[WSBARP] House Bill 5129

[Terrance Wilson]

Colleagues-

House Bill 5129 becomes effective in 3 days on July 27.  For the past 7 years, we have been able to argue that most smaller infill municipal subdivisions were only subject to the limited provisions of 64.90 when they were 12 units or less and not more than $300/year per unit for assessments.  Under this new Bill, the threshold for "limited" applicability under 64.90 has been raised to 50 or fewer units and $1,000 or less in assessments; however, the new "limited" sections of 64.90 that will apply to all common interest communities has been dramatically increased, and now include the sections that require the formation of an HOA (i.e. 64.90.400).

I don't wish to be the canary in the coal mine on this matter, as I floated concerns about this several weeks ago, but I have not received any feedback from other practitioners about the impacts of this reality, and if others agree.  Most municipalities require shared elements in their subdivision process such as easements for roads, utilities, drainage, etc., so I believe most (if not all) municipal subdivisions (including the new wave we expect to see from the new Unit Lot Subdivisions for the middle housing products under House Bill 1110 such as detached cottage housing, duplex-triplex-quadplex etc.) are by definition common interest communities under 64.90. Accordingly, it appears that they will all be subject to the new minimum/limited sections that have been added to all common interest communities.

The prospect of every two and three lot short plat and unit subdivision in every county and city in the state having to be subjected to the creation of an HOA seems like an administrative avalanche, with HOA Transition Meetings and all of the HOA bureaucracy for even the smallest projects. We also are not clear how this will be regulated to comply with 64.90.  I don't believe jurisdictions are aware of these nuances and formalities in the House Bill, and it seems the legal community will be the most essential stop gap to analyze what these communities will be required to do in order to comply with the House Bill.

While I have seen some commentary regarding pre-2018 communities needing to be brought into compliance as required by the House Bill, I have not seen any commentary about new development- particularly the large volume of small infill communities under the new middle housing codes.  Frankly, if HOA's are always going to be required under the new code, many owners/developers may wish to utilize the condo method of ownership over the municipal subdivision form of ownership if an HOA is going to be required either way.

I would greatly appreciate any analysis any other practitioners have on this matter.

Best regards,

Terrance Randall Wilson, Managing Partner
Attorney at Law

Wilson Law Group of WA
(206) 550-3189 - Cell
(206) 805-6238 - Office
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