AN ACT
Relating to condominiums; amending RCW 64.34.010, 64.34.020, 64.34.040,
64.34.200, 64.34.204, 64.34.216, 64.34.224, 64.34.228, 64.34.232, 64.34.256,
64.34.268, 64.34.300, 64.34.308, 64.34.324, 64.34.340, 64.34.352, 64.34.372,
64.34.400, 64.34.410, 64.34.415, 64.34.425, 64.34.430, 64.34.440, 64.34.445,
and 58.17.040; and adding new sections to chapter 64.34 RCW.
BE IT ENACTED BY THE LEGISLATURE
OF THE STATE OF WASHINGTON:
Sec.
1. RCW
64.34.010 and 1989 c 43 s 1-102 are each amended to read as follows:
(1)
This chapter applies to all condominiums created within this state after July
1, 1990. RCW 64.34.040 (separate titles and taxation), RCW 64.34.050
(applicability of local ordinances, regulations, and building codes), RCW
64.34.060 (condemnation), RCW 64.34.208 (construction and validity of
declaration and bylaws), RCW 64.34.212 (description of units), RCW
64.34.304(1)(a) through (f) and (k) through (q) (powers of unit owners'
association), RCW 64.34.308(1) (board of directors and officers), RCW
64.34.340 (voting--proxies), RCW 64.34.344 (tort and contract liability), RCW
64.34.354 (notification on sale of unit), RCW 64.34.360(3) (common
expenses--assessments), RCW 64.34.364 (lien for assessments), RCW 64.34.372
(association records), RCW 64.34.425 (resales of units), RCW 64.34.455 (effect
of violation on rights of action; attorney's fees), and RCW 64.34.020
(definitions) to the extent necessary in construing any of those sections,
apply to all condominiums created in this state before July 1, 1990; but those
sections apply only with respect to events and circumstances occurring after
July 1, 1990, and do not invalidate or supersede existing, inconsistent
provisions of the declaration, bylaws, or survey maps or plans of those
condominiums.
(2)
The provisions of chapter 64.32 RCW do not apply to condominiums created after
July 1, 1990, and do not invalidate any amendment to the declaration, bylaws,
and survey maps and plans of any condominium created before July 1, 1990, if
the amendment would be permitted by this chapter. The amendment must be
adopted in conformity with the procedures and requirements specified by those
instruments and by chapter 64.32 RCW. If the amendment grants to any person
any rights, powers, or privileges permitted by this chapter which are not
otherwise provided for in the declaration or chapter 64.32 RCW, all correlative
obligations, liabilities, and restrictions in this chapter also apply to that
person.
(3)
This chapter does not apply to condominiums or units located outside this
state.
(4)
RCW 64.34.400 (applicability--waiver), RCW 64.34.405 (liability for public
offering statement requirements), RCW 64.34.410 (public offering
statement--general provisions), RCW 64.34.415 (public offering statement--conversion
condominiums ((containing conversion buildings), 4-105 (public offering
statement--condominium securities))), RCW 64.34.420 (purchaser's right to
cancel), RCW 64.34.430 (escrow of deposits), RCW 64.34.440 (conversion
condominiums--notice--tenants), and RCW 64.34.455 (effect of violations on
rights of action--attorney's fees) apply with respect to all sales of units
pursuant to purchase agreements entered into after July 1, 1990, in
condominiums created before July 1, 1990, in which as of July 1, 1990,
the declarant or an affiliate of the declarant owns or had the right to
create at least ten units constituting at least twenty percent of the units
in the condominium.
Sec.
2. RCW
64.34.020 and 1990 c 166 s 1 are each amended to read as follows:
In the
declaration and bylaws, unless specifically provided otherwise or the context
requires otherwise, and in this chapter:
(1)
"Affiliate of a declarant" means any person who controls, is
controlled by, or is under common control with a declarant. A person
"controls" a declarant if the person: (a) Is a general partner,
officer, director, or employer of the declarant; (b) directly or indirectly or
acting in concert with one or more other persons, or through one or more
subsidiaries, owns, controls, holds with power to vote, or holds proxies
representing, more than twenty percent of the voting interest in the declarant;
(c) controls in any manner the election of a majority of the directors of the
declarant; or (d) has contributed more than twenty percent of the capital of
the declarant. A person "is controlled by" a declarant if the
declarant: (i) Is a general partner, officer, director, or employer of the
person; (ii) directly or indirectly or acting in concert with one or more other
persons, or through one or more subsidiaries, owns, controls, holds with power
to vote, or holds proxies representing, more than twenty percent of the voting
interest in the person; (iii) controls in any manner the election of a majority
of the directors of the person; or (iv) has contributed more than twenty
percent of the capital of the person. Control does not exist if the powers
described in this subsection are held solely as security for an obligation and
are not exercised.
(2)
"Allocated interests" means the undivided interest in the common
elements, the common expense liability, and votes in the association allocated
to each unit.
(3)
"Assessment" means all sums chargeable by the association against a
unit including, without limitation: (a) Regular and special assessments for
common expenses, charges, and fines imposed by the association; (b) interest
and late charges on any delinquent account; and (c) costs of collection,
including reasonable attorneys' fees, incurred by the association in connection
with the collection of a delinquent owner's account.
(4)
"Association" or "unit owners' association" means the unit
owners' association organized under RCW 64.34.300.
(5)
"Board of directors" means the body, regardless of name, with primary
authority to manage the affairs of the association.
(6)
"Common elements" means all portions of a condominium other than the
units.
(7)
"Common expenses" means expenditures made by or financial liabilities
of the association, together with any allocations to reserves.
(8)
"Common expense liability" means the liability for common expenses
allocated to each unit pursuant to RCW 64.34.224.
(9)
"Condominium" means real property, portions of which are designated
for separate ownership and the remainder of which is designated for common
ownership solely by the owners of those portions. Real property is not a
condominium unless the undivided interests in the common elements are vested in
the unit owners, and unless a declaration and a survey map and plans have been
recorded pursuant to this chapter.
(10)
"Conversion condominium" means a condominium (a) that at any time
before creation of the condominium was lawfully occupied wholly or partially by
a tenant or subtenant for residential purposes pursuant to a rental agreement,
oral or written, express or implied, for which the tenant or subtenant had
not received the notice described in (b) of this subsection; or (b) that,
at any time within twelve months before the conveyance of, or acceptance
of an agreement to convey, any unit therein other than to a declarant or any
affiliate of a declarant, was lawfully occupied wholly or partially by a
residential tenant of a declarant or an affiliate of a declarant and such
tenant was not notified in writing, prior to lawfully occupying a unit or
executing a rental agreement, whichever event first occurs, that the unit was
part of a condominium and subject to sale. "Conversion condominium"
shall not include a condominium in which, before July 1, 1990, any unit therein
had been conveyed or been made subject to an agreement to convey to any
transferee other than a declarant or an affiliate of a declarant.
(11)
"Conveyance" means any transfer of the ownership of a unit, including
a transfer by deed or by real estate contract and, with respect to a unit in a
leasehold condominium, a transfer by lease or assignment thereof, but shall not
include a transfer solely for security.
(12)
"Dealer" means a person who owns or has a right to acquire
either six or more units in a condominium or fifty percent or more of the units
in a condominium ((which have not previously been disposed of to any person
other than a declarant or a dealer)) containing more than two units.
(13)
"Declarant" means any person or group of persons acting in concert
who (a) executes as declarant a declaration as defined in subsection (15) of
this section, or (b) reserves or succeeds to any special declarant right under
the declaration.
(14)
"Declarant control" means the right of the declarant or persons
designated by the declarant to appoint and remove officers and members of the
board of directors, or to veto or approve a proposed action of the board or
association, pursuant to RCW 64.34.308 (4) or (5).
(15)
"Declaration" means the document, however denominated, that creates a
condominium by setting forth the information required by RCW 64.34.216 and any
amendments to that document.
(16)
"Development rights" means any right or combination of rights
reserved by a declarant in the declaration to: (a) Add real property or
improvements to a condominium; (b) create units, common elements, or limited
common elements within real property included or added to a condominium; (c)
subdivide units or convert units into common elements; ((or)) (d)
withdraw real property from a condominium; or (e) reallocate limited common
elements with respect to units that have not been conveyed by the declarant.
(17)
"Dispose" or "disposition" means a voluntary transfer or
conveyance to a purchaser or lessee of any legal or equitable interest in a
unit, but does not include the transfer or release of a security interest.
(18)
"Eligible mortgagee" means the holder of a mortgage on a unit that
has filed with the secretary of the association a written request that it be
given copies of notices of any action by the association that requires the
consent of mortgagees.
(19)
"Foreclosure" means a forfeiture or judicial or nonjudicial
foreclosure of a mortgage or a deed in lieu thereof.
(20)
"Identifying number" means ((a symbol or address that identifies
only one)) the designation of each unit in a condominium.
