[WSBARP] WUCIOA

Tue Jul 24 15:03:40 PDT 2018

Paul, what happened is that the proposed Legislation got put into the
blender near the end and it came out quite a mess. Those who worked on it
for years, I think it is fair to say, were not pleased. One of the areas
that got a little crazy was the application to pre-existing CICs, but the
way it worked out, it is pretty clear that it doesn't apply to pre-existings
unless they amend to opt in.

A prior version, to the one that got passed, had a provision that would have
allowed a pre-existing CIC to amend its declaration to allow it to do
anything that could be done under the new Act, sort of a pick and choose
approach. Unfortunately, that got axed and the provision now is, you can
choose to choke on the whole thing, or none of it at all. 

The only piece that is mandatory for pre-existing associations is the
Legislature's answer to Casey v. Sudden Valley, the part about how budgets
(including assessments, duh) get passed. It is slightly different from the
HOA act provision so it is worth a look. Here it is:

NEW SECTION. Sec. 325. ADOPTION OF BUDGETS—ASSESSMENTS AND SPECIAL
ASSESSMENTS. (1)(a) Within thirty days after adoption of any proposed budget
for the common interest community, the board must provide a copy of the
budget to all the unit owners and set a date for a meeting of the unit
owners to consider ratification of the budget not less than fourteen nor
more than fifty days after providing the budget. 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.

(b) If the proposed budget is rejected or the required notice is not given,
the periodic budget last ratified by the unit owners continues until the
unit owners ratify a subsequent budget proposed by the board.

(2) The budget must include:

(a) The projected income to the association by category;

(b) The projected common expenses and those specially allocated expenses
that are subject to being budgeted, both by category;

(c) The amount of the assessments per unit and the date the assessments are
due;

(d) The current amount of regular assessments budgeted for contribution to
the reserve account;

(e) A statement of whether the association has a reserve study that meets
the requirements of section 331 of this act and, if so, the extent to which
the budget meets or deviates from the recommendations of that reserve study;
and

(f) The current deficiency or surplus in reserve funding expressed on a per
unit basis.

(3) The board, at any time, may propose a special assessment. The assessment
is effective only if the board follows the procedures for ratification of a
budget described in subsection (1) of this section and the unit owners do
not reject the proposed assessment. The board may provide that the special
assessment may be due and payable in installments over any period it
determines and may provide a discount for early payment.

I cannot imagine any circumstances where a pre-existing CIC would want to
opt into a 134-page piece of legislation that is primarily notable for the
insane amount of gotcha provisions which would put all smaller associations
at risk on a daily basis, from the "disturbed" members who would hold the
association's feet to the fire on all sorts of minor technicalities. And
major ones that have zero application to small associations. The
administrative burden would be overwhelming. 

I think the powers that be are planning to offer some "technical
corrections" next year, don't know about any seminars. 

Rob

Robert D. Wilson-Hoss 
Hoss & Wilson-Hoss, LLP 
236 West Birch Street 
Shelton, WA 98584 
360 426-2999

www.hossandwilson-hoss.com
 <mailto:rob at hctc.com> rob at hctc.com

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From: wsbarp-bounces at lists.wsbarppt.com
[mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Paul Neumiller
Sent: Tuesday, July 24, 2018 2:24 PM
To: wsbarp at lists.wsbarppt.com
Subject: [WSBARP] WUCIOA

I am assessing the impact of WUCIOA on existing HOAs (under RCW 64.38).  RCW
64.90.095 allows a preexisting CIC to elect to be governed by the new
"Chapter."  Does this mean the whole chapter?  If the answer is yes, then
why would a preexisting HOA ever agree to provide reserve studies (other
than it’s a good idea) and resale certificates and not to mention all of the
changes that would need to be made to the governing documents to come into
compliance with the new Chapter REC 64.90?  Are the powers-that-be preparing
any seminars on this topic?  -Paul Neumiller

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