SENATE BILL REPORT

SB 6776

BYSenators Nelson and Talmadge

Revising the Washington condominium act.

Senate Committee on Law & Justice

Senate Hearing Date(s):January 24, 1990; January 29, 1990

Majority Report:     That Substitute Senate Bill No. 6776 be substituted therefor, and the substitute bill do pass.

     Signed by Senators Nelson, Chairman; Newhouse, Niemi, Patrick, Rinehart, Talmadge, Thorsness.

Senate Staff:Ben Barnes (786-7465)

                February 1, 1990

AS REPORTED BY COMMITTEE ON LAW & JUSTICE, JANUARY 29, 1990

BACKGROUND:

The Washington Condominium Act (WCA) was adopted to address deficiencies in the Horizontal Property Regimes Act.  The WCA differs substantially from the Horizontal Property Regimes Act.  It sets forth detailed provisions for more flexibility to the developer in the development of projects; regulation of association operations; and protection of consumers through disclosure in connection with both initial sales and resales of units and through construction warranties.  In connection with the adoption of the WCA, the Washington Condominium Task Force was reconstituted for the purpose of reviewing, drafting recommended revisions, and preparing written comments to the act.

SUMMARY:

A declarant may prepare a single disclosure document which provides all the information required by the Washington Condominium Act.

The statute of limitations for a civil action is four years. 

A condominium unit must be substantially completed and ready for occupancy prior to its sale unless the purchaser and seller specifically agree otherwise in writing.

A city or county may, by local ordinance, require that the public offering statement relating to any condominium conversion contain a copy of a written inspection report prepared by the city or county; that any violations disclosed by such a report be repaired prior to the conveyance of any residential unit within the conversion condominium; that any necessary repairs be warranted by the declarant for a period of one year following the completion of the repairs; that an escrow account be maintained during the one-year warranty period for the purpose of making repairs or satisfying warranty claims; and that relocation assistance in an amount not to exceed $500 be paid to any tenant who elects not to purchase a unit within the condominium. 

All structural components and mechanical systems of the condominium must be substantially completed before the declaration can be recorded. 

An association must prepare a financial statement in accordance with generally accepted accounting principles at least annually.

The list of information which must be furnished to a purchaser in connection with the resale of any condominium unit is amended to include any special assessments levied against the unit, past due financial obligations of the association, the annual financial statement of the association, and any other information reasonably requested by mortgagees of prospective purchasers. 

EFFECT OF PROPOSED SUBSTITUTE:

Technical corrections are made for clarification.  An insurer must comply with the provisions of Chapter 48.18 RCW before modifying the amount or extent of the coverage of an insurance policy issued to an association.

Appropriation:  none

Revenue:   none

Fiscal Note:    requested January 17, 1990

Senate Committee - Testified:   Ray Pedersen, Allenmore Ridge Condominium (pro); David Rockwell, Condominium Task Force (pro); Pete Middlebrooks, Condominium Task Force (pro); Gary Ackerman, Condominium Task Force; Jerry Lynch, American Association of Insurers (pro); Mike Stevenson, Department of Licensing-Securities Division (con)