(21)
"Leasehold condominium" means a condominium in which all or a portion
of the real property is subject to a lease, the expiration or termination of
which will terminate the condominium or reduce its size.
(22)
"Limited common element" means a portion of the common elements
allocated by the declaration or by operation of RCW 64.34.204 (2) or (4) for
the exclusive use of one or more but fewer than all of the units.
(23)
"Master association" means an organization described in RCW
64.34.276, whether or not it is also an association described in RCW 64.34.300.
(24)
"Mortgage" means a mortgage, deed of trust or real estate contract.
(25)
"Person" means a natural person, corporation, partnership, limited
partnership, trust, governmental subdivision or agency, or other legal entity.
(26)
"Purchaser" means any person, other than a declarant or a dealer, who
by means of a disposition acquires a legal or equitable interest in a unit
other than (a) a leasehold interest, including renewal options, of less than
twenty years at the time of creation of the unit, or (b) as security for an
obligation.
(27)
"Real property" means any fee, leasehold or other estate or interest
in, over, or under land, including structures, fixtures, and other improvements
thereon and easements, rights and interests appurtenant thereto which by
custom, usage, or law pass with a conveyance of land although not described in
the contract of sale or instrument of conveyance. "Real property"
includes parcels, with or without upper or lower boundaries, and spaces that
may be filled with air or water.
(28)
"Residential purposes" means use for dwelling or recreational
purposes, or both.
(29)
"Special declarant rights" means rights reserved for the benefit of a
declarant to: (a) Complete improvements indicated on survey maps and plans
filed with the declaration under RCW 64.34.232; (b) exercise any development
right under RCW 64.34.236; (c) maintain sales offices, management offices,
signs advertising the condominium, and models under RCW 64.34.256; (d) use
easements through the common elements for the purpose of making improvements
within the condominium or within real property which may be added to the
condominium under RCW 64.34.260; (e) make the condominium part of a larger
condominium or a development under RCW ((64.34.276)) 64.34.280;
(f) make the condominium subject to a master association under RCW 64.34.276;
or (g) appoint or remove any officer of the association or any master
association or any member of the board of directors, or to veto or approve a
proposed action of the board or association, during any period of declarant
control under RCW 64.34.308(((3))) (4).
(30)
"Timeshare" shall have the meaning specified in the timeshare act,
RCW 64.36.010(11).
(31)
"Unit" means a physical portion of the condominium designated for
separate ownership, the boundaries of which are described pursuant to RCW
64.34.216(1)(d). "Separate ownership" includes leasing a unit in a
leasehold condominium under a lease that expires contemporaneously with any
lease, the expiration or termination of which will remove the unit from the
condominium.
(32)
"Unit owner" means a declarant or other person who owns a unit or
leases a unit in a leasehold condominium under a lease that expires
simultaneously with any lease, the expiration or termination of which will
remove the unit from the condominium, but does not include a person who has an
interest in a unit solely as security for an obligation. "Unit
owner" means the vendee, not the vendor, of a unit under a real estate
contract.
Sec.
3. RCW
64.34.040 and 1989 c 43 s 1-105 are each amended to read as follows:
(1) If
there is any unit owner other than a declarant, each unit that has been
created, together with its interest in the common elements, constitutes for all
purposes a separate parcel of real property.
(2) If
there is any unit owner other than a declarant, each unit together with its
interest in the common elements must be separately taxed and assessed.
(3) ((Any))
If a development right has an ascertainable market value, the development
right shall constitute a separate parcel of real property for property tax
purposes and must be separately taxed and assessed to the declarant.
(4) If
there is no unit owner other than a declarant, the real property comprising the
condominium may be taxed and assessed in any manner provided by law.
Sec.
4. RCW
64.34.200 and 1990 c 166 s 2 are each amended to read as follows:
(1) A
condominium may be created pursuant to this chapter only by recording a
declaration executed by the owner of the interest subject to this chapter in
the same manner as a deed and by simultaneously recording a survey map and
plans pursuant to RCW 64.34.232. The declaration and survey map and plans must
be recorded in every county in which any portion of the condominium is located,
and the condominium shall not have the same name as any other existing
condominium, whether created under this chapter or under chapter 64.32 RCW, in
any county in which the condominium is located.
(2) A
declaration or an amendment to a declaration adding units to a condominium may
not be recorded unless (a) all structural components and mechanical systems of
all buildings containing or comprising any units thereby created are
substantially completed as evidenced by a recorded certificate of completion
executed by the declarant which certificate may be included in the
declaration or the amendment, the survey map and plans to be recorded pursuant
to RCW 64.34.232, or a separately recorded written instrument, and (b) all
horizontal and vertical boundaries of such units are substantially completed in
accordance with the plans required to be recorded by RCW 64.34.232, as
evidenced by a recorded certificate of completion executed by a licensed
surveyor.
NEW
SECTION. Sec. 5. A new
section is added to chapter 64.34 RCW to read as follows:
Upon
the filing of a written request with the county office in which the declaration
is to be recorded, using such form of written request as may be required by the
county office and paying such fee as the county office may establish not in
excess of fifty dollars, a person may reserve the exclusive right to use a
particular name for a condominium to be created in that county. The name being
reserved shall not be identical to any other condominium or subdivision plat
located in that county, and such name reservation shall automatically lapse
unless within three hundred sixty-five days from the date on which the name
reservation is filed the person reserving that name either records a
declaration using the reserved name or files a new name reservation request.
Sec.
6. RCW
64.34.204 and 1989 c 43 s 2-102 are each amended to read as follows:
Except
as provided by the declaration:
(1) ((If))
The walls, floors, or ceilings are ((designated as)) the
boundaries of a unit, and all lath, furring, wallboard, plasterboard,
plaster, paneling, tiles, wallpaper, paint, finished flooring, and any other
materials constituting any part of the finished surfaces thereof are a part of
the unit, and all other portions of the walls, floors, or ceilings are a part
of the common elements.
(2) If
any chute, flue, duct, wire, conduit, bearing wall, bearing column, or any
other fixture lies partially within and partially outside the designated
boundaries of a unit, any portion thereof serving only that unit is a limited
common element allocated solely to that unit, and any portion thereof serving
more than one unit or any portion of the common elements is a part of the
common elements.
(3)
Subject to the provisions of subsection (2) of this section, all spaces,
interior partitions, and other fixtures and improvements within the boundaries
of a unit are a part of the unit.
(4)
Any shutters, awnings, window boxes, doorsteps, stoops, porches, balconies,
patios, and all exterior doors and windows or other fixtures designed to serve
a single unit, but which are located outside the unit's boundaries, are limited
common elements allocated exclusively to that unit.
Sec.
7. RCW
64.34.216 and 1989 c 43 s 2-105 are each amended to read as follows:
(1)
The declaration for a condominium must contain:
(a)
The name of the condominium, which must include the word
"condominium" or be followed by the words "a condominium,"
and the name of the association;
(b) A
legal description of the real property included in the condominium;
(c) A
statement of the number of units which the declarant has created and ((reserves
the right to create)), if the declarant has reserved the right to create
additional units, the number of such additional units;
(d)
The identifying number of each unit created by the declaration and a
description of the boundaries of each unit if and to the extent they are
different from the boundaries stated in RCW 64.34.204(1);
(e)
With respect to each existing unit:
(i)
The approximate square footage;
(ii)
The number of bathrooms, whole or partial;
(iii)
The number of rooms designated primarily as bedrooms;
(iv)
The number of built-in fireplaces; and
(v)
The level or levels on which each unit is located((; and
(vi)
The type of heat and heat service)).
The
data described in (ii), (iii), and (iv) of this subsection (1)(e) may be
omitted with respect to units restricted to nonresidential use;
(f)
The number of parking spaces and whether covered, uncovered, or enclosed;
(g)
The number of moorage slips, if any;
(h) A
description of any limited common elements, other than those specified in RCW
64.34.204 (2) and (4) ((and 64.34.228 (2) and (3))), as provided in RCW
64.34.232(2)(j);
(i) A
description of any real property((, except real property subject to
development rights,)) which may be allocated subsequently by the
declarant as limited common elements, other than limited common elements
specified in RCW 64.34.204 (2) and (4) ((and 64.34.228 (2) and (3))),
together with a statement that they may be so allocated;
(j) A
description of any development rights and other special declarant rights under
RCW 64.34.020(29) reserved by the declarant, together with a ((legal))
description of the real property to which ((each of those)) the
development rights ((applies)) apply, and a time limit within
which each of those rights must be exercised;
(k) If
any development right may be exercised with respect to different parcels of
real property at different times, a statement to that effect together with:
(i) Either a statement fixing the boundaries of those portions and regulating
the order in which those portions may be subjected to the exercise of each
development right, or a statement that no assurances are made in those regards;
and (ii) a statement as to whether, if any development right is exercised in
any portion of the real property subject to that development right, that
development right must be exercised in all or in any other portion of the
remainder of that real property;
(l)
Any other conditions or limitations under which the rights described in (j) of
this subsection may be exercised or will lapse;
(m) An
allocation to each unit of the allocated interests in the manner described in
RCW 64.34.224;
(n)
Any restrictions in the declaration on use, occupancy, or alienation of the
units;
(o) A
cross-reference by recording number to the survey map and plans for the units
created by the declaration; and
(p)
All matters required or permitted by RCW 64.34.220 through 64.34.232,
64.34.256, 64.34.260, 64.34.276, and 64.34.308(4).
