Summary of HOA Legislative Updates

The history of homeowner association (HOA) regulation in Washington State serves as a prologue to the current chapter.
In 1971, the Washington legislature adopted the Horizontal Property Regimes Act, which was meant to establish a statutory framework for condominiums. The problem, however, was that the HPR Act was geared toward older building-type condos with shared hallways and stairs. Washington also had no equivalent of the real estate located regime set up by the Uniform Common Interest Ownership Act (UCIOA). For that reason, the Washington State Register of Condominiums Act was passed in 1963, which requires that condominiums be registered with the Washington Secretary of State.
In 1990, the Washington legislature adopted the Washington Common Interest Ownership Act (WCIOA), which created a statutory framework that mirrors UCIOA. WCIOA was modeled on UCIOA, but it left the much-needed modernization of the real estate located act for another day. That day has finally come.
Big changes are here . Recent legislation in Washington has made significant changes to the laws governing HOAs. The WCIOA corrections act (HB 1701) introduced the following changes:

  • Standardized the language and requirements of 64 Property to make the sections of the act governing condominiums and HOAs more uniform.
  • Clarified that the powers of the HOA include: operating the common interest community; promulgating rules; imposing and collecting charges and assessments; protecting the common elements; and many other things. See RCW 64.90.305.
  • Strengthened the provisions regarding SOAPs and compliance with SOAP requirements. See RCW 64.90.630(3)(c) and (d).
  • Changed the method of voting for boards that take official actions without a meeting. See RCW 64.90.215(1).

Other bills passed during the most recent legislative session will be discussed here soon.
Much like prior groundbreaking legislation in this area, these changes have been a long time coming. But it’s never too late to do the right thing.

Implications for Residents and HOA Boards

For homeowners, the most significant change centers around foreclosure. The new law will have the effect of putting a check on associations’ ability to pursue foreclosure on delinquent assessments by requiring that associations prepare and provide a notice to the homeowner prior to initiating the foreclosure process. That said, what’s remarkable is the balance that the changes to the law strike in addressing the concern over the lingering impact of liens on homeowners who are underwater or in a short sale situation. Unlike other legislation that has attempted to eliminate the possibility that HOAs could foreclose on liens that they held (in order, doubtless, to appease certain special interest groups who strongly object to the notion of a HOA foreclosing on a property), this recent legislation retains associations’ ability to foreclose but provides for the possibility that delinquencies can be satisfied if the property is sold as part of a short sale. The difference being the delinquencies are paid from the net proceeds for the sale rather than the foreclosure process, which means that there is more than one way to achieve the goal of collecting delinquencies.
For homeowners, the most significant change is the adoption of a code of ethics for board members. The new ethics provisions requires board members to conduct themselves in an ethical manner. The difficulty with the implementation of the code of ethics is that there isn’t an effective mechanism for enforcing violations. While the code of ethics will now be adopted as part of the governing documents, it appears that is may be left for members to raise the issue of a violation, and raised with the board as opposed to a complaint process being formally established that would include the right to hearing, decision, sanctions, etc. Its also going to be a challenge to determine when a violation has occurred, though it appears that violations may be based on a subjective standard rather than objective standard.
For the boards that govern HOAs, the limitations on foreclosure actions over members’ delinquencies is likely to result in a much more formal process being developed and followed by associations to enforce delinquencies. In addition, while the outcome of this process will vary from association to association, the legislative enactments will also likely result in shorter statutes of limitations for filing affirmative actions against members where members are in default of their obligation to the association.

Key Dates for Compliance

Most of the new laws will not go into effect until July 1, 2018. Key exceptions are amendments regarding:
The new statute will also go into effect on July 1, 2018. The law requires a lot of preparing by your Association and your community manager to produce the new forms, handbooks, and policy statements that the HOA law requires. We recommend HOAs work to produce appropriate materials as soon as possible to comply with the law by its effective date. Particularly time consuming is the preparation of rules packets. All homeowners must personally receive a copy of the association’s act and any rules by July 1, 2018. Association managers, directors, and members can use the full implementation period to prepare for the transition to the new laws. HOAs will be especially challenged in complying with the Act’s requirements in the following areas: For more information, refer to our post highlighting tips and compliance strategies for Washington community associations. A home owner not in compliance may be subject to sanctions for failure to comply with the governing documents of the HOA and their own declaration of covenants. Associations must notify members whenever possible of new requirements and the penalties for not complying, as soon as they learn of new requirements that they need to include in their rules packets.

Legal Help and Resources for Residents

For homeowners looking to navigate these new laws and exercise their rights under Washington State Regulation 64, a variety of legal resources are available. State government agencies provide online access to laws, legal guides, and consumer protections, although legal advice can only come from an attorney.
The Washington State Developmental Disabilities Council provides a handbook for people with disabilities detailing how to file complaints against Washington Associations of Apartment Owners (HOAs). Resources for disabled individuals are also available from the Washington State Human Rights Commission, which investigates housing complaints outside of the HOA system, including those not related to disability.
The Office of the Secretary of State provides the Consumer Protection Handbook for Washington Residents online, which includes information about consumer protection laws, citizen rights when buying or renting a home, and legal resources . The Washington State Office of the Attorney General also maintains a webpage on Housing & Residential Landlord/Tenant Issues in Washington State, which includes information and links on associations and HOAs. Finally, the Washington State Public Disclosure Commission provides an FAQ pertaining to financial disclosures for homeowners associations in Washington. Legal Aid and advocacy groups also serve as important legal support resources for Washington State homeowners. The Northwest Justice Project provides legal guidance and advocacy for individuals from low-income households. The Hmong Association of Washington also assists its residents with a variety of community services, including financial assistance for struggling families.

What Lies Ahead: Predictions and Potential Changes

As the landscape of new HOA laws continues to evolve, industry experts predict a lean in favor of more oversight and regulation in the coming years. Experts anticipate that recent revisions will pave the way for additional amendments aimed at improving financial disclosures and enacting stricter guidelines around fair enforcement of policies and procedures. This progression, however, will likely be gradual. "HOA law still has a long way to go," notes attorney F. Michael Dunn of Peterson Russell & Feig, in Seattle, WA. "As more people learn about their rights and the law , there will probably be a push to tweak the laws and laws are often proposed but not passed." Some legal experts cite a need for lawmakers to strike a balance in their ongoing efforts to improve HOA statutes and regulations. King County’s Public Safety and Human Services Committee hopes to achieve just that by considering potential tweaks to the legislation’s original language. The refinements could include increasing enforcement power for the Department of Licensing, creating penalties for noncompliance beyond the lien process and identifying alternatives to the exemption for older condominiums. Meanwhile, lawmakers will continue to evaluate the direction that Washington State HOA law should take in the future. "The short term impact of legislative tweaks is very limited and the provision that allows older condominiums to take almost no action against delinquent owners will really stay with us for some time," predicts Dunn. "Most people in HOA and condominium law are in wait and see mode."