BILL REQ. #:  S-2200.1 

READ FIRST TIME 02/23/07.   

     AN ACT Relating to conversion condominiums; amending RCW 64.34.440; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 64.34.440 and 1992 c 220 s 25 are each amended to read as follows:
     (1)(a) 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)) one hundred twenty days before the tenants and any subtenant in possession are required to vacate. The notice must:
     (i) Set forth generally the rights of tenants and subtenants under this section ((and shall));
     (ii) Be delivered pursuant to notice requirements set forth in RCW 59.12.040; and
     (iii) Expressly state whether there is a county or city relocation assistance requirement for tenants or subtenants of conversion condominiums in the jurisdiction in which the property is located. If the county or city does have a relocation assistance requirement, the following must also be included in the notice:
     (A) The terms and conditions under which relocation assistance is paid; and
     (B) Any information or forms prescribed by the county or city by ordinance or rule related to the relocation assistance requirement.
     (b) No tenant or subtenant may be required to vacate upon less than ((ninety)) one hundred twenty 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 except as provided in (c) of this subsection.
     (c) At the declarant's option, the declarant may provide all tenants in a single building with an option to terminate their lease or rental agreements without cause or consequence after providing the declarant with thirty days' notice. In such case, tenants shall continue to have access to relocation assistance as provided in subsection (6)(e) of this section.
     (d) 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, or failure to pay any required relocation assistance, 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 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) A declarant shall pay relocation assistance ((not to exceed five hundred dollars per unit shall be paid)), in an amount determined by the city or county, which in no event may exceed a total of the sum for three months' rent of the tenant's unit as specified in the applicable lease or rental agreement, to tenants and subtenants:
     (i) Who elect not to purchase a unit ((and));
     (ii) Who are in lawful occupancy for residential purposes of a unit; and
     (iii) Whose ((monthly)) annual 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))):
     (A) The ((monthly)) annual median family 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, as adjusted for household size according to the method used for income limits by the department; or (((ii)))
     (B) If the condominium is not within a ((standard)) metropolitan statistical area, the ((monthly)) annual median family income ((for comparably sized households)) in the state of Washington, as defined and determined by ((said)) the United States department of housing and urban development, and as adjusted for household size according to the method used for income limits by the 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. A requirement for relocation assistance under this subsection (6)(e) is authorized whether or not it may be considered a tax. The declarant shall provide to the city or county a copy of the notice required under subsection (1)(a) of this section at the same time the notice is provided to the tenants or subtenants. The declarant shall also provide other notices and documentation that the city or county may require by ordinance or rule to administer the relocation assistance requirement and verify compliance under this section. 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; and
     (f) Except as authorized under (g) of this subsection (6), a declarant and any dealer shall not begin any construction, remodeling, or repairs to any interior portion of an occupied building that is to be converted to a condominium or the lot on which the conversion condominium is located during the one hundred twenty-day notice period provided for in RCW 64.34.440(1) unless all residential tenants and residential subtenants who have elected not to purchase a unit and who are in lawful occupancy in the building have vacated.
     (g)(i) A declarant and any dealer is authorized to begin construction, remodeling, or repairs to interior portions of an occupied building under the following circumstances:
     (A) To repair or remodel vacant units to be used as model units, provided that the repair and remodel is limited to one model for each unit type in the building;
     (B) To repair or remodel a vacant unit or common area for use as a sales office; and
     (C) The declarant or dealer has offered existing tenants an option to terminate an existing lease or rental agreement without cause or consequence pursuant to subsection (1)(c) of this section and at least one hundred twenty days have passed since tenants were notified of such option.
     (ii) All work performed under this subsection shall not violate the tenant's or subtenant's rights of quiet enjoyment during the one hundred twenty-day notice period.
     (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.

NEW SECTION.  Sec. 2   This act takes effect August 1, 2007. This act shall not apply to any conversion condominiums for which a notice required by RCW 64.34.440(1) has been delivered prior to the effective date of this act.