(2)
All amendments to the declaration shall contain a cross-reference by recording
number to the declaration and to any prior amendments thereto. All amendments
to the declaration adding units shall contain a cross-reference by recording
number to the survey map and plans relating to the added units and set forth
all information required by RCW 64.34.216(1) with respect to the added units.
(3)
The declaration may contain any other matters the declarant deems appropriate.
Sec.
8. RCW
64.34.224 and 1989 c 43 s 2-107 are each amended to read as follows:
(1)
The declaration shall allocate a fraction or percentage of undivided interests
in the common elements and in the common expenses of the association, and a
portion of the votes in the association, to each unit and state the formulas or
methods used to establish those allocations. Those allocations may not
discriminate in favor of units owned by the declarant or an affiliate of the
declarant.
(2) If
units may be added to or withdrawn from the condominium, the declaration shall
state the formulas or methods to be used to reallocate the allocated
interests among all units included in the condominium after the addition or
withdrawal.
(3)
The declaration may provide: (a) For cumulative voting only for the purpose of
electing members of the board of directors; and (b) for class voting on
specified issues affecting the class if necessary to protect valid interests of
the class. A declarant may not utilize cumulative or class voting for the
purpose of evading any limitation imposed on declarants by this chapter, nor
may units constitute a class because they are owned by a declarant.
(4)
Except for minor variations due to rounding, the sum of the undivided interests
in the common elements and common expense liabilities allocated at any time to
all the units must each equal one if stated as fractions or one hundred percent
if stated as percentages. In the event of discrepancy between an allocated
interest and the result derived from application of the pertinent formula, the
allocated interest prevails.
(5)
Except where permitted by other sections of this chapter, the common elements
are not subject to partition, and any purported conveyance, encumbrance,
judicial sale, or other voluntary or involuntary transfer of an undivided
interest in the common elements made without the unit to which that interest is
allocated is void.
Sec.
9. RCW 64.34.228
and 1989 c 43 s 2-108 are each amended to read as follows:
(1)
Except for the limited common elements described in RCW 64.34.204 (2) and (4),
the declaration shall specify to which unit or units each limited common
element is allocated.
(2) Except
in the case of a reallocation being made by a declarant pursuant to a
development right reserved in the declaration, a limited common element may
only be reallocated between units with the approval of the board of directors
and by an amendment to the declaration executed by the owners of the units to
which the limited common element was and will be allocated. The board of
directors shall approve the request of the owner or owners under this
subsection within thirty days, or within such other period provided by the
declaration, unless the proposed reallocation does not comply with this chapter
or the declaration. The failure of the board of directors to act upon a
request within such period shall be deemed approval thereof. The amendment
shall be recorded in the names of the parties and of the condominium.
(3)
Unless otherwise provided in the declaration, ((sixty-seven percent of))
the ((unit)) owners of units to which at least sixty-seven percent of
the votes are allocated, including the owner of the unit to which the
limited common element will be assigned or incorporated, must agree to
reallocate a common element as a limited common element or to incorporate a common
element or a limited common element into an existing unit. Such
reallocation or incorporation shall be reflected in an amendment to the
declaration, survey map, or plans.
Sec.
10. RCW
64.34.232 and 1989 c 43 s 2-109 are each amended to read as follows:
(1) A
survey map and plans executed by the declarant shall be recorded simultaneously
with, and contain cross-references by recording number to, the declaration and
any amendments. The survey map and plans must be clear and legible and contain
a certification by the person making the survey or the plans that all
information required by this section is supplied. All plans filed shall be in
such style, size, form and quality as shall be prescribed by the recording
authority of the county where filed, and a copy shall be delivered to the
county assessor.
(2)
Each survey map shall show or state:
(a)
The name of the condominium and a legal description and a survey of the land in
the condominium and of any land that may be added to the condominium;
(b)
The boundaries of all land not subject to development rights, or subject only
to the development right to withdraw, and the location and dimensions of all
existing buildings containing units on that land;
(c)
The boundaries of any land subject to development rights, labeled ((to
identify the rights applicable to each parcel)) "SUBJECT TO
DEVELOPMENT RIGHTS SET FORTH IN THE DECLARATION"; any land that may be
added to the condominium shall also be labeled "MAY BE ADDED TO THE
CONDOMINIUM"; any land that may be withdrawn from the condominium shall
also be labeled "MAY BE WITHDRAWN FROM THE CONDOMINIUM";
(d)
The extent of any encroachments by or upon any portion of the condominium;
(e) To
the extent feasible, the location and dimensions of all recorded easements
serving or burdening any portion of the condominium and any unrecorded
easements of which a surveyor knows or reasonably should have known, based on
standard industry practices, while conducting the survey;
(f) Subject
to the provisions of subsection (8) of this section, the location and
dimensions of any vertical unit boundaries not shown or projected on plans
recorded pursuant to subsection (4) of this section and that unit's identifying
number;
(g)
The location with reference to an established datum of any horizontal unit
boundaries not shown or projected on plans recorded pursuant to subsection (4)
of this section and that unit's identifying number;
(h)
The location and dimensions of any real property in which the unit owners will
own only an estate for years, labeled as "leasehold real property";
(i) The
distance between any noncontiguous parcels of real property comprising the
condominium;
(j)
The general location of any existing principal common amenities listed in a
public offering statement pursuant to RCW 64.34.410(1)(i) and any limited
common elements, including limited common element porches, balconies, patios,
parking spaces, and storage facilities, but not including the other limited
common elements described in RCW 64.34.204 (2) and (4);
(k) In
the case of real property not subject to development rights, all other matters
customarily shown on land surveys.
(3) A
survey map may also show the intended location and dimensions of any
contemplated improvement to be constructed anywhere within the condominium.
Any contemplated improvement shown must be labeled either "MUST BE
BUILT" or "NEED NOT BE BUILT."
(4) To
the extent not shown or projected on the survey map, plans of the existing
units must show or project:
(a) Subject
to the provisions of subsection (8) of this section, the location and dimensions
of the vertical boundaries of each unit, and that unit's identifying number;
(b)
Any horizontal unit boundaries, with reference to an established datum, and
that unit's identifying number; and
(c)
Any units in which the declarant has reserved the right to create additional
units or common elements under RCW 64.34.236(3), identified appropriately.
(5)
Unless the declaration provides otherwise, the horizontal boundaries of part of
a unit located outside of a building have the same elevation as the horizontal
boundaries of the inside part and in such case need not be depicted on the
survey map and plans.
(6)
Upon exercising any development right, the declarant shall record either a new
survey map and plans necessary to conform to the requirements of subsections
(1), (2), and (3) of this section or new certifications of a survey map and
plans previously recorded if the documents otherwise conform to the
requirements of those subsections.
(7)
Any survey map, plan, or certification required by this section shall be made
by a licensed surveyor.
(8)
In showing or projecting the location and dimensions of the vertical boundaries
of a unit under subsections (2)(f) and (4)(a) of this section, it is not
necessary to show the thickness of the walls constituting the vertical
boundaries or otherwise show the distance of those vertical boundaries either
from the exterior surface of the building containing that unit or from adjacent
vertical boundaries of other units if: (a) The walls are designated to be the
vertical boundaries of that unit; (b) the unit is located within a building,
the location and dimensions of the building having been shown on the survey map
under subsection (2)(b) of this section; and (c) the graphic general location
of the vertical boundaries are shown in relation to the exterior surfaces of
that building and to the vertical boundaries of other units within that
building.
Sec.
11. RCW
64.34.256 and 1989 c 43 s 2-115 are each amended to read as follows:
A
declarant may maintain sales offices, management offices, and models in units
or on common elements in the condominium only if the declaration so provides
and specifies the rights of a declarant with regard to the number, ((size,))
location, and relocation thereof. Any sales office, management office, or
model not designated a unit by the declaration is a common element and, if a
declarant ceases to be a unit owner, the declarant ceases to have any rights
with regard thereto unless it is removed promptly from the condominium in
accordance with a right to remove reserved in the declaration. Subject to any
limitations in the declaration, a declarant may maintain signs on the common
elements advertising the condominium. The provisions of this section are
subject to the provisions of other state law and to local ordinances.
Sec.
