Chapter 64.38
RCW: Homeowners' associations
RCW Sections
64.38.005 Intent.
64.38.010 Definitions.
64.38.015 Association
membership.
64.38.020 Association
powers.
64.38.025 Board
of directors --Standard of care --Restrictions --Budget --Removal from board.
64.38.028 Removal
of discriminatory provisions in governing documents --Procedure.
64.38.030 Association
bylaws.
64.38.033 Flag of
the United States --Outdoor display --Governing documents.
64.38.034 Political
yard signs--Governing documents.
64.38.035 Association
meetings --Notice --Board of directors.
64.38.040 Quorum
for meeting.
64.38.045 Financial
and other records --Property of association --Copies --Examination --Annual
financial statement --Accounts.
64.38.050 Violation
--Remedy --Attorneys' fees.
64.38.055 Governing
documents --Solar panels.
64.38.060 Adult
family homes.
64.38.065 Reserve
account and study.
64.38.070 Reserve
study --Requirements.
64.38.075 Reserve
account --Withdrawals.
64.38.080 Reserve
study --Demand for preparation and inclusion in budget.
64.38.085 Reserve
account and study --Liability.
64.38.090 Reserve
study --Exemptions.
Notes:
Speed
enforcement: RCW 46.61.419.
64.38.005 Intent.
The intent of
this chapter is to provide consistent laws regarding the formation and legal
administration of homeowners'
associations. [1995
c 283 § 1.]
64.38.010 Definitions.
(Effective until January 1, 2012.)
For purposes of
this chapter:
(1)
"Homeowners' association" or "association" means a
corporation, unincorporated association, or other legal entity, each member of
which is an owner of residential real property located within the association's
jurisdiction, as described in the governing documents, and by virtue of
membership or ownership of property is obligated to pay real property taxes,
insurance premiums, maintenance costs, or for improvement of real property
other than that which is owned by the member. "Homeowners'
association" does not mean an association created under chapter 64.32 or
64.34 RCW.
(2)
"Governing documents" means the articles of incorporation, bylaws,
plat, declaration of covenants, conditions, and restrictions, rules and
regulations of the association, or other written instrument by which the
association has the authority to exercise any of the powers provided for in
this chapter or to manage, maintain, or otherwise affect the property under its
jurisdiction.
(3) "Board
of directors" or "board" means the body, regardless of name,
with primary authority to manage the affairs of the association.
(4) "Common
areas" means property owned, or otherwise maintained, repaired or
administered by the association.
(5) "Common
expense" means the costs incurred by the association to exercise any of
the powers provided for in this chapter.
(6)
"Residential real property" means any real property, the use of which
is limited by law, covenant or otherwise to primarily residential or
recreational purposes. [1995 c 283 § 2.]
64.38.010 Definitions.
(Effective January 1, 2012.)
For purposes of
this chapter:
(1)
"Assessment" means all sums chargeable to an owner by an association
in accordance with RCW 64.38.020.
(2)
"Baseline funding plan" means establishing a reserve funding goal of
maintaining a reserve account balance above zero dollars throughout the
thirty-year study period described under RCW 64.38.065.
(3) "Board
of directors" or "board" means the body, regardless of name,
with primary authority to manage the affairs of the association.
(4) "Common
areas" means property owned, or otherwise maintained, repaired or
administered by the association.
(5) "Common
expense" means the costs incurred by the association to exercise any of
the powers provided for in this chapter.
(6)
"Contribution rate" means, in a reserve study as described in RCW
64.34.380, the amount contributed to the reserve account so that the
association will have cash reserves to pay major maintenance, repair, or
replacement costs without the need of a special assessment.
(7)
"Effective age" means the difference between the estimated useful
life and remaining useful life.
(8) "Full
funding plan" means setting a reserve funding goal of achieving one
hundred percent fully funded reserves by the end of the thirty-year study
period described under RCW 64.38.065, in which the reserve account balance
equals the sum of the deteriorated portion of all reserve components.
(9) "Fully
funded balance" means the current value of the deteriorated portion, not
the total replacement value, of all the reserve components. The fully funded
balance for each reserve component is calculated by multiplying the current replacement
cost of the reserve component by its effective age, then dividing the result by
the reserve component's useful life. The sum total of all reserve components'
fully funded balances is the association's fully funded balance.
