (5)(c) may be exercised only if the tenant or unit owner fails to cure the violation within 10 days after the association notifies the tenant and unit owner of that violation.
Unless a lease otherwise provides, this section does not:
Affect rights that the unit owner has to enforce the lease or that the association has under other law; or
Permit the association to enforce a lease to which it is not a party in the absence of a violation of the governing documents.
The board may determine whether to take enforcement action by exercising the association's power to impose sanctions or commencing an action for a violation of the governing documents, including whether to compromise any claim for unpaid assessments or other claim made by or against it.
The board does not have a duty to take enforcement action if it determines that, under the facts and circumstances presented:
The association's legal position does not justify taking any or further enforcement action;
The covenant, restriction, or rule being enforced is, or is likely to be construed as, inconsistent with law;
Although a violation may exist or may have occurred, it is not so material as to be objectionable to a reasonable person or to justify expending the association's resources; or
It is not in the association's best interests to pursue an enforcement action.
The board's decision under subsections (7) and (8) of this section to not pursue enforcement under one set of circumstances does not prevent the board from taking enforcement action under another set of circumstances, but the board may not be arbitrary or capricious in taking enforcement action.
The declaration shall contain the following:
A description of the land on which the building and improvement are or are to be located;
A description of the building, stating the number of stories and basements, the number of apartments and the principal materials of which it is or is to be constructed;
The apartment number of each apartment, and a statement of its location, approximate area, number of rooms, and immediate common area to which it has access, and any other data necessary for its proper identification;
A description of the common areas and facilities;
A description of the limited common areas and facilities, if any, stating to which apartments their use is reserved;
The value of the property and of each apartment, and the percentage of undivided interest in the common areas and facilities appertaining to each apartment and its owner for all purposes, including voting;
A statement of the purposes for which the building and each of the apartments are intended and restricted as to use;
The name of a person to receive service of process in the cases provided for in this chapter, together with a residence or place of business of such person which shall be within the county in which the building is located;
A provision as to the percentage of votes by the apartment owners which shall be determinative of whether to rebuild, repair, restore, or sell the property in event of damage or destruction of all or part of the property;
A provision authorizing and establishing procedures for the subdividing and/or combining of any apartment or apartments, common areas and facilities or limited common areas and facilities, which procedures may provide for the accomplishment thereof through means of a metes and bounds description;
A provision requiring the adoption of bylaws for the administration of the property or for other purposes not inconsistent with this chapter, which may include whether administration of the property shall be by a board of directors elected from among the apartment owners, by a manager, or managing agent, or otherwise, and the procedures for the adoption thereof and amendments thereto. If an association hires a managing agent, the association must make apartment owners third-party beneficiaries of any contract with the managing agent;
Any further details in connection with the property which the person executing the declaration may deem desirable to set forth consistent with this chapter; and
The method by which the declaration may be amended, consistent with this chapter: PROVIDED, That not less than 60 percent of the apartment owners shall consent to any amendment except that any amendment altering the value of the property and of each apartment and the percentage of undivided interest in the common areas and facilities shall require the unanimous consent of the apartment owners.
Except as provided in subsection (2) of this section, and subject to the provisions of the declaration, the association may:
Adopt and amend bylaws, rules, and regulations;
Adopt and amend budgets for revenues, expenditures, and reserves, and impose and collect assessments for common expenses from unit owners;
Hire and discharge or contract with managing agents and other employees, agents, and independent contractors. If an association hires a managing agent, the association must make unit owners third-party beneficiaries of any contract with the managing agent;
Institute, defend, or intervene in litigation or administrative proceedings in its own name on behalf of itself or two or more unit owners on matters affecting the condominium;
Make contracts and incur liabilities;
Regulate the use, maintenance, repair, replacement, and modification of common elements;
Cause additional improvements to be made as a part of the common elements;
Acquire, hold, encumber, and convey in its own name any right, title, or interest to real or personal property, but common elements may be conveyed or subjected to a security interest only pursuant to RCW 64.34.348;
Grant easements, leases, licenses, and concessions through or over the common elements and petition for or consent to the vacation of streets and alleys;
Impose and collect any payments, fees, or charges for the use, rental, or operation of the common elements, other than limited common elements described in RCW 64.34.204 (2) and (4), and for services provided to unit owners;
Impose and collect charges for late payment of assessments pursuant to RCW 64.34.364(13) and, after notice and an opportunity to be heard by the board of directors or by such representative designated by the board of directors and in accordance with such procedures as provided in the declaration or bylaws or rules and regulations adopted by the board of directors, levy reasonable fines in accordance with a previously established schedule thereof adopted by the board of directors and furnished to the owners for violations of the declaration, bylaws, and rules and regulations of the association;
Impose and collect reasonable charges for the preparation and recording of amendments to the declaration, resale certificates required by RCW 64.34.425, and statements of unpaid assessments;
Provide for the indemnification of its officers and board of directors and maintain directors' and officers' liability insurance;
Assign its right to future income, including the right to receive common expense assessments, but only to the extent the declaration provides;
Join in a petition for the establishment of a parking and business improvement area, participate in the ratepayers' board or other advisory body set up by the legislative authority for operation of a parking and business improvement area, and pay special assessments levied by the legislative authority on a parking and business improvement area encompassing the condominium property for activities and projects which benefit the condominium directly or indirectly;
Establish and administer a reserve account as described in RCW 64.34.380;
Prepare a reserve study as described in RCW 64.34.380;
Exercise any other powers conferred by the declaration or bylaws;
Exercise all other powers that may be exercised in this state by the same type of corporation as the association; and
Exercise any other powers necessary and proper for the governance and operation of the association.
The declaration may not impose limitations on the power of the association to deal with the declarant which are more restrictive than the limitations imposed on the power of the association to deal with other persons.
Unless otherwise provided in the governing documents, an association may:
Adopt and amend bylaws, rules, and regulations;
Adopt and amend budgets for revenues, expenditures, and reserves, and impose and collect assessments for common expenses from owners;
Hire and discharge or contract with managing agents and other employees, agents, and independent contractors. If an association hires a managing agent, the association must make lot owners third-party beneficiaries of any contract with the managing agent;
Institute, defend, or intervene in litigation or administrative proceedings in its own name on behalf of itself or two or more owners on matters affecting the homeowners' association, but not on behalf of owners involved in disputes that are not the responsibility of the association;
Make contracts and incur liabilities;
Regulate the use, maintenance, repair, replacement, and modification of common areas;
Cause additional improvements to be made as a part of the common areas;
Acquire, hold, encumber, and convey in its own name any right, title, or interest to real or personal property;
Grant easements, leases, licenses, and concessions through or over the common areas and petition for or consent to the vacation of streets and alleys;
Impose and collect any payments, fees, or charges for the use, rental, or operation of the common areas;
Impose and collect charges for late payments of assessments and, after notice and an opportunity to be heard by the board of directors or by the representative designated by the board of directors and in accordance with the procedures as provided in the bylaws or rules and regulations adopted by the board of directors, levy reasonable fines in accordance with a previously established schedule adopted by the board of directors and furnished to the owners for violation of the bylaws, rules, and regulations of the association;
Exercise any other powers conferred by the bylaws;
Exercise all other powers that may be exercised in this state by the same type of corporation as the association; and
Exercise any other powers necessary and proper for the governance and operation of the association.
This act may be known and cited as the common interest community unit owners protection act.