12. RCW
64.34.268 and 1989 c 43 s 2-118 are each amended to read as follows:
(1)
Except in the case of a taking of all the units by condemnation under RCW
64.34.060, a condominium may be terminated only by agreement of unit owners of
units to which at least eighty percent of the votes in the association are
allocated, or any larger percentage the declaration specifies: PROVIDED, That
the declaration may specify a smaller percentage only if all of the units in
the condominium are restricted exclusively to nonresidential uses.
(2) An
agreement to terminate must be evidenced by the execution of a termination
agreement or ratifications thereof, in the same manner as a deed, by the
requisite number of unit owners. The termination agreement must specify a date
after which the agreement will be void unless it is recorded before that date
and shall contain a description of the manner in which the creditors of the
association will be paid or provided for. A termination agreement and all
ratifications thereof must be recorded in every county in which a portion of
the condominium is situated and is effective only upon recording. A
termination agreement may be amended by complying with all of the requirements
of this section.
(3) A
termination agreement may provide that all the common elements and units of the
condominium shall be sold following termination. If, pursuant to the
agreement, any real property in the condominium is to be sold following
termination, the termination agreement must set forth the minimum terms of the
sale.
(4)
The association, on behalf of the unit owners, may contract for the sale of
real property in the condominium, but the contract is not binding on the unit
owners until approved pursuant to subsections (1) and (2) of this section. If
any real property in the condominium is to be sold following termination, title
to that real property, upon termination, vests in the association as trustee
for the holders of all interests in the units. Thereafter, the association has
all powers necessary and appropriate to effect the sale. Until the sale has
been concluded and the proceeds thereof distributed, the association continues
in existence with all powers it had before termination. Proceeds of the sale
must be distributed to unit owners and lien holders as their interests may
appear, in proportion to the respective interests of unit owners as provided in
subsection (7) of this section. Unless otherwise specified in the termination
agreement, as long as the association holds title to the real property, each
unit owner and the owner's successors in interest have an exclusive right to
occupancy of the portion of the real property that formerly constituted the
owner's unit. During the period of that occupancy, each unit owner and the
owner's successors in interest remain liable for all assessments and other
obligations imposed on unit owners by this chapter or the declaration.
(5) If
the real property constituting the condominium is not to be sold following
termination, title to all the real property in the condominium vests in the
unit owners upon termination as tenants in common in proportion to their
respective interests as provided in subsection (7) of this section, and liens
on the units shift accordingly. While the tenancy in common exists, each unit
owner and the owner's successors in interest have an exclusive right to
occupancy of the portion of the real property that formerly constituted the
owner's unit.
(6)
Following termination of the condominium, the proceeds of any sale of real
property, together with the assets of the association, are held by the association
as trustee for unit owners and holders of liens on the units and creditors of
the association as their interests may appear. No such proceeds or assets may
be disbursed to the owners until all of the creditors of the association have
been paid or provided for. Following termination, creditors of the association
holding liens on the units, which were recorded or perfected under RCW 4.64.020
before termination, may enforce those liens in the same manner as any lien
holder.
(7)
The respective interests of unit owners referred to in subsections (4), (5),
and (6) of this section are as follows:
(a)
Except as provided in (b) of this subsection, the respective interests of unit
owners are the fair market values of their units, limited common elements, and
common element interests immediately before the termination, as determined by
one or more independent appraisers selected by the association. The decision
of the independent appraisers shall be distributed to the unit owners and
becomes final unless disapproved, within thirty days after distribution, by
unit owners of units to which twenty-five percent of the votes in the
association are allocated. The proportion of any unit owner's interest to that
of all unit owners is determined by dividing the fair market value of that unit
owner's unit and common element interest by the total fair market values of all
the units and common elements.
(b) If
any unit or any limited common element is destroyed to the extent that an
appraisal of the fair market value thereof before destruction cannot be made,
the interests of all unit owners are their respective common element interests
immediately before the termination.
(8)
Except as provided in subsection (9) of this section, foreclosure or
enforcement of a lien or encumbrance against the entire condominium does not of
itself terminate the condominium, and foreclosure or enforcement of a lien or
encumbrance against a portion of the condominium, other than withdrawable real
property, does not withdraw that portion from the condominium. Foreclosure or
enforcement of a lien or encumbrance against withdrawable real property does
not of itself withdraw that real property from the condominium, but the person
taking title thereto has the right to require from the association, upon
request, an amendment excluding the real property from the condominium.
(9) If
a lien or encumbrance against a portion of the real property that is
withdrawable from the condominium has priority over the declaration, and the
lien or encumbrance has not been partially released as to a unit, the ((parties
foreclosing the lien or encumbrance)) purchaser at the foreclosure or
such purchaser's successors may, upon foreclosure, record an instrument ((excluding))
exercising the right to withdraw the real property subject to that lien
or encumbrance from the condominium. The board of directors shall reallocate
interests as if the foreclosed portion were condemned.
(10)
The right of partition under chapter 7.52 RCW shall be suspended if an
agreement to sell the property is provided for in the termination agreement
pursuant to subsection (3) of this section. The suspension of the right to
partition shall continue unless and until no binding obligation to sell exists
three months after the recording of the termination agreement, the binding sale
agreement is terminated, or one year after the termination agreement is
recorded, whichever first occurs.
NEW
SECTION. Sec. 13. A new
section is added to chapter 64.34 RCW to read as follows:
(1) If
the declaration provides that any of the powers described in RCW 64.34.304 are
to be exercised by or may be delegated to a profit or nonprofit corporation
that exercises those or other powers on behalf of unit owners owning less than
all of the units in a condominium, and where those unit owners share the
exclusive use of one or more limited common elements within the condominium or
share some property or other interest in the condominium in common that is not
shared by the remainder of the unit owners in the condominium, all provisions
of this chapter applicable to unit owners' associations apply to any such
corporation, except as modified by this section. The delegation of powers to a
subassociation shall not be used to discriminate in favor of units owned by the
declarant or an affiliate of the declarant.
(2) A
subassociation may exercise the powers set forth in RCW 64.34.304(1) only to
the extent expressly permitted by the declaration of the condominium of which
the units in the subassociation are a part of or expressly described in the
delegations of power from that condominium to the subassociation.
(3) If
the declaration of any condominium contains a delegation of certain powers to a
subassociation, or provides that the board of directors of the condominium may
make such a delegation, the members of the board of directors have no liability
for the acts or omissions of the subassociation with respect to those powers so
exercised by the subassociation following delegation.
(4)
The rights and responsibilities of unit owners with respect to the unit owners'
association set forth in RCW 64.34.300 through 64.34.376 apply to the conduct
of the affairs of a subassociation.
(5)
Notwithstanding the provisions of RCW 64.34.308(6) with respect to the election
of the board of directors of an association by all unit owners after the period
of declarant control ends, the board of directors of the subassociation shall
be elected after the period of declarant control by the unit owners of all of
the units in the condominium subject to the subassociation.
(6)
The declaration of the condominium creating the subassociation may provide that
the authority of the board of directors of the subassociation is exclusive with
regard to the powers and responsibilities delegated to it. In the alternative,
the declaration may provide as to some or all such powers that the authority of
the board of directors of a subassociation is concurrent with and subject to
the authority of the board of directors of the unit owners' association, in
which case the declaration shall also contain standards and procedures for the
review of the decisions of the board of directors of the subassociation and
procedures for resolving any dispute between the board of the unit owners'
association and the board of the subassociation.
Sec.
14. RCW
64.34.300 and 1989 c 43 s 3-101 are each amended to read as follows:
A unit
owners' association shall be organized no later than the date the first unit in
the condominium is conveyed. The membership of the association at all times
shall consist exclusively of all the unit owners. Following termination of the
condominium, the membership of the association shall consist of all of the unit
owners at the time of termination entitled to distributions of proceeds under
RCW 64.34.268 or their heirs, successors, or assigns. The association shall be
organized as a profit or nonprofit corporation. In case of any conflict
between Title ((23A)) 23B RCW, the business corporation act,
chapter 24.03 RCW, the nonprofit corporation act, or chapter 24.06 RCW, the
nonprofit miscellaneous and mutual corporations act, and this chapter, this
chapter shall control.
Sec.
15. RCW
64.34.308 and 1989 c 43 s 3-103 are each amended to read as follows:
(1)
Except as provided in the declaration, the bylaws, subsection (2) of this
section, or other provisions of 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 are required to
exercise: (a) If appointed by the declarant, the care required of fiduciaries
of the unit owners; or (b) if elected by the unit owners, ordinary and
reasonable care.
(2)
The board of directors shall not act on behalf of the association to amend the
declaration in any manner that requires the vote or approval of the unit owners
pursuant to RCW 64.34.264, to terminate the condominium pursuant to RCW
64.34.268, or to elect members of the board of directors or determine the qualifications,
powers, and duties, or terms of office of members of the board of directors
pursuant to subsection (6) of this section; but the board of directors may fill
vacancies in its membership for the unexpired portion of any term.