(10)
"Governing documents" means the articles of incorporation, bylaws,
plat, declaration of covenants, conditions, and restrictions, rules and
regulations of the association, or other written instrument by which the
association has the authority to exercise any of the powers provided for in
this chapter or to manage, maintain, or otherwise affect the property under its
jurisdiction.
(11)
"Homeowners' association" or "association" means a
corporation, unincorporated association, or other legal entity, each member of
which is an owner of residential real property located within the association's
jurisdiction, as described in the governing documents, and by virtue of
membership or ownership of property is obligated to pay real property taxes,
insurance premiums, maintenance costs, or for improvement of real property
other than that which is owned by the member. "Homeowners'
association" does not mean an association created under chapter 64.32 or
64.34 RCW.
(12)
"Lot" means a physical portion of the real property located within an
association's jurisdiction designated for separate ownership.
(13)
"Owner" means the owner of a lot, but does not include a person who
has an interest in a lot solely as security for an obligation.
"Owner" also means the vendee, not the vendor, of a lot under a real
estate contract.
(14)
"Remaining useful life" means the estimated time, in years, before a
reserve component will require major maintenance, repair, or replacement to
perform its intended function.
(15)
"Replacement cost" means the current cost of replacing, repairing, or
restoring a reserve component to its original functional condition.
(16)
"Reserve component" means a common element whose cost of maintenance,
repair, or replacement is infrequent, significant, and impractical to include
in an annual budget.
(17)
"Reserve study professional" means an independent person who is
suitably qualified by knowledge, skill, experience, training, or education to
prepare a reserve study in accordance with RCW 64.34.380 and 64.34.382.
(18)
"Residential real property" means any real property, the use of which
is limited by law, covenant or otherwise to primarily residential or recreational
purposes.
(19)
"Significant assets" means that the current replacement value of the
major reserve components is seventy-five percent or more of the gross budget of
the association, excluding the association's reserve account funds.
(20) "Useful
life" means the estimated time, between years, that major maintenance,
repair, or replacement is estimated to occur. [2011 c 189 § 7; 1995 c 283 § 2.]
Notes:
Reviser's note:
The definitions in this section have been alphabetized pursuant to RCW 1.08.015(2)(k).
Effective date
--2011 c 189: See note following RCW 64.38.065.
64.38.015 Association
membership.
The membership of
an association at all times shall consist exclusively of the owners of all real
property over which the association has jurisdiction, both developed and
undeveloped. [1995 c 283 § 3.]
64.38.020 Association
powers.
Unless otherwise
provided in the governing documents, an association may:
(1) Adopt and
amend bylaws, rules, and regulations;
(2) Adopt and
amend budgets for revenues, expenditures, and reserves, and impose and collect
assessments for common expenses from owners;
(3) Hire and
discharge or contract with managing agents and other employees, agents, and
independent contractors;
(4) Institute,
defend, or intervene in litigation or administrative proceedings in its own
name on behalf of itself or two or more owners on matters affecting the
homeowners' association, but not on behalf of owners involved in disputes that
are not the responsibility of the association;
(5) Make
contracts and incur liabilities;
(6) Regulate the
use, maintenance, repair, replacement, and modification of common areas;
(7) Cause
additional improvements to be made as a part of the common areas;
(8) Acquire,
hold, encumber, and convey in its own name any right, title, or interest to
real or personal property;
(9) Grant
easements, leases, licenses, and concessions through or over the common areas
and petition for or consent to the vacation of streets and alleys;
(10) Impose and
collect any payments, fees, or charges for the use, rental, or operation of the
common areas;
(11) Impose and
collect charges for late payments of assessments and, after notice and an
opportunity to be heard by the board of directors or by the representative
designated by the board of directors and in accordance with the procedures as provided
in the bylaws or rules and regulations adopted by the board of directors, levy
reasonable fines in accordance with a previously established schedule adopted
by the board of directors and furnished to the owners for violation of the bylaws,
rules, and regulations of the association;
(12) Exercise any
other powers conferred by the bylaws;
(13) Exercise all
other powers that may be exercised in this state by the same type of
corporation as the association; and
(14) Exercise any
other powers necessary and proper for the governance and operation of the
association. [1995 c 283 § 4.]
