Condominium Conversions. The Washington condominium act applies to all condominiums created within the state after July 1, 1990, and through June 30, 2018. The Washington Uniform Common Interest Ownership Act (WUCIOA) applies to all common interest communities, including condominiums, created within the state on or after July 1, 2018. Both the Washington condominium act and WUCIOA require a declarant or dealer who intends to offer units in a conversion condominium or conversion building to provide each of the residential tenants and subtenants a conversion notice and the public offering statement no later than 120 days before the tenants and subtenants are required to vacate. The conversion notice must inform the residential tenants and subtenants of their rights and expressly state whether there is a county or city relocation assistance program for residential tenants or subtenants of conversion condominiums or conversion buildings in the jurisdiction in which the property is located. If the county or city does have a relocation assistance program, the notice must also provide a summary of the terms and conditions under which relocation assistance is paid and contact information for the city or county relocation assistance program.
A city or county may, by ordinance, require the payment of relocation assistance in an amount not to exceed a sum equal to three months of the residential tenant's or subtenant's rent at the time the conversion notice is received, to residential tenants or subtenants who:
Relocation assistance must be paid on or before the date the residential tenant or subtenant vacates and is in addition to any damage deposit or other compensation or refund to which the residential tenant or subtenant is otherwise entitled. Unpaid rent or other amounts owed by the residential tenant or subtenant to the landlord may be offset against the relocation assistance.
Housing Finance Commission. The Housing Finance Commission (Commission) is a finance authority established to act as a conduit to make additional funds available at affordable rates to help provide housing throughout the state. The Commission is financially self-supported and does not receive funding from the state. To provide financing, the Commission may:
Affordable Housing Advisory Board. The Washington State Affordable Housing Advisory Board (AHAB) advises the Department of Commerce on housing and housing-related issues. AHAB has 22 members representing a variety of housing interests around the state. Among its duties, AHAB must review, evaluate, and make recommendations regarding existing and proposed housing programs and initiatives including, but not limited to, tax policies, land use policies, and financing programs, as well as provide an annual report detailing its findings and making specific program, legislative, and funding recommendations, and any other recommendations it deems appropriate.
The Commission must implement a condominium conversion tenant-to-homeowner program focused on opportunities for first-time homeownership and to assist tenants in multifamily buildings that are being converted to condominium ownership by providing information and resources relating to homeownership. The Commission must also refer such tenants to its home loan and down payment assistance programs and any applicable homebuyer education seminars available through local partnerships. The Commission may establish income eligibility requirements for tenants and qualifying price thresholds under the program consistent with requirements and thresholds under existing Commission programs.
Any declarant of a conversion condominium, and any dealer who intends to offer units in such a condominium, subject to the requirements of a condominium association created under the Washington condominium act, must provide a conversion notice to the Commission no later than 120 days before the residential tenants or subtenants in possession of a portion of the conversion condominium must vacate. Such a declarant and dealer must also inform residential tenants and subtenants about the resources and information available under the condominium conversion tenant-to-homeowner program within the conversion notice provided to such tenants and subtenants.
Any declarant or dealer who intends to offer units in a conversion building, subject to the requirements of a common interest community created under WUCIOA, must provide a conversion notice to the Commission no later than 120 days before the residential tenants or subtenants in possession of a portion of the conversion building must vacate. Such a declarant or dealer must also inform residential tenants and subtenants about the resources and information available under the condominium conversion tenant-to-homeowner program within the conversion notice provided to such tenants and subtenants.
AHAB must review issues associated with the conversion of multifamily buildings to condominium ownership and include:
When conducting its review, AHAB must seek input from stakeholders with expertise in both the condominium conversion process and providing tenant relocation programs and assistance, and provide a report on its review to the Legislature by December 1, 2022.
The membership of AHAB is expanded to include one representative from a condominium association or community interest community association.
The committee recommended a different version of the bill than what was heard. PRO: We have a severe shortage of affordable housing while housing prices have soared, forcing some households to give up the dream of homeownership. The bill addresses hurdles for entry into homeownership. Condominiums can be affordable and attainable. Real estate practitioners do not have the condominium product to sell to first-time home buyers. Condominium ownership is now a sign of wealth and more common in luxury high rises. Condominium conversions can provide more affordable homeownership stock while not displacing tenants. A right of first refusal should be provided to tenants in converted multifamily buildings. Condominiums can provide protections like owner occupancy requirements and rental caps to make them more affordable.
CON: There is a lack of protections for renters transitioning to condominium ownership. Conversions remove much needed rental housing stock. The bill fails to address mandatory unit inspections or sale disclosures to certain buyers. Membership in condominium associations could negatively impact the lives of new owners by limiting freedom of speech and other constitutional rights. Government should offer more protections with condominium conversions and a potential risk of foreclosure. Condominium associations may subject owners to share high litigation costs. Most new homeowners are not aware of or understand homeowners' association laws. The Commission should include condominium research and stakeholders in new program.
OTHER: The Commission has not met with the prime sponsor to ask a few questions and explore providing more homeownership opportunities when buildings are being converted to condominiums.