(3)
Within thirty days after adoption of any proposed budget for the condominium,
the board of directors shall provide a summary of the budget to all the unit
owners and shall set a date for a meeting of the unit 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 units to
which a majority of the votes in the association are allocated or any larger
percentage specified in the declaration reject the budget, 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 unit owners shall be continued until such time as the unit
owners ratify a subsequent budget proposed by the board of directors.
(4)(a)
Subject to subsection (5) of this section, the declaration may provide for a
period of declarant control of the association, during which period a
declarant, or persons designated by the declarant, may: (i) Appoint and
remove the officers and members of the board of directors; or (ii) veto or
approve a proposed action of the board or association. A declarant's failure
to veto or approve such proposed action in writing within thirty days after
receipt of written notice of the proposed action shall be deemed approval by
the declarant.
(b)
Regardless of the period provided in the declaration, a period of declarant
control terminates no later than the earlier of: (((a))) (i)
Sixty days after conveyance of seventy-five percent of the units which may be
created to unit owners other than a declarant; (((b))) (ii) two
years after the last conveyance or transfer of record of a unit except as
security for a debt; (((c))) (iii) two years after any
development right to add new units was last exercised; or (((d))) (iv)
the date on which the declarant records an amendment to the declaration
pursuant to which the declarant voluntarily surrenders the right to further
appoint and remove officers and members of the board of directors. A declarant
may voluntarily surrender the right to appoint and remove officers and members
of the board of directors before termination of that period pursuant to (((a),
(b), and (c))) (i), (ii), and (iii) of this subsection (4)(b),
but in that event the declarant may require, for the duration of the period of
declarant control, that specified actions of the association or board of
directors, as described in a recorded instrument executed by the declarant, be
approved by the declarant before they become effective.
(5)
Not later than sixty days after conveyance of twenty-five percent of the units
which may be created to unit owners other than a declarant, at least one member
and not less than twenty-five percent of the members of the board of directors
must be elected by unit owners other than the declarant. Not later than sixty
days after conveyance of fifty percent of the units which may be created to
unit owners other than a declarant, not less than thirty-three and one-third
percent of the members of the board of directors must be elected by unit owners
other than the declarant.
(6)
Within thirty days after the termination of any period of declarant control,
the unit owners shall elect a board of directors of at least three members, at
least a majority of whom must be unit owners. The number of directors need
not exceed the number of units then in the condominium. The board of
directors shall elect the officers. Such members of the board of directors and
officers shall take office upon election.
(7)
Notwithstanding any provision of the declaration or bylaws to the contrary, the
unit owners, by a two-thirds vote of the voting power in the association
present and entitled to vote at any meeting of the unit owners at which a
quorum is present, may remove any member of the board of directors with or
without cause, other than a member appointed by the declarant. The declarant
may not remove any member of the board of directors elected by the unit
owners. Prior to the termination of the period of declarant control, the unit
owners, other than the declarant, may remove by a two-thirds vote, any director
elected by the unit owners.
Sec.
16. RCW
64.34.324 and 1989 c 43 s 3-107 are each amended to read as follows:
(1)
Unless provided for in the declaration, the bylaws of the association shall
provide for:
(a)
The number, qualifications, powers and duties, terms of office, and manner of
electing and removing the board of directors and officers and filling
vacancies;
(b)
Election by the board of directors of such officers of the association as the
bylaws specify;
(c)
Which, if any, of its powers the board of directors or officers may delegate to
other persons or to a managing agent;
(d)
Which of its officers may prepare, execute, certify, and record amendments to
the declaration on behalf of the association; and
(e)
The method of amending the bylaws.
(2)
Subject to the provisions of the declaration, the bylaws may provide for any
other matters the association deems necessary and appropriate.
(3) ((If
the declaration or bylaws provide that any officers or directors of the
association must be unit owners, then)) In determining the
qualifications of any officer or director of the association,
notwithstanding the provision of RCW 64.34.020(32)((,)) the term
"unit owner" in such context shall, unless the declaration or bylaws
otherwise provide, be deemed to include any director, officer, partner in, or
trustee of any person, who is, either alone or in conjunction with another
person or persons, a unit owner. Any officer or director of the association
who would not be eligible to serve as such if he or she were not a director,
officer, partner in, or trustee of such a person shall be disqualified from
continuing in office if he or she ceases to have any such affiliation with that
person, or if that person would have been disqualified from continuing in such
office as a natural person.
Sec.
17. RCW
64.34.340 and 1989 c 43 s 3-111 are each amended to read as follows:
(1) If
only one of the multiple owners of a unit is present at a meeting of the
association or has delivered a written ballot or proxy to the association
secretary, the owner is entitled to cast all the votes allocated to that
unit. If more than one of the multiple owners are present or has delivered
a written ballot or proxy to the association secretary, the votes allocated
to that unit may be cast only in accordance with the agreement of a majority in
interest of the multiple owners, unless the declaration expressly provides
otherwise. There is majority agreement if any one of the multiple owners casts
the votes allocated to that unit without protest being made promptly to the
person presiding over the meeting by any of the other owners of the unit.
(2)
Votes allocated to a unit may be cast pursuant to a proxy duly executed by a
unit owner. If a unit is owned by more than one person, each owner of the unit
may vote or register protest to the casting of votes by the other owners of the
unit through a duly executed proxy. A unit owner may not revoke a proxy given
pursuant to this section except by actual notice of revocation to the person
presiding over a meeting of the association. A proxy is void if it is not
dated or purports to be revocable without notice. Unless stated otherwise in
the proxy, a proxy terminates eleven months after its date of issuance.
(3) If
the declaration requires that votes on specified matters affecting the
condominium be cast by lessees rather than unit owners of leased units: (a)
The provisions of subsections (1) and (2) of this section apply to lessees as
if they were unit owners; (b) unit owners who have leased their units to other
persons may not cast votes on those specified matters; and (c) lessees are
entitled to notice of meetings, access to records, and other rights respecting
those matters as if they were unit owners. Unit owners must also be given
notice, in the manner provided in RCW 64.34.332, of all meetings at which
lessees may be entitled to vote.
(4) No
votes allocated to a unit owned by the association may be cast, and in
determining the percentage of votes required to act on any matter, the votes
allocated to units owned by the association shall be disregarded.
Sec.
18. RCW 64.34.352
and 1990 c 166 s 4 are each amended to read as follows:
(1)
Commencing not later than the time of the first conveyance of a unit to a
person other than a declarant, the association shall maintain, to the extent
reasonably available:
(a)
Property insurance on the condominium, which may, but need not, include
equipment, improvements, and betterments in a unit installed by the declarant
or the unit owners, insuring against all risks of direct physical loss commonly
insured against ((or, in the case of a conversion building, against fire and
extended coverage perils)). The total amount of insurance after
application of any deductibles shall be not less than eighty percent, or such
greater amount specified in the declaration, of the actual cash value of the
insured property at the time the insurance is purchased and at each renewal
date, exclusive of land, excavations, foundations, and other items normally
excluded from property policies; and
(b)
Liability insurance, including medical payments insurance, in an amount
determined by the board of directors but not less than the amount specified in
the declaration, covering all occurrences commonly insured against for death,
bodily injury, and property damage arising out of or in connection with the
use, ownership, or maintenance of the common elements.
(2) If
the insurance described in subsection (1) of this section is not reasonably
available, or is modified, canceled, or not renewed, the association promptly
shall cause notice of that fact to be hand-delivered or sent prepaid by first
class United States mail to all unit owners, to each eligible mortgagee, and to
each mortgagee to whom a certificate or memorandum of insurance has been issued
at their respective last known addresses. The declaration may require the
association to carry any other insurance, and the association in any event may
carry any other insurance it deems appropriate to protect the association or
the unit owners.
(3)
Insurance policies carried pursuant to subsection (1) of this section shall
provide that:
(a)
Each unit owner is an insured person under the policy with respect to liability
arising out of the owner's interest in the common elements or membership in the
association;
(b)
The insurer waives its right to subrogation under the policy against any unit
owner, member of the owner's household, and lessee of the owner;
(c) No
act or omission by any unit owner, unless acting within the scope of the
owner's authority on behalf of the association, will void the policy or be a
condition to recovery under the policy; and
(d)
If, at the time of a loss under the policy, there is other insurance in the
name of a unit owner covering the same risk covered by the policy, the
association's policy provides primary insurance.
(4)
Any loss covered by the property insurance under subsection (1)(a) of this
section must be adjusted with the association, but the insurance proceeds for
that loss are payable to any insurance trustee designated for that purpose, or
otherwise to the association, and not to any holder of a mortgage. The
insurance trustee or the association shall hold any insurance proceeds in trust
for unit owners and lienholders as their interests may appear. Subject to the
provisions of subsection (7) of this section, the proceeds must be disbursed
first for the repair or restoration of the damaged property, and unit owners
and lienholders are not entitled to receive payment of any portion of the
proceeds unless there is a surplus of proceeds after the property has been
completely repaired or restored or the condominium is terminated.