Notes:
Speed
enforcement: RCW 46.61.419.
64.38.025 Board
of directors — Standard of care — Restrictions — Budget — Removal from board.
(Effective until January 1, 2012.)
(1) Except as
provided in the association's governing documents or this chapter, the board of
directors shall act in all instances on behalf of the association. In the
performance of their duties, the officers and members of the board of directors
shall exercise the degree of care and loyalty required of an officer or
director of a corporation organized under chapter 24.03 RCW.
(2) The board of
directors shall not act on behalf of the association to amend the articles of
incorporation, to take any action that requires the vote or approval of the
owners, to terminate the association, to elect members of the board of
directors, or to determine the qualifications, powers, and duties, or terms of
office of members of the board of directors; but the board of directors may
fill vacancies in its membership of the unexpired portion of any term.
(3) Within thirty
days after adoption by the board of directors of any proposed regular or
special budget of the association, the board shall set a date for a meeting of
the owners to consider ratification of the budget not less than fourteen nor
more than sixty days after mailing of the summary. Unless at that meeting the
owners of a majority of the votes in the association are allocated or any
larger percentage specified in the governing documents reject the budget, in
person or by proxy, the
budget is
ratified, whether or not a quorum is present. In the event the proposed budget
is rejected or the required notice is not given, the periodic budget last
ratified by the owners shall be continued until such time as the owners ratify
a subsequent budget proposed by the board of directors.
(4) The owners by
a majority vote of the voting power in the association present, in person or by
proxy, and entitled to vote at any meeting of the owners at which a quorum is
present, may remove any member of the board of directors with or without cause.
[1995 c 283 § 5.]
64.38.025 Board
of directors — Standard of care — Restrictions — Budget — Removal from board.
(Effective January 1, 2012.)
(1) Except as
provided in the association's governing documents or this chapter, the board of
directors shall act in all instances on behalf of the association. In the
performance of their duties, the officers and members of the board of directors
shall exercise the degree of care and loyalty required of an officer or
director of a corporation organized under chapter 24.03 RCW.
(2) The board of
directors shall not act on behalf of the association to amend the articles of
incorporation, to take any action that requires the vote or approval of the
owners, to terminate the association, to elect members of the board of
directors, or to determine the qualifications, powers, and duties, or terms of
office of members of the board of directors; but the board of directors may fill
vacancies in its membership of the unexpired portion of any term.
(3) Within thirty
days after adoption by the board of directors of any proposed regular or
special budget of the association, the board shall set a date for a meeting of
the owners to consider ratification of the budget not less than fourteen nor
more than sixty days after mailing of the summary. Unless at that meeting the
owners of a majority of the votes in the association are allocated or any
larger percentage specified in the governing documents reject the budget, in
person or by proxy, the
budget is
ratified, whether or not a quorum is present. In the event the proposed budget
is rejected or the required notice is not given, the periodic budget last
ratified by the owners shall be continued until such time as the owners ratify
a subsequent budget proposed by the board of directors.
(4) As part of
the summary of the budget provided to all owners, the board of directors shall
disclose to the owners:
(a) The current
amount of regular assessments budgeted for contribution to the reserve account,
the recommended contribution rate from the reserve study, and the funding plan
upon which the recommended contribution rate is based;
(b) If additional
regular or special assessments are scheduled to be imposed, the date the
assessments are due, the amount of the assessments per each owner per month or
year, and the purpose of the assessments;
(c) Based upon
the most recent reserve study and other information, whether currently
projected reserve account balances will be sufficient at the end of each year
to meet the association's obligation for major maintenance, repair, or
replacement of reserve components during the next thirty years;
(d) If reserve
account balances are not projected to be sufficient, what additional
assessments may be necessary to ensure that sufficient reserve account funds
will be available each year during the next thirty years, the approximate dates
assessments may be due, and the amount of the assessments per owner per month
or year;
(e) The estimated
amount recommended in the reserve account at the end of the current fiscal year
based on the most recent reserve study, the projected reserve account cash
balance at the end of the current fiscal year, and the percent funded at the
date of the latest reserve study;
(f) The estimated
amount recommended in the reserve account based upon the most recent reserve
study at the end of each of the next five budget years, the projected reserve account
cash balance in each of those years, and the projected percent funded for each
of those years; and
(g) If the
funding plan approved by the association is implemented, the projected reserve
account cash balance in each of the next five budget years and the percent
funded for each of those years.
