[WSBARP] WUCIOA

Thu Jul 26 09:53:11 PDT 2018

For what it's worth, the Final Bill Report on SSB 6175 states the following: "Sections regarding adoption of budgets and the process for an existing CIC to come under the WUCIOA apply prospectively to all CICs."

However, Section 117(2) of the bill (codified under RCW 64.90.080(2)) also states that WUCIOA's budget ratification process does not invalidate existing provisions of the governing documents of condominium associations while it does supersede the governing documents of plat communities. At least, that's my interpretation.

Patrick McDonald
_______________________
Pody & McDonald, PLLC
1200 Fifth Avenue, Suite 1410
Seattle, WA 98101-3106
T: 206-467-1559
F: 206-467-4489

From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Rob Wilson-Hoss
Sent: July 26, 2018 9:21 AM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] WUCIOA

Mary, I think that the new provision around budgets applies to all. I think that includes the one that the judge created. There are several parts of the Act that speak to what it applies to, and there is no exception for associations that were subject to a previous order based on previous law.

But if you read the various pre-passage versions of the Act, about application to pre-existing CICs, you will see how truly disjointed all of this was. An original version just said, it does not apply except for 117 and 120. Then that went away. At one point near the end of the Act there was an extra statute that said that a pre-existing CIC could opt out by using the opt out provisions in 117, but there have never been any opt out provisions, that I can find. There is the opt-in provision of 120, of course.

What convinced me that even a court of appeals or the Supreme Court would see that the intent was still to not apply it to pre-existings, even though more direct language to that effect was taken out, is 116, which continues to specify that the Act applies to all CICs created after the effective date. By the Rule of Quite the Opposite (Go ask Alice, I think she'll know) this means that it does not apply to CICs created before the effective date.

Rob

Robert D. Wilson-Hoss
Hoss & Wilson-Hoss, LLP
236 West Birch Street
Shelton, WA 98584
360 426-2999
www.hossandwilson-hoss.com<www.hossandwilsonhoss.com>
rob at hctc.com<mailto:rob at hctc.com>

This message is intended solely for the use of the addressee and may contain information that is privileged, confidential, and exempt from disclosure under applicable law.  If you are not the addressee, you are hereby notified that any use, distribution, or copying of this message is strictly prohibited.  If you received this message in error, please notify us by reply e-mail or by telephone (call us collect at the number listed above) and immediately delete this message and any and all of its attachments.  Thank you.

This office does debt collection and this e-mail may be an attempt to collect a debt, Any information obtained will be used for that purpose.  To the extent the Federal Fair Debt Collection Practices Act (15 U.S.C. § 1692) applies this firm is acting as a debt collector for the condominium/homeowners' association named above to collect a debt owed to it. Any information obtained will be used for collection purposes. You have the right to seek advice of legal counsel.

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Mary Stone
Sent: Wednesday, July 25, 2018 5:09 PM
To: 'WSBA Real Property Listserv'
Subject: Re: [WSBARP] WUCIOA

Subsection (2) of this section (akaRCW 64.90.080(2)) is what is driving me crazy.  It says, essentially, that .095 and .525, which, according to subsection (1), apply to all CICs created before July 1, 2018, only apply to events occurring after July 1, 2018, except to the extent provided in this subsection.  Then the next sentence says To protect the public interest, 095 and 525 supersede existing provisions of the governing documents of all plat communities and miscellaneous communities previously subject to 64.38.  I read this all together to say, I think, that the method for voting on budgets set forth in .525 applies to all HOAs, regardless of what your governing documents say, right?  If so, then what about if your governing documents contain a method for voting on budgets that was written by a Superior Court judge?  I had a trial a few months ago where one of the disputes was the method for voting on budgets and the court ruled that a majority of the 80 owners had to vote in favor of the budget in order for it to pass.  Often a majority doesn't even vote in this community, so I'd love another bite at that apple.