(5) An
insurance policy issued to the association does not prevent a unit owner from
obtaining insurance for the owner's own benefit.
(6) An
insurer that has issued an insurance policy under this section shall issue
certificates or memoranda of insurance to the association and, upon written
request, to any unit owner or holder of a mortgage. The insurer issuing the
policy may not modify the amount or the extent of the coverage of the policy or
cancel or refuse to renew the policy unless the insurer has complied with all
applicable provisions of chapter 48.18 RCW pertaining to the cancellation or
nonrenewal of contracts of insurance. The insurer shall not modify the amount
or the extent of the coverage of the policy, or cancel or refuse to renew the
policy without complying with this section.
(7)
Any portion of the condominium for which insurance is required under this
section which is damaged or destroyed shall be repaired or replaced promptly by
the association unless: (a) The condominium is terminated; (b) repair or
replacement would be illegal under any state or local health or safety statute
or ordinance; or (c) eighty percent of the unit owners, including every owner
of a unit or assigned limited common element which will not be rebuilt, vote
not to rebuild. The cost of repair or replacement in excess of insurance
proceeds and reserves is a common expense. If all of the damaged or destroyed
portions of the condominium are not repaired or replaced: (i) The insurance
proceeds attributable to the damaged common elements shall be used to restore
the damaged area to a condition compatible with the remainder of the
condominium; (ii) the insurance proceeds attributable to units and limited
common elements which are not rebuilt shall be distributed to the owners of
those units and the owners of the units to which those limited common elements
were allocated, or to lienholders, as their interests may appear; and (iii) the
remainder of the proceeds shall be distributed to all the unit owners or
lienholders, as their interests may appear, in proportion to the common element
interests of all the units. If the unit owners vote not to rebuild any unit,
that unit's allocated interests are automatically reallocated upon the vote as
if the unit had been condemned under RCW 64.34.060(1), and the association
promptly shall prepare, execute, and record an amendment to the declaration
reflecting the reallocations. Notwithstanding the provisions of this
subsection, RCW 64.34.268 governs the distribution of insurance proceeds if the
condominium is terminated.
(8)
The provisions of this section may be varied or waived as provided in the
declaration if all units of a condominium are restricted to nonresidential use.
Sec.
19. RCW
64.34.372 and 1990 c 166 s 7 are each amended to read as follows:
(1)
The association shall keep financial records sufficiently detailed to enable
the association to comply with RCW 64.34.425. All financial and other records of
the association, including but not limited to checks, bank records, and
invoices, are the property of the association, but shall be made reasonably
available for examination and copying by the manager of the
association, any unit owner ((and)), or the owner's
authorized agents. At least annually, the association shall prepare, or cause
to be prepared, a financial statement of the association in accordance with
generally accepted accounting principles. The financial statements of
condominiums consisting of fifty or more units shall be audited at least
annually by a certified public accountant. In the case of a condominium
consisting of fewer than fifty units, an annual audit is also required but may
be waived annually by unit owners other than the declarant of units to which
sixty percent of the votes are allocated, excluding the votes allocated to
units owned by the declarant.
(2)
The funds of an 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. Any reserve funds of an
association shall be kept in a segregated account and any transaction affecting
such funds, including the issuance of checks, shall require the signature of at
least two persons who are officers or directors of the association.
Sec.
20. RCW
64.34.400 and 1990 c 166 s 9 are each amended to read as follows:
(1)
This article applies to all units subject to this chapter, except as provided
in subsection (2) of this section and unless and to the extent otherwise agreed
to in writing by the seller and purchasers of those units that are restricted
to nonresidential use in the declaration.
(2) ((Neither
a public offering statement nor a resale certificate need be prepared or
delivered)) This article shall not apply in the case of:
(a) A
conveyance by gift, devise, or descent;
(b) A
conveyance pursuant to court order;
(c) A
disposition by a government or governmental agency;
(d) A
conveyance by foreclosure;
(e) A
disposition ((to a dealer who intends to offer those units to purchasers))
of all of the units in a condominium in a single transaction;
(f)
A disposition to other than a purchaser as defined in RCW 64.34.020(26); or
(((f)))
(g) A disposition that may be canceled at any time and for any reason by
the purchaser without penalty.
Sec.
21. RCW
64.34.410 and 1989 c 43 s 4-103 are each amended to read as follows:
(1) A
public offering statement shall contain the following information:
(a)
The name and address of the condominium;
(b)
The name and address of the declarant;
(c)
The name and address of the management company, if any;
(d)
The relationship of the management company to the declarant, if any;
(e) A
list of up to the five most recent condominium projects completed by the
declarant or an affiliate of the declarant within the past five years,
including the names of the condominiums, their addresses, and the number of
existing units in each. For the purpose of this section, a condominium is
"completed" when any one unit therein has been rented or sold;
(f)
The nature of the interest being offered for sale;
(g) A
brief description of the permitted uses and use restrictions pertaining to the
units and the common elements;
(h)
The number of existing units in the condominium and the maximum number of units
that may be added to the condominium;
(i) A
list of the principal common amenities in the condominium which materially
affect the value of the condominium and those that will or may be added to the
condominium;
(j) A
list of the limited common elements assigned to the units being offered for
sale;
(k)
The identification of any real property not in the condominium, the owner of
which has access to any of the common elements, and a description of the terms
of such access;
(l)
The identification of any real property not in the condominium to which unit
owners have access and a description of the terms of such access;
(m)
The status of construction of the units and common elements, including
estimated dates of completion if not completed;
(n)
The estimated current common expense liability for the units being offered;
(o) An
estimate of any payment with respect to the common expense liability for the
units being offered which will be due at closing;
(p)
The estimated current amount and purpose of any fees not included in the common
expenses and charged by the declarant or the association for the use of any of
the common elements;
(q)
Any assessments which have been agreed to or are known to the declarant and
which, if not paid, may constitute a lien against any units or common elements
in favor of any governmental agency;
(r)
The identification of any parts of the condominium, other than the units, which
any individual owner will have the responsibility for maintaining;
(s) If
the condominium involves a conversion ((building)) condominium,
the information required by RCW 64.34.415;
(t)
Whether timesharing is restricted or prohibited, and if restricted, a general
description of such restrictions;
(u) A
list of all development rights reserved to the declarant and all special
declarant rights reserved to the declarant, together with the dates such rights
must terminate, and a copy of or reference by recording number to any recorded
transfer of a special declarant right;
(v) ((The
identification of any model units and)) A description of ((the))
any material differences in terms of furnishings, fixtures, finishes,
and equipment between ((the)) any model unit available to the
purchaser at the time the agreement for sale is executed and the unit being
offered;
(w)
Any liens on real property to be conveyed to the association required to be
disclosed pursuant to RCW 64.34.435(2)(b);
(x) A
list of any physical hazards known to the declarant which particularly affect
the condominium or the immediate vicinity in which the condominium is located
and which are not readily ascertainable by the purchaser;
(y) A
brief description of any construction warranties to be provided to the
purchaser;
(z)
Any building code violation citations received by the declarant in connection
with the condominium which have not been corrected;
(aa) A
statement of any unsatisfied judgments or pending suits against the
association, a statement of the status of any pending suits material to the
condominium of which the declarant has actual knowledge, and a statement of any
litigation brought by an owners' association, unit owner, or governmental
entity in which the declarant or any affiliate of the declarant has been a
defendant, arising out of the construction, sale, or administration of any
condominium within the previous five years, together with the results thereof,
if known;
(bb)
Any rights of first refusal to lease or purchase any unit or any of the common
elements;
(cc)
The extent to which the insurance provided by the association covers
furnishings, fixtures, and equipment located in the unit;
(dd) A
notice which describes a purchaser's right to cancel the purchase agreement or
extend the closing under RCW 64.34.420, including applicable time frames and
procedures;
(ee) Any
reports or statements required by RCW 64.34.415 or 64.34.440(6)(a). RCW
64.34.415 shall apply to the public offering statement of a condominium in
connection with which a final certificate of occupancy was issued more than
sixty calendar months prior to the preparation of the public offering statement
whether or not the condominium is a conversion condominium as defined in RCW
64.34.020(10);
(ff)
A list of the documents which the prospective purchaser is entitled to receive
from the declarant before the rescission period commences;
(((ff)))
(gg) A notice which states: A purchaser may not rely on any
representation or express warranty unless it is contained in the public
offering statement or made in writing signed by the declarant or by any person
identified in the public offering statement as the declarant's agent;
(((gg)))
(hh) A notice which states: This public offering statement is only a
summary of some of the significant aspects of purchasing a unit in this
condominium and the condominium documents are complex, contain other important
information, and create binding legal obligations. You should consider seeking
the assistance of legal counsel; and
(((hh)))
(ii) Any other information and cross-references which the declarant
believes will be helpful in describing the condominium to the recipients of the
public offering statement, all of which may be included or not included at the
option of the declarant.
