[WSBARP] "Ratification" Of HOA Budget and Reality Check

[Paul Neumiller]

Some listservers have emailed me privately and suggested that the HOA may be correct because of the following language found in new RCW64.90.525:   "Unless at that meeting the unit owners of units to which a majority of the votes in the association are allocated or any larger percentage specified in the declaration reject the budget, the budget and the assessments against the units included in the budget are ratified, whether or not a quorum is present."

The thought is that by not putting the budget to an actual vote, then a majority of the members didn't reject the budget, and so the new budget is deemed ratified.

But it still seems to me that the members have to actively vote on the matter.  See RCW 64.38.035(3) "The notice of any meeting shall state the time and place of the meeting and the business to be placed on the agenda by the board of directors for a vote by the owners, including the general nature of any proposed amendment to the articles of incorporation, bylaws, any budget or changes in the previously approved budget that result in a change in assessment obligation, and any proposal to remove a director.")

It seems to me that the WA legislature is requiring an actual vote.  In shifting the burden of the Board and favoring the Board, note that it takes a majority to reject the budget rather than requiring a majority to accept the new budget.

Even in the notorious case of Casey v. Sudden Valley Community Association (182 Wn.App. 315 (Div. 1 2014), there was an actual vote.



[cid:image002.jpg at 01D430BB.370CCB70]



From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Paul Neumiller
Sent: Thursday, August 9, 2018 4:09 PM
To: wsbarp at lists.wsbarppt.com
Subject: [WSBARP] "Ratification" Of HOA Budget and Reality Check


I have been approached by a Chapter 64.38 HOA who has a creative take on the requirement of the members to "ratify" the annual budget.  For years, the HOA has published the annual budget and sent the proper notices and then held its annual meeting within the proper time limits.  Then the Board presents the budget at the annual meeting but, in their own words, "as long as the majority of the membership did not notify the board that they reject the budget, we considered the budget ratified at the time of the annual meeting."  As a clarification, the HOA President wrote to me and stated "In addition to publishing a high level budget a month before our annual meeting, we review the budget at our annual meeting.  We do not call for a vote.  Again, our understanding is that as long as the membership does not voice rejection of the budget, we considered it ratified."



OK, Chapters 64.38 and 64.90 (under the budget provision which applies to "old" HOAs) do not define "ratify" or "ratification" but common sense and other sources indicate that "to ratify" requires an affimative action or vote.    It seems this HOA is equating "to ratify" with "to acquiesce."  In case I am missing something here and before I advise them they are doing it wrong (tactfully, of course), I wanted to throw it out to the collective hive for a reality check first.  Does "ratification" of the budget mean the members have to affirmatively take a vote?




-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20180810/ca1d87e0/attachment.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 12625 bytes
Desc: image002.jpg
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20180810/ca1d87e0/image002.jpg>