(5) The owners by
a majority vote of the voting power in the association present, in person or by
proxy, and entitled to vote at any meeting of the owners at which a quorum is
present, may remove any member of the board of directors with or without cause.
[2011 c 189 § 8; 1995 c 283 § 5.]
Notes:
Effective date
--2011 c 189: See note following RCW 64.38.065.
64.38.028 Removal
of discriminatory provisions in governing documents — Procedure.
(1) The
association, acting through a simple majority vote of its board, may amend the
association's governing documents for the purpose of removing:
(a) Every
covenant, condition, or restriction that purports to forbid or restrict the
conveyance, encumbrance, occupancy, or lease thereof to individuals of a
specified race, creed, color, sex, or national origin; families with children
status; individuals with any sensory, mental, or physical disability; or
individuals who use a trained dog guide or service animal because they are blind
or deaf or have a physical disability; and (b) Every covenant, condition,
restriction, or prohibition, including a right of entry or possibility of
reverter, that directly or indirectly limits the use or occupancy of real
property on the basis of race, creed, color, sex, national origin; families
with children status; the presence of any sensory, mental, or physical
disability; or the use of a trained dog guide or service animal by a person
with a physical disability or who is blind or deaf.
(2) Upon the
board's receipt of a written request by a member of the association that the
board exercise its amending authority granted under subsection (1) of this
section, the board must, within a reasonable time, amend the governing documents,
as provided under this section.
(3) Amendments
under subsection (1) of this section may be executed by any board officer.
(4) Amendments
made under subsection (1) of this section must be recorded in the public
records and state the following:
"This
amendment strikes from these covenants, conditions, and restrictions those
provisions that are void under RCW 49.60.224. Specifically, this amendment
strikes:
(a) Those
provisions that forbid or restrict use, occupancy, conveyance, encumbrance, or
lease of real property to individuals of a specified race, creed, color, sex,
or national origin; families with children status; individuals with any sensory,
mental, or physical disability; or individuals who use a trained dog guide or
service animal because they are blind
or deaf or have a
physical disability; and
(b) Every
covenant, condition, restriction, or prohibition, including a right of entry or
possibility of reverter, that directly or indirectly limits the use or
occupancy of real property on the basis of race, creed, color, sex, national
origin; families with children status; the presence of any sensory, mental, or
physical disability; or the use of a trained dog guide or service animal by a
person with a physical disability or who is blind or deaf."
(5) Board action
under this section does not require the vote or approval of the owners.
(6) As provided
in RCW 49.60.227, any owner, occupant, or tenant in the association or board
may bring an action in superior court to have any provision of a written
instrument that is void pursuant to RCW 49.60.224 stricken from the public records.
(7) Nothing in
this section prohibiting discrimination based on families with children status
applies to housing for older persons as defined by the federal fair housing
amendments act of 1988, 42 U.S.C. Sec. 3607(b)(1) through (3), as amended by
the housing for older persons act of 1995, P.L. 104-76, as enacted on December
28, 1995. Nothing in this section authorizes requirements for housing for older
persons different than the requirements in the federal fair housing amendments act
of 1988, 42 U.S.C. Sec. 3607(b)(1) through (3), as amended by the housing for
older persons act of 1995, P.L. 104-76, as enacted on December 28, 1995.
(8) Except as
otherwise provided in subsection (2) of this section, (a) nothing in this
section creates a duty on the part of owners, occupants, tenants, associations,
or boards to amend the governing documents as provided in this section, or to
bring an action as authorized under this section and RCW 49.60.227; and (b) an
owner, occupant, tenant, association, or board is not liable for failing to
amend the governing documents or to pursue an action in court as authorized
under this section and RCW 49.60.227. [2006 c 58 § 2.]