(2)
The public offering statement shall include copies of each of the following
documents: The declaration, the survey map and plans, the articles of
incorporation of the association, bylaws of the association, rules and
regulations, if any, current or proposed budget for the association, and the
balance sheet of the association current within ninety days if assessments have
been collected for ninety days or more.
If any
of the foregoing documents listed in this subsection are not available because
they have not been executed, adopted, or recorded, drafts of such documents
shall be provided with the public offering statement, and, before closing the
sale of a unit, the purchaser shall be given copies of any material changes
between the draft of the proposed documents and the final documents.
(3)
The disclosures required by subsection (1) (g), (j), (r), (t), (u), and (bb) of
this section shall also contain a reference to specific sections in the
condominium documents which further explain the information disclosed.
(4)
The disclosures required by subsection (1) (dd), (((ff))) (gg),
and (((gg))) (hh) of this section shall be located at the top of
the first page of the public offering statement and be typed or printed in
ten-point bold face type size.
(5) A
declarant shall promptly amend the public offering statement to reflect any
material change in the information required by this section.
Sec.
22. RCW
64.34.415 and 1990 c 166 s 10 are each amended to read as follows:
(1)
The public offering statement of a conversion condominium shall contain, in
addition to the information required by RCW 64.34.410:
(a) ((A
statement by the declarant, based on)) Either a copy of a report
prepared by an independent, licensed architect or engineer, ((describing))
or a statement by the declarant based on such report, which report or
statement describes, to the extent reasonably ascertainable, the present condition
of all structural components and mechanical and electrical installations
material to the use and enjoyment of the condominium;
(b) A
statement by the declarant of the expected useful life of each item reported on
in (a) of this subsection or a statement that no representations are made in
that regard; and
(c) A
list of any outstanding notices of uncured violations of building code or other
municipal regulations, together with the estimated cost of curing those
violations. Unless the purchaser waives in writing the curing of specific
violations, the extent to which the declarant will cure such violations prior
to the closing of the sale of a unit in the condominium shall be included.
(2)
This section applies only to condominiums containing units that may be occupied
for residential use.
Sec.
23. RCW
64.34.425 and 1990 c 166 s 12 are each amended to read as follows:
(1)
Except in the case of a sale where delivery of a public offering statement is
required, or unless exempt under RCW 64.34.400(2), a unit owner shall furnish
to a purchaser before execution of any contract for sale of a unit, or
otherwise before conveyance, ((a copy of the declaration, the bylaws, the
rules or regulations of the association, and)) a resale certificate,
signed by an officer or authorized agent of the association and based on
the books and records of the association and the actual knowledge of the person
signing the certificate, containing:
(a) A
statement disclosing ((the effect on the proposed conveyance of)) any
right of first refusal or other restraint on the free alienability of the unit contained
in the declaration;
(b) A
statement setting forth the amount of the monthly common expense assessment and
any unpaid common expense or special assessment currently due and payable from
the selling unit owner and a statement of any special assessments that have
been levied against the unit which have not been paid even though not yet due;
(c) A
statement, which shall be current to within forty-five days, of any common
expenses or special assessments against any unit in the condominium that are
past due over thirty days;
(d) A
statement, which shall be current to within forty-five days, of any obligation
of the association which is past due over thirty days;
(e) A
statement of any other fees payable by unit owners;
(f) A
statement of any anticipated repair or replacement cost in excess of five
percent of the annual budget of the association that has been approved by the
board of directors;
(g) A
statement of the amount of any reserves for repair or replacement and of any
portions of those reserves currently designated by the association for any
specified projects;
(h)
The annual financial statement of the association, including the audit report
if it has been prepared, for the year immediately preceding the current year.
(i) A
balance sheet and a revenue and expense statement of the association prepared
on an accrual basis, which shall be current to within one hundred twenty days;
(j)
The current operating budget of the association;
(k) A
statement of any unsatisfied judgments against the association and the status
of any pending suits in which the association is a defendant;
(l) A
statement describing any insurance coverage provided for the benefit of unit
owners;
(m) A
statement as to whether there are any alterations or improvements to the unit
or to the limited common elements assigned thereto that violate any provision
of the declaration;
(n) A
statement of the number of units, if any, still owned by the declarant, whether
the declarant has transferred control of the association to the unit owners,
and the date of such transfer;
(o) A
statement as to whether there are any violations of the health or building
codes with respect to the unit, the limited common elements assigned thereto,
or any other portion of the condominium;
(p) A
statement of the remaining term of any leasehold estate affecting the
condominium and the provisions governing any extension or renewal thereof; and
(q) A
copy of the declaration, the bylaws, the rules or regulations of the
association, and any other information reasonably requested by mortgagees
of prospective purchasers of units. Information requested generally by (([the]))
the federal national mortgage association, (([the])) the
federal home loan bank board, (([the])) the government national
mortgage association, the veterans administration and the department of housing
and urban development shall be deemed reasonable, provided such information is
reasonably available to the association.
(2)
The association, within ten days after a request by a unit owner, and
subject to payment of any fee imposed pursuant to RCW 64.34.304(1)(1),
shall furnish a resale certificate signed by an officer or authorized
agent of the association and containing the information necessary to enable
the unit owner to comply with this section. For the purposes of this
chapter, a reasonable charge for the preparation of a resale certificate may
not exceed one hundred fifty dollars. The association may charge a unit owner
a nominal fee for updating a resale certificate within six months of the unit
owner's request. The unit owner shall also sign the certificate but the
unit owner is not liable to the purchaser for any erroneous information
provided by the association and included in the certificate unless and to the
extent the unit owner had actual knowledge thereof.
(3) A
purchaser is not liable for any unpaid assessment or fee against the unit as of
the date of the certificate greater than the amount set forth in the
certificate prepared by the association unless and to the extent such purchaser
had actual knowledge thereof. A unit owner is not liable to a purchaser for
the failure or delay of the association to provide the certificate in a timely
manner, but the purchaser's contract is voidable by the purchaser until the
certificate has been provided and for five days thereafter or until conveyance,
whichever occurs first.
Sec.
24. RCW
64.34.430 and 1989 c 43 s 4-108 are each amended to read as follows:
Any
deposit made in connection with the purchase or reservation of a unit from a
person required to deliver a public offering statement pursuant to RCW
64.34.405(3) shall be placed in escrow and held ((either)) in this state
((or in the state where the unit is located)) in an escrow or trust
account designated solely for that purpose by a licensed title insurance
company, an attorney, a real estate broker, an independent bonded escrow
company, or an institution whose accounts are insured by a governmental agency
or instrumentality until: (1) Delivered to the declarant at closing; (2)
delivered to the declarant because of purchaser's default under a contract to
purchase the unit; (3) refunded to the purchaser; or (4) delivered to a court
in connection with the filing of an interpleader action.
Sec.
25. RCW
64.34.440 and 1990 c 166 s 13 are each amended to read as follows:
(1) A
declarant of a conversion condominium, and any dealer who intends to offer
units in such a condominium, shall give each of the residential tenants and any
residential subtenant in possession of a portion of a conversion condominium
notice of the conversion and provide those persons with the public offering
statement no later than ninety days before the tenants and any subtenant in
possession are required to vacate. The notice must set forth generally the
rights of tenants and subtenants under this section and shall be delivered
pursuant to notice requirements set forth in RCW 59.12.040. No tenant or
subtenant may be required to vacate upon less than ninety days' notice, except
by reason of nonpayment of rent, waste, conduct that disturbs other tenants'
peaceful enjoyment of the premises, or act of unlawful detainer as defined in
RCW 59.12.030, and the terms of the tenancy may not be altered during that
period. Nothing in this subsection shall be deemed to waive or repeal RCW
59.18.200(2). Failure to give notice as required by this section is a defense
to an action for possession.
(2)
For sixty days after delivery or mailing of the notice described in subsection
(1) of this section, the person required to give the notice shall offer to
convey each unit or proposed unit occupied for residential use to the tenant
who leases that unit. If a tenant fails to purchase the unit during that
sixty-day period, the offeror may ((not)) offer to dispose of an
interest in that unit during the following one hundred eighty days at a price
or on terms more favorable to the offeree than the price or terms offered to
the tenant only if: (a) Such offeror, by written notice mailed to the
tenant's last known address, offers to sell an interest in that unit at the
more favorable price and terms, and (b) such tenant fails to accept such offer
in writing within ten days following the mailing of the offer to the tenant.
This subsection does not apply to any unit in a conversion condominium if that
unit will be restricted exclusively to nonresidential use or the boundaries of
the converted unit do not substantially conform to the dimensions of the residential
unit before conversion.
