[WSBARP] Condo Borrowings Under RCW 64.32

[Paul Neumiller]

Thanks to Bryce and Patrick.  Patrick found the provision I couldn't find yesterday where certain provisions of the WCA are applied retroactively to Chapter 64.32 entities.  My Asso. has the right to borrow but doesn't specifically give the Asso. the right to assign future income (ie.  dues and special assessments.)


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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Patrick McDonald
Sent: Tuesday, September 1, 2020 5:12 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Condo Borrowings Under RCW 64.32

RCW 64.34.304(1)(n) provides that a condominium association can assign its right to future income "only to the extent the declaration provides." This provision also applies to associations governed by the older Horizontal Property Regimes Act under RCW 64.34.010.

So, yes, for an association governed by the Horizontal Property Regimes Act or the Washington Condominium Act, the declaration must expressly provide for the authority to assign future assessment income. Many associations, especially the older ones, have to amend their declarations as a starting point before obtaining a loan and securitizing it with future assessment income.

The provision in WUCIOA addressing this issue wouldn't apply to your association client unless it opted in to be governed by that statute.

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<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Paul Neumiller
Sent: September 1, 2020 4:33 PM
To: wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] Condo Borrowings Under RCW 64.32


Listmates, I have a Condo Asso. client which is formed under the Horizontal Property Regimes Act.  It needs to borrow money to replace siding on buildings.  I anticipate that the bank will want the Asso. to assign its future right to income as security which is permitted under the WCA and the new WUCIOA.  But Chapter 64.32 seems silent on the question on this ability.  So, does a Chapter 64.32 Condo Asso. have the right to assign its right to future income to secure a loan because Chapter 64.32 does not prohibit it OR does a Chapter 64.32 Condo Asso. not have the right to assign its right to a future income because Chapter 64.32 does not permit it?  Not sure, but I would anticipate that I will need to provide a formal opinion letter for the loan.









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