Notes:
Finding --Intent
--2006 c 58: "The legislature finds that some homeowners' associations
have governing documents that contain discriminatory covenants, conditions, or
restrictions that are void and unenforceable under both the federal fair
housing amendments act of 1988 and RCW 49.60.224. The continued existence of these
discriminatory covenants, conditions, or restrictions is contrary to public
policy and repugnant to many property owners. It is the intent of chapter 58,
Laws of 2006 to allow homeowners' associations to remove all remnants of
discrimination from their governing documents." [2006 c 58 § 1.]
64.38.030 Association
bylaws.
Unless provided
for in the governing documents, the bylaws of the association shall provide
for:
(1) The number,
qualifications, powers and duties, terms of office, and manner of electing and
removing the board of directors and officers and filling vacancies;
(2) Election by
the board of directors of the officers of the association as the bylaws
specify;
(3) Which, if
any, of its powers the board of directors or officers may delegate to other
persons or to a managing agent;
(4) Which of its
officers may prepare, execute, certify, and record amendments to the governing
documents on behalf of the association;
(5) The method of
amending the bylaws; and
(6) Subject to
the provisions of the governing documents, any other matters the association
deems necessary and appropriate. [1995 c 283 § 6.]
64.38.033 Flag of
the United States — Outdoor display — Governing documents.
(1) The governing
documents may not prohibit the outdoor display of the flag of the United States
by an owner or resident on the owner's or resident's property if the flag is
displayed in a manner consistent with federal flag display law, 4 U.S.C. Sec. 1
et seq. The governing documents may include reasonable rules and regulations,
consistent with 4 U.S.C. Sec. 1 et seq., regarding the placement and manner of
display of the flag of the United States.
(2) The governing
documents may not prohibit the installation of a flagpole for the display of
the flag of the United States. The governing documents may include reasonable
rules and regulations regarding the location and the size of the flagpole.
(3) For purposes
of this section, "flag of the United States" means the flag of the
United States as defined in federal flag display law, 4 U.S.C. Sec. 1 et seq.,
that is made of fabric, cloth, or paper and that is displayed from a staff or
flagpole or in a window. For purposes of this section, "flag of the United
States" does not mean a flag depiction or emblem made of lights, paint, roofing,
siding, paving materials, flora, or balloons, or of any similar building,
landscaping, or decorative component.
(4) The
provisions of this section shall be construed to apply retroactively to any
governing documents in effect on June 10, 2004. Any provision in a governing
document in effect on June 10, 2004, that is inconsistent with this section
shall be void and unenforceable. [2004 c 169 § 1.]
64.38.034 Political
yard signs — Governing documents.
(1) The governing
documents may not prohibit the outdoor display of political yard signs by an
owner or resident on the owner's or resident's property before any primary or
general election. The governing documents may include reasonable rules and
regulations regarding the placement and manner of display of political yard
signs.
(2) This section
applies retroactively to any governing documents in effect on July 24, 2005.
Any provision in a governing document in effect on July 24, 2005, that is
inconsistent with this section is void and unenforceable. [2005 c 179 § 1.]
64.38.035 Association
meetings — Notice — Board of directors.
(1) A meeting of
the association must be held at least once each year. Special meetings of the
association may be called by the president, a majority of the board of
directors, or by owners having ten percent of the votes in the association. Not
less than fourteen nor more than sixty days in advance of any meeting, the
secretary or other officers specified in the bylaws shall cause notice to be
hand-delivered or sent prepaid by first-class United States mail to the mailing
address of each owner or to
any other mailing
address designated in writing by the owner. 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.
(2) Except as
provided in this subsection, all meetings of the board of directors shall be
open for observation by all owners of record and their authorized agents. The
board of directors shall keep minutes of all actions taken by the board, which
shall be available to all owners. Upon the affirmative vote in open meeting to
assemble in closed session, the board of directors may convene in closed
executive session to consider personnel matters; consult with legal counsel or
consider communications with legal counsel; and discuss likely or pending
litigation, matters involving possible violations of the governing documents of
the association, and matters involving the possible liability of an owner to
the association. The motion shall state specifically the purpose for the closed
session. Reference to the motion and the stated purpose for the closed session
shall be included in the minutes. The board of directors shall restrict the
consideration of matters during the closed portions of meetings only to those
purposes specifically exempted and stated in the motion. No motion, or other
action adopted, passed, or agreed to in closed session may become effective
unless the board of directors, following the closed session, reconvenes in open
meeting and votes in the open meeting on such motion, or other action which is
reasonably
identified. The
requirements of this subsection shall not require the disclosure of information
in violation of law or which is otherwise exempt from disclosure. [1995 c 283 §
7.]