(3) If
a seller, in violation of subsection (2) of this section, conveys a unit to a
purchaser for value who has no knowledge of the violation, recording of the
deed conveying the unit extinguishes any right a tenant may have to purchase
that unit but does not affect the right of a tenant to recover damages from the
seller for a violation of subsection (2) of this section.
(4) If
a notice of conversion specifies a date by which a unit or proposed unit must
be vacated and otherwise complies with the provisions of this chapter and
chapter 59.18 RCW, the notice also constitutes a notice to vacate specified by
that statute.
(5)
Nothing in this section permits termination of a lease by a declarant in
violation of its terms.
(6)
Notwithstanding RCW 64.34.050(1), a city or county may by appropriate ordinance
require with respect to any conversion condominium within the jurisdiction of
such city or county that:
(a) In
addition to the statement required by RCW 64.34.415(1)(a), the public offering
statement shall contain a copy of the written inspection report prepared by the
appropriate department of such city or county, which report shall list any
violations of the housing code or other governmental regulation, which code or regulation
is applicable regardless of whether the real property is owned as a condominium
or in some other form of ownership; said inspection shall be made within
forty-five days of the declarant's written request therefor and said report
shall be issued within fourteen days of said inspection being made. Such
inspection may not be required with respect to any building for which a final
certificate of occupancy has been issued by the city or county within the
preceding twenty-four months; and any fee imposed for the making of such
inspection may not exceed the fee that would be imposed for the making of such
an inspection for a purpose other than complying with this subsection (6)(a);
(b)
Prior to the conveyance of any residential unit within a conversion condominium,
other than a conveyance to a declarant or affiliate of a declarant: (i) All
violations disclosed in the inspection report provided for in (a) of this
subsection, and not otherwise waived by such city or county, shall be repaired,
and (ii) a certification shall be obtained from such city or county that such
repairs have been made, which certification shall be based on a reinspection to
be made within seven days of the declarant's written request therefor and which
certification shall be issued within seven days of said reinspection being
made;
(c)
The repairs required to be made under (b) of this subsection shall be warranted
by the declarant against defects due to workmanship or materials for a period
of one year following the completion of such repairs;
(d)
Prior to the conveyance of any residential unit within a conversion
condominium, other than a conveyance to a declarant or affiliate of a
declarant: (i) The declarant shall establish and maintain, during the one-year
warranty period provided under (c) of this subsection, an account containing a
sum equal to ten percent of the actual cost of making the repairs required
under (b) of this subsection; (ii) during the one-year warranty period, the
funds in such account shall be used exclusively for paying the actual cost of
making repairs required, or for otherwise satisfying claims made, under such
warranty; (iii) following the expiration of the one-year warranty period, any
funds remaining in such account shall be immediately disbursed to the declarant;
and (iv) the declarant shall notify in writing the association and such city or
county as to the location of such account and any disbursements therefrom; and
(e)
Relocation assistance not to exceed five hundred dollars per unit shall be paid
to tenants and subtenants who elect not to purchase a unit and who are in
lawful occupancy for residential purposes of a unit and whose monthly household
income from all sources, on the date of the notice described in subsection (1)
of this section, was less than an amount equal to eighty percent of (i) the
monthly median income for comparably sized households in the standard
metropolitan statistical area, as defined and established by the United States
department of housing and urban development, in which the condominium is
located, or (ii) if the condominium is not within a standard metropolitan
statistical area, the monthly median income for comparably sized households in
the state of Washington, as defined and determined by said department. The
household size of a unit shall be based on the number of persons actually in
lawful occupancy of the unit. The tenant or subtenant actually in lawful
occupancy of the unit shall be entitled to the relocation assistance.
Relocation assistance shall be paid on or before the date the tenant or
subtenant vacates and shall be in addition to any damage deposit or other
compensation or refund to which the tenant is otherwise entitled. Unpaid rent
or other amounts owed by the tenant or subtenant to the landlord may be offset
against the relocation assistance.
(7)
Violations of any city or county ordinance adopted as authorized by subsection
(6) of this section shall give rise to such remedies, penalties, and causes of
action which may be lawfully imposed by such city or county. Such violations
shall not invalidate the creation of the condominium or the conveyance of any
interest therein.
Sec.
26. RCW
64.34.445 and 1989 c 43 s 4-112 are each amended to read as follows:
(1) A
declarant and any dealer warrants that a unit will be in at least as good
condition at the earlier of the time of the conveyance or delivery of
possession as it was at the time of contracting, reasonable wear and tear and
damage by casualty or condemnation excepted.
(2) A
declarant and any dealer impliedly warrants that a unit and the common elements
in the condominium are suitable for the ordinary uses of real estate of its
type and that any improvements made or contracted for by ((the person, or made
by any person before the creation of the condominium,)) such declarant
or dealer will be:
(a)
Free from defective materials; and
(b)
Constructed in accordance with ((applicable law, according to)) sound
engineering and construction standards, and in a workmanlike manner in
compliance with all laws then applicable to such improvements.
(3)
A declarant and any dealer warrants to a purchaser of a unit that may be used
for residential use that an existing use, continuation of which is contemplated
by the parties, does not violate applicable law at the earlier of the time of
conveyance or delivery of possession.
(4)
Warranties imposed by this section may be excluded or modified as specified in
RCW 64.34.450.
(5)
For purposes of this section, improvements made or contracted for by an
affiliate of a declarant, as defined in RCW 64.34.020(1), are made or
contracted for by the declarant.
(6)
Any conveyance of a unit transfers to the purchaser all of the declarant's
implied warranties of quality.
Sec.
27. RCW
58.17.040 and 1989 c 43 s 4-123 are each amended to read as follows:
The
provisions of this chapter shall not apply to:
(1)
Cemeteries and other burial plots while used for that purpose;
(2)
Divisions of land into lots or tracts each of which is one-one hundred
twenty-eighth of a section of land or larger, or five acres or larger if the
land is not capable of description as a fraction of a section of land, unless
the governing authority of the city, town, or county in which the land is
situated shall have adopted a subdivision ordinance requiring plat approval of
such divisions: PROVIDED, That for purposes of computing the size of any lot
under this item which borders on a street or road, the lot size shall be expanded
to include that area which would be bounded by the center line of the road or
street and the side lot lines of the lot running perpendicular to such center
line;
(3)
Divisions made by testamentary provisions, or the laws of descent;
(4)
Divisions of land into lots or tracts classified for industrial or commercial
use when the city, town, or county has approved a binding site plan for the use
of the land in accordance with local regulations;
(5)
A division for the purpose of lease when no residential structure other than
mobile homes or travel trailers are permitted to be placed upon the land when
the city, town, or county has approved a binding site plan for the use of the
land in accordance with local regulations;
(6)
A division made for the purpose of alteration by adjusting boundary lines,
between platted or unplatted lots or both, which does not create any additional
lot, tract, parcel, site, or division nor create any lot, tract, parcel, site,
or division which contains insufficient area and dimension to meet minimum
requirements for width and area for a building site; and
(7)
Divisions of land into lots or tracts if: (a) Such division is the result of
subjecting a portion of a parcel or tract of land to either chapter 64.32 or
64.34 RCW subsequent to the recording of a binding site plan for all such land;
(b) the improvements constructed or to be constructed thereon ((will))
are required by the provisions of the binding site plan to be included
in one or more condominiums or owned by an association or other legal entity in
which the owners of units therein or their owners' associations have a
membership or other legal or beneficial interest; (((b))) (c) a
city, town, or county has approved ((a)) the binding site plan
for all such land; ((and (c))) (d) such approved binding site plan is
recorded in the county or counties in which such land is located; and (e)
the binding site plan contains thereon the following statement: "All
development and use of the land described herein shall be in accordance
with ((the)) this binding site plan, as it may be amended with
the approval of the city, town, or county having jurisdiction over the
development of such land, and in accordance with such other governmental
permits, approvals, regulations, requirements, and restrictions that may be
imposed upon such land and the development and use thereof. Upon
completion, the improvements on the land shall be included in one or more
condominiums or owned by an association or other legal entity in which the
owners of units therein or their owners' associations have a membership or
other legal or beneficial interest.((")) This binding site plan
shall be binding upon all now or hereafter having any interest in the land
described herein." The binding site plan may, but need not, depict or
describe the boundaries of the lots or tracts resulting from subjecting a
portion of the land to either chapter 64.32 or 64.34 RCW. A site plan shall be
deemed to have been approved if the site plan was approved by a city, town, or
county: (i) In connection with the final approval of a subdivision plat or
planned unit development with respect to all of such land; or (ii) in
connection with the issuance of building permits or final certificates of
occupancy with respect to all of such land; or (iii) if not approved pursuant
to (i) and (ii) of this subsection (7)(e), then pursuant to such other
procedures as such city, town, or county may have established for the approval
of a binding site plan.(("))
