S-0606.1  _______________________________________________

                         SENATE BILL 5741

          _______________________________________________

State of Washington      55th Legislature     1997 Regular Session

By Senators Wood and Winsley

Read first time 02/10/97.  Referred to Committee on Financial Institutions, Insurance & Housing.

Requiring a statement of permitted uses and use restrictions for condominiums.

    AN ACT Relating to public offering statements for condominiums; and amending RCW 64.34.410, 64.34.443, and 64.34.232.

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

    Sec. 1.  RCW 64.34.410 and 1992 c 220 s 21 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) A brief description of the permitted uses and use restrictions pertaining to the units and common elements remaining unsold at the time the interest is being offered for sale, and pertaining to the rights reserved in the units and common elements by the declarant;

(i) The number of existing units in the condominium and the maximum number of units that may be added to the condominium;

    (((i))) (j) 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))) (k) A list of the limited common elements assigned to the units being offered for sale;

    (((k))) (l) 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))) (m) 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))) (n) The status of construction of the units and common elements, including estimated dates of completion if not completed;

    (((n))) (o) The estimated current common expense liability for the units being offered;

    (((o))) (p) An estimate of any payment with respect to the common expense liability for the units being offered which will be due at closing;

    (((p))) (q) 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))) (r) 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))) (s) The identification of any parts of the condominium, other than the units, which any individual owner will have the responsibility for maintaining;

    (((s))) (t) If the condominium involves a conversion condominium, the information required by RCW 64.34.415;

    (((t))) (u) Whether timesharing is restricted or prohibited, and if restricted, a general description of such restrictions;

    (((u))) (v) 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))) (w) A description of any material differences in terms of furnishings, fixtures, finishes, and equipment between any model unit available to the purchaser at the time the agreement for sale is executed and the unit being offered;

    (((w))) (x) Any liens on real property to be conveyed to the association required to be disclosed pursuant to RCW 64.34.435(2)(b);

    (((x))) (y) 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))) (z) A brief description of any construction warranties to be provided to the purchaser;

    (((z))) (aa) Any building code violation citations received by the declarant in connection with the condominium which have not been corrected;

    (((aa))) (bb) 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))) (cc) Any rights of first refusal to lease or purchase any unit or any of the common elements;

    (((cc))) (dd) The extent to which the insurance provided by the association covers furnishings, fixtures, and equipment located in the unit;

    (((dd))) (ee) 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))) (ff) 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))) (gg) A list of the documents which the prospective purchaser is entitled to receive from the declarant before the rescission period commences;

    (((gg))) (hh) 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;

    (((hh))) (ii) 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

    (((ii))) (jj) 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))) (k), (((r))) (s), (((t))) (u), (((u))) (v), and (((bb))) (cc) 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))) (ee), (((gg))) (hh), and (((hh))) (ii) 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. 2.  RCW 64.34.443 and 1989 c 428 s 2 are each amended to read as follows:

    (1) Express warranties made by any seller to a purchaser of a unit, if relied upon by the purchaser, are created as follows:

    (a) Any written affirmation of fact or promise which relates to the unit, its use, or rights appurtenant thereto, area improvements to the condominium that would directly benefit the unit, or the right to use or have the benefit of facilities not located in the condominium creates an express warranty that the unit and related rights and uses will conform to the affirmation or promise;

    (b) Any model or written description of the physical characteristics of the condominium at the time the purchase agreement is executed, including plans and specifications of or for improvements, creates an express warranty that the condominium will conform to the model or description except pursuant to RCW 64.34.410(1)(v);

    (c) Any written description of the quantity or extent of the real property comprising the condominium, including plats or surveys, creates an express warranty that the condominium will conform to the description, subject to customary tolerances; and

    (d) A written provision that a buyer may put a unit only to a specified use is an express warranty that the specified use is lawful.

    (2) Neither formal words, such as "warranty" or "guarantee," nor a specific intention to make a warranty are necessary to create an express warranty of quality, but a statement purporting to be merely an opinion or commendation of the real estate or its value does not create a warranty.  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 declarant's agent identified in the public offering statement.  This section may not be construed to limit a declarant's liability for misrepresentations contained in, or omissions from, the public offering statement required under RCW 64.34.405(1).

    (3) Any conveyance of a unit transfers to the purchaser all express warranties of quality made by previous sellers.

    Sec. 3.  RCW 64.34.232 and 1992 c 220 s 10 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 "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)) under 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)) under 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)) under RCW 64.34.410(1)(((i))) (j) 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.

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