64.38.040 Quorum
for meeting.
Unless the
governing documents specify a different percentage, a quorum is present
throughout any meeting of the association if the owners to which thirty-four
percent of the votes of the association are allocated are present in person or
by proxy at the beginning of the meeting. [1995 c 283 § 8.]
64.38.045 Financial
and other records — Property of association — Copies — Examination — Annual
financial statement — Accounts.
(1) The
association or its managing agent shall keep financial and other records
sufficiently detailed to enable the association to fully declare to each owner
the true statement of its financial status. All financial and other records of
the association, including but not limited to checks, bank records, and
invoices, in whatever form they are kept, are the property of the association.
Each association managing agent shall turn over all original books and records
to the association immediately
upon termination
of the management relationship with the association, or upon such other demand
as is made by the board of directors. An association managing agent is entitled
to keep copies of association records. All records which the managing agent has
turned over to the association shall be made reasonably available for the
examination and copying by the managing agent.
(2) All records
of the association, including the names and addresses of owners and other
occupants of the lots, shall be available for examination by all owners, holders
of mortgages on the lots, and their respective authorized agents on reasonable
advance notice during normal working hours at the offices of the association or
its managing agent. The association shall not release the unlisted telephone
number of any owner. The association may impose and collect a reasonable charge
for copies and any reasonable costs incurred by the association in providing
access to records.
(3) At least
annually, the association shall prepare, or cause to be prepared, a financial
statement of the association. The financial statements of associations with
annual assessments of fifty thousand dollars or more shall be audited at least annually
by an independent certified public accountant, but the audit may be waived if
sixty-seven percent of the votes cast by owners, in person or by proxy, at a
meeting of the association at which a quorum is present, vote each year to
waive the audit.
(4) The funds of
the association shall be kept in accounts in the name of the association and
shall not be commingled with the funds of any other association, nor with the
funds of any manager of the association or any other person responsible for the
custody of such funds. [1995 c 283 § 9.]
64.38.050 Violation
— Remedy — Attorneys' fees.
Any violation of
the provisions of this chapter entitles an aggrieved party to any remedy
provided by law or in equity. The court, in an appropriate case, may award
reasonable attorneys' fees to the prevailing party. [1995 c 283 § 10.]
64.38.055 Governing
documents — Solar panels.
(1) The governing
documents may not prohibit the installation of a solar energy panel by an owner
or resident on the owner's or resident's property as long as the solar energy
panel:
(a) Meets
applicable health and safety standards and requirements imposed by state and
local permitting authorities;
(b) If used to
heat water, is certified by the solar rating certification corporation or
another nationally recognized certification agency. Certification must be for
the solar energy panel and for installation; and
(c) If used to
produce electricity, meets all applicable safety and performance standards
established by the national electric code, the institute of electrical and
electronics engineers, accredited testing laboratories, such as underwriters
laboratories, and, where applicable, rules of the utilities and transportation
commission regarding safety and reliability.
(2) The governing
documents may:
(a) Prohibit the
visibility of any part of a roof-mounted solar energy panel above the roof
line;
(b) Permit the
attachment of a solar energy panel to the slope of a roof facing a street only
if:
(i) The solar
energy panel conforms to the slope of the roof; and
(ii) The top edge
of the solar energy panel is parallel to the roof ridge; or
(c) Require:
(i) A solar
energy panel frame, a support bracket, or any visible piping or wiring to be
painted to coordinate with the roofing material;
(ii) An owner or
resident to shield a ground-mounted solar energy panel if shielding the panel
does not prohibit economic installation of the solar energy panel or degrade
the operational performance quality of the solar energy panel by more than ten
percent; or
(iii) Owners or
residents who install solar energy panels to indemnify or reimburse the
association or its members for loss or damage caused by the installation,
maintenance, or use of a solar energy panel.
(3) The governing
documents may include other reasonable rules regarding the placement and manner
of a solar energy panel.