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Rob Wilson-Hoss
Sent: Wednesday, July 25, 2018 8:32 AM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] WUCIOA

NEW SECTION. Sec. 117. APPLICABILITY TO PREEXISTING COMMON INTEREST COMMUNITIES. (1) Except for a nonresidential common interest community described in section 121 of this act, sections 120 and 326 of this act apply, and any inconsistent provisions of chapter 59.18, 64.32, 64.34, or 64.38 RCW do not apply, to a common interest community created in this state before the effective date of this section.

(2) Except to the extent provided in this subsection, the sections listed in subsection (1) of this section apply only to events and circumstances occurring after the effective date of this section and do not invalidate existing provisions of the governing documents of those common interest communities. To protect the public interest, sections 120 and 326 of this act supersede existing provisions of the governing documents of all plat communities and miscellaneous communities previously subject to chapter 64.38 RCW.

120 is the amendment provision that allows amendment to covenants to buy into the new Act. 326 is the budget/assessment provision.

Rob

Robert D. Wilson-Hoss
Hoss & Wilson-Hoss, LLP
236 West Birch Street
Shelton, WA 98584
360 426-2999
www.hossandwilson-hoss.com<www.hossandwilsonhoss.com>
rob at hctc.com<mailto:rob at hctc.com>

This message is intended solely for the use of the addressee and may contain information that is privileged, confidential, and exempt from disclosure under applicable law.  If you are not the addressee, you are hereby notified that any use, distribution, or copying of this message is strictly prohibited.  If you received this message in error, please notify us by reply e-mail or by telephone (call us collect at the number listed above) and immediately delete this message and any and all of its attachments.  Thank you.

This office does debt collection and this e-mail may be an attempt to collect a debt, Any information obtained will be used for that purpose.  To the extent the Federal Fair Debt Collection Practices Act (15 U.S.C. § 1692) applies this firm is acting as a debt collector for the condominium/homeowners' association named above to collect a debt owed to it. Any information obtained will be used for collection purposes. You have the right to seek advice of legal counsel.

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Paul Neumiller
Sent: Tuesday, July 24, 2018 4:19 PM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] WUCIOA

Rob, thank you for confirming my suspicions.  I found and read RCW 64.90.525 and 2018 c 277 Sec. 326 regarding the adoption of budgets but I just can't find where the legislature made this section applicable to preexisting CICs.  I can see where this section fixes the Casey v. Sudden Valley issue for new CICs but I don't see where this new section applies to preexisting CICs under RCW 64.38.  What am I missing?

[Paul A  Neumiller]

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Rob Wilson-Hoss
Sent: Tuesday, July 24, 2018 3:04 PM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] WUCIOA

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<https://nam01.safelinks.protection.outlook.com/?url=www.hossandwilsonhoss.com&data=02%7C01%7C%7C4d4a277e80a840c5453e08d5f1b1fff0%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636680669202800868&sdata=MhmE%2Fr3ROWKItIQGdCMgyQOLoTWPX1AmNc3%2BTHK0Clg%3D&reserved=0>
rob at hctc.com<mailto:rob at hctc.com>

This message is intended solely for the use of the addressee and may contain information that is privileged, confidential, and exempt from disclosure under applicable law.  If you are not the addressee, you are hereby notified that any use, distribution, or copying of this message is strictly prohibited.  If you received this message in error, please notify us by reply e-mail or by telephone (call us collect at the number listed above) and immediately delete this message and any and all of its attachments.  Thank you.

This office does debt collection and this e-mail may be an attempt to collect a debt, Any information obtained will be used for that purpose.  To the extent the Federal Fair Debt Collection Practices Act (15 U.S.C. § 1692) applies this firm is acting as a debt collector for the condominium/homeowners' association named above to collect a debt owed to it. Any information obtained will be used for collection purposes. You have the right to seek advice of legal counsel.

From: wsbarp-bounces at lists.wsbarppt.com<mailto: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<mailto: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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