Legislative Update Kathryn Hedrick, WSCAI Lobbyist Legislative Session Successful for LAC
The WSCAI Legislative Action Committee (LAC) experienced a very active, successful 2011 legislative session. The Governor is expected to sign legislation that will strengthen the state’s reserve study law and she recently signed legislation that brings the cap for preparing resale certificates to today’s costs.
At press time for this article the following issues are being followed or worked on by the LAC: House Bill 1309 – Reserve Studies
In 2008 legislation was enacted that requires condominium associations to disclose to prospective buyers of a condominium a copy of the association’s reserve study or a disclosure that there is no reserve study on file.
This year the LAC encouraged lawmakers to extend the current law to include disclosure to all condominium owners (not just prospective) and to those Homeowner Associations with significant assets. Significant assets are defined as the current replacement value of the major reserve components totaling 75 percent or more of the gross annual budget of the association. There are several other improvements to the existing condominium law as well.
HB 1309 passed the House of Representatives 95-1 and the Senate 48-1. The bill is now awaiting the Governor’s signature.
State Representative Mary Helen Roberts (D- Lynnwood) the prime sponsor of HB 1309 was vital moving the bill toward passage. As a condominium owner herself, Rep. Roberts was able to share her personal perspective on why disclosure of such important information is critical to the financial stability of a community association. Senator Don Benton (R-Vancouver) sponsored the Senate version of the bill and was very helpful in securing its passage in the Senate.
In an effort to give associations plenty of time to learn about the changes to the law, the legislation will not take effect until January 1, 2012. A more detailed explanation of the legislation will be published in the next WSCAI Community Associations Journal.
Senate Bill 5224 – Resale Certificates
Current law requires a condominium unit owner to produce a resale certificate to a prospective buyer before any sale is executed.
The resale certificate includes the most current statements of the association’s: assessments, special assessments, unpaid assessments, fees, the declaration, rules, bylaws, financial statements, operating budget, pending lawsuits or legal proceedings, anticipated repairs, reserves, reserve studies, and insurance coverage.
Over twenty years ago, the legislature put into law that the charge for preparing a resale certificate could not exceed $150. SB 5224, prime sponsored by Sen. Steve Hobbs (D-Lake Stevens), brings the cap to $275, bringing the cost of preparing the resale certificate in line with the cost of performing the service in today’s dollars and with today’s additional reporting requirements.
The Governor has signed this bill and it takes effect July 24, 2011. may/june 2011 | Community Associations Journal 9 Legislation that Failed to Pass the Legislature
The following bills were introduced but did not pass the 2011 legislative session. These bills will likely be back in 2012 for another try.
Senate Bill 5798 would significantly amend the Homeowners’ Association Act with respect to associations’ powers, boards of directors, budgets, and meetings. It also adopts requirements for rulemaking by homeowners’ associations.
Much of the bill includes the recommendations of the legislatively appointed ‘Homeowners Association Committee’ which convened in 2005 for 18 months. The group produced recommendations in 2008 which failed to pass the legislature primarily because the delicately compromised bill was tinkered with and unanimous support from the Committee and stakeholders was lost.
SB 5798 passed the Senate but died in the House Judiciary Committee. LAC Co-Chair, Jeremy Stilwell, testified before the committee sharing empathy for associations dealing with frustration and disorder because of the lack of clarity in the law but stressed that a comprehensive review of the law is necessary and that the Uniform Common Interest Ownership Act (UCIOA) is a model worthy of detailed analysis and adoption at the state level.
House Bill 1259 was initially introduced allowing meeting notices to be sent by electronic transmission to an owner with the owner having to ‘opt out’ if they did not wish to receive the notices. The LAC testified before the legislative committee that an ‘opt out’ process could have unintended consequences, leaving some owners without notification because they were not fully aware of the notification process. The bill was amended to require an ‘opt in’ requirement for electronic notification. The LAC supported this bill so long as it was amended to allow for the ‘opt in’ process.
Senate Bill 5377 would have clarified developer control in the Homeowners Association Act and provided protections similar to what is provided under the Condominium Act. The bill is sponsored by Senator Bob Morton (R-Orient) and passed the senate unanimously, but was stalled in the House.
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