(4) For purposes
of this section, "solar energy panel" means a panel device or system
or combination of panel devices or systems that relies on direct sunlight as an
energy source, including a panel device or system or combination of panel
devices or systems that collects sunlight for use in:
(a) The heating
or cooling of a structure or building;
(b) The heating
or pumping of water;
(c) Industrial,
commercial, or agricultural processes; or
(d) The
generation of electricity.
(5) This section
does not apply to common areas as defined in RCW
64.38.010.
(6) This section
applies retroactively to a governing document in effect on July 26, 2009. A
provision in a governing document in effect on July 26, 2009, that is
inconsistent with this section is void and unenforceable. [2009 c 51 § 1.]
64.38.060 Adult
family homes.
(1) To effectuate
the public policy of chapter 70.128 RCW, the governing documents may not limit,
directly or indirectly:
(a) Persons with
disabilities from living in an adult family home licensed under chapter 70.128
RCW; or
(b) Persons and
legal entities from operating adult family homes licensed under chapter 70.128
RCW, whether for-profit or nonprofit, to provide services covered under chapter
70.128 RCW. However, this subsection does not prohibit application of reasonable
nondiscriminatory regulation, including but not limited to landscaping
standards or regulation of sign location or size, that applies to all
residential property subject to the governing documents.
(2) This section
applies retroactively to any governing documents in effect on July 26, 2009.
Any provision in a governing document in effect on or after July 26, 2009, that
is inconsistent with subsection (1) of this section is unenforceable to the extent
of the conflict. [2009 c 530 § 4.]
64.38.065 Reserve
account and study. (Effective January 1, 2012.)
(1) An
association is encouraged to establish a reserve account with a financial
institution to fund major maintenance, repair, and replacement of common
elements, including limited common elements that will require major
maintenance, repair, or replacement within thirty years. If the association
establishes a reserve account, the account must be in the name of the association.
The board of directors is responsible for administering the reserve account.
(2) Unless doing
so would impose an unreasonable hardship, an association with significant
assets shall prepare and update a reserve study, in accordance with the
association's governing documents and this chapter. The initial reserve study must
be based upon a visual site inspection conducted by a reserve study professional.
(3) Unless doing
so would impose an unreasonable hardship, the association shall update the
reserve study annually. At least every three years, an updated reserve study
must be prepared and based upon a visual site inspection conducted by a reserve
study professional.
(4) The decisions
relating to the preparation and updating of a reserve study must be made by the
board of directors in the exercise of the reasonable discretion of the board.
The decisions must include whether a reserve study will be prepared or updated,
and whether the assistance of a reserve study professional will be utilized. [2011
c 189 § 9.]
Notes:
Effective date
--2011 c 189: "This act takes effect January 1, 2012." [2011 c 189 §
15.]
64.38.070 Reserve
study — Requirements. (Effective January 1, 2012.)
(1) A reserve
study as described in RCW 64.38.065 is supplemental to the association's
operating and maintenance budget. In preparing a reserve study, the association
shall estimate the anticipated major maintenance, repair, and replacement
costs, whose infrequent and significant nature make them impractical to be
included in an annual budget.
(2) A reserve
study must include:
(a) A reserve
component list, including any reserve component that would cost more than one
percent of the annual budget of the association, not including the reserve
account, for major maintenance, repair, or replacement. If one of these reserve
components is not included in the reserve study, the study should provide
commentary explaining the basis for its exclusion. The study must also include
quantities and estimates for the useful life of each reserve component,
remaining useful life of
each reserve
component, and current major maintenance, repair, or replacement cost for each
reserve component;
(b) The date of
the study, and a statement that the study meets the requirements of this
section;
(c) The following
level of reserve study performed:
(i) Level I: Full
reserve study funding analysis and plan;
(ii) Level II:
Update with visual site inspection; or
(iii) Level III:
Update with no visual site inspection;
(d) The
association's reserve account balance;
(e) The
percentage of the fully funded balance that the reserve account is funded;
(f) Special
assessments already implemented or planned;
(g) Interest and
inflation assumptions;
(h) Current
reserve account contribution rates for a full funding plan and baseline funding
plan;
(i) A recommended
reserve account contribution rate, a contribution rate for a full funding plan
to achieve one hundred percent fully funded reserves by the end of the
thirty-year study period, a baseline funding plan to maintain the reserve balance
above zero throughout the thirty-year study period without special assessments,
and a contribution rate
recommended by
the reserve study professional;
(j) A projected
reserve account balance for thirty years and a funding plan to pay for
projected costs from that reserve account balance without reliance on future
unplanned special assessments; and
(k) A statement
on whether the reserve study was prepared with the assistance of a reserve
study professional.
(3) A reserve
study must also include the following disclosure: "This reserve study
should be reviewed carefully. It may not include all common and limited common
element components that will require major maintenance, repair, or replacement
in future years, and may not include regular contributions to a reserve account
for the cost of such maintenance, repair, or replacement. The failure to
include a component in a reserve study, or to provide contributions to a
reserve account for a component, may, under some circumstances, require you to
pay on demand as a special assessment your share of common expenses for the
cost of major maintenance, repair, or replacement of a reserve component."
[2011 c 189 §
10.]
Notes:
Effective date
--2011 c 189: See note following RCW 64.38.065.
64.38.075 Reserve
account — Withdrawals. (Effective January 1, 2012.)
An association
may withdraw funds from its reserve account to pay for unforeseen or unbudgeted
costs that are unrelated to maintenance, repair, or replacement of the reserve
components. The board of directors shall record any such withdrawal in the minute
books of the association, cause notice of any such withdrawal to be hand
delivered or sent prepaid by first-class United States mail to the mailing
address of each owner or to any other mailing address designated in writing by
the owner, and adopt
a repayment
schedule not to exceed twenty-four months unless it determines that repayment
within twenty-four months would impose an unreasonable burden on the owners.
Payment for major maintenance, repair, or replacement of the reserve components
out of cycle with the reserve study projections or not included in the reserve
study may be made from the reserve account without meeting the notification or
repayment requirements under this section. [2011 c 189 § 11.]
Notes:
Effective date
--2011 c 189: See note following RCW 64.38.065.
64.38.080 Reserve
study — Demand for preparation and inclusion in budget. (Effective January 1,
2012.)
(1) When more
than three years have passed since the date of the last reserve study prepared
by a reserve study professional, the owners to which at least thirty-five
percent of the votes are allocated may demand, in writing, to the association
that the cost of a reserve study be included in the next budget and that the
study be prepared by the end of that budget year. The written demand must refer
to this section. The board of directors shall, upon receipt of the written
demand, provide the owners who make the demand reasonable assurance that the
board will include a reserve study in the next budget and, if the budget is not
rejected by a majority of the owners, will arrange for the completion of a
reserve study.
(2) If a written
demand under this section is made and a reserve study is not timely prepared, a
court may order specific performance and award reasonable attorneys' fees to
the prevailing party in any legal action brought to enforce this section. An
association may assert unreasonable hardship as an affirmative defense in any
action brought against it under this section. Without limiting this affirmative
defense, an unreasonable hardship exists where the cost of preparing a reserve
study would exceed five percent of the association's annual budget.
(3) An owner's
duty to pay for common expenses is not excused because of the association's
failure to comply with this section or this chapter. A budget ratified by the
owners is not invalidated because of the association's failure to comply with this
section or this chapter. [2011 c 189 § 12.]
Notes:
Effective date
--2011 c 189: See note following RCW 64.38.065.
64.38.085 Reserve
account and study — Liability. (Effective January 1, 2012.)
Monetary damages
or any other liability may not be awarded against or imposed upon the
association, the officers or board of directors of the association, or those
persons who may have provided advice or assistance to the association or its
officers or directors, for failure to: Establish a reserve account; have a
current reserve study prepared or updated in accordance with the requirements
of this chapter; or make the reserve disclosures in accordance with this
chapter. [2011 c 189 § 13.]
Notes:
Effective date
--2011 c 189: See note following RCW 64.38.065.
64.38.090 Reserve
study — Exemptions. (Effective January 1, 2012.)
An association is
not required to follow the reserve study requirements under RCW 64.38.025 and
RCW 64.38.065 through 64.38.085 if the cost of the reserve study exceeds five
percent of the association's annual budget, the association does not have
significant assets, or there are ten or fewer homes in the association. [2011 c
189 § 14.]
Notes:
Effective date
--2011 c 189: See note following RCW 64.38.065.
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