State Law Governing Common Interest Communities.
A common interest community (CIC) is a form of real estate in which each unit owner or homeowner has an exclusive interest in a unit or lot and a shared or undivided interest in common area property. In Washington, several statutes govern residential CICs, such as condominiums, cooperatives, leasehold CICs, miscellaneous communities, and plat communities.
The Washington Uniform Common Interest Ownership Act (WUCIOA) took effect July 1, 2018, and is applicable to CICs created on or after that date. A CIC created prior to the effective date of the WUCIOA may choose to opt into the WUCIOA.
Older CICs that have not opted into the WUCIOA are regulated by different statutes depending on their ownership structure and the date they were created:
Provisions of the WCA and the WUCIOA are controlling if there is a conflict with similar provisions contained in the Washington Business Corporations Act, Washington Nonprofit Corporations Act, Nonprofit Miscellaneous and Mutual Corporations Act, or laws related to limited liability companies and cooperative associations.
Certain WUCIOA provisions apply to CICs that are currently subject to the older statutes, including those related to powers and duties of an association of unit owners, budget ratification, special assessments, and reserve study. In 2024 the Legislature enacted Senate Bill 5796, which repeals the older CIC statutes and applies the WUCIOA to all CICs regardless of their creation date, effective January 1, 2028.
Washington Uniform Common Interest Ownership Act.
Under the WUCIOA, a CIC is administered by a unit owners' or homeowners' association, which is an organization consisting of property owners within the CIC. An association derives its authority from several documents, including the declaration of covenants, conditions, and restrictions, and the association's bylaws and articles of incorporation.
The primary functions of an association include: managing and maintaining common areas, such as parks, roads, and community centers; adopting budgets; imposing and collecting assessments for common expenses; and enforcing restrictive covenants that govern the community. In addition, an association may adopt rules and regulations concerning property use in the community and impose fines for violations of those rules.
The WUCIOA contains numerous provisions regarding the management of a CIC, including requirements related to meetings, voting by unit owners, reserve accounts, resale certificates, and limitations on the rules an association may adopt regarding electric vehicle charging stations and heat pumps. Many WUCIOA provisions do not apply to certain plat or miscellaneous CICs with no more than 12 units and an average annual assessment of no more than $300 per residential unit.
Meetings of Unit Owners, Board Meetings, and Meeting Notices.
An association must provide notice of annual and special meetings of unit owners. The notice must state the time, date, and place of the meeting, and items on the agenda, including:
Notice of each board meeting must be provided to each board member and to all unit owners at least 14 days before the meeting. At each board meeting, the board must provide a reasonable opportunity for unit owners to comment regarding matters affecting the CIC and the association.
Unless the organizational documents require otherwise, a unit owners' meeting is not required to be held at a physical location if the meeting is conducted by a means of communication that enables owner participation from different locations in real time as if the owners are physically present in the same location, and that provides an option for owners to communicate by telephone.
Unless organizational documents provide otherwise, the board may meet by participation of all board members by telephone, video, or other conferencing process if the meeting notice states the process to be used and provides information on how to participate, and the process provides opportunities for all participants to hear or perceive the discussion and comment.
Voting by Unit Owners.
Whenever proposals or the election of board members is to be voted upon at a meeting, a unit owner may vote by absentee ballot if the ballot is provided by the association and the name of each candidate, as well as the text of each proposal, is set forth in writing accompanying or contained in the meeting notice.
Notwithstanding any other law or provision of the governing documents, votes of unit owners must be conducted by secret ballot when the vote concerns election of board members, removal of board members or officers, amendments to the declaration or governing documents, or unit owner approval of an amendment to the declaration for the reallocation of a common element as a limited common element.
Reserve Accounts.
With some exceptions, an association must prepare and annually update a reserve study that lists and evaluates the remaining useful life of any reserve components, which are physical components of the CIC that the association is obligated to maintain or replace and for which the cost of maintenance or repair is impractical to include in an annual budget. A reserve study must also include the association's reserve account balance, and a statement of the amount of any current deficit or surplus in reserve funding.
An association must establish one or more accounts for the deposit of funds for the replacement costs of reserve components. Any reserve account must be an income-earning account maintained under the direct control of the board, and the board is responsible for administering the reserve account.
Resale Certificates.
Prior to execution of any contract for sale of a unit, the unit owner must furnish to a purchaser a resale certificate signed by an officer or authorized agent of the association. The resale certificate must contain specified information regarding the unit and the CIC, including: current operating budget of the association; a statement of the monthly assessments; any unpaid common expenses or special assessments currently due and payable from the selling unit owner; any anticipated repair or replacement costs approved by the association; and a statement as to whether there are any alterations or improvements to the unit or to the limited common elements assigned to the unit, or any violations of the health or building codes with respect to the unit.
A unit owner is not liable to a buyer for the failure or delay of the association to provide the resale certificate in a timely manner, but the buyer may void the purchase contract up until five days after the resale certificate is provided, or up until the property is conveyed to the buyer, whichever occurs first.
Electric Vehicle Charging Stations and Heat Pumps.
An association may not adopt or enforce any rule or restriction that effectively prohibits or unreasonably restricts the installation or use of an electric vehicle charging station (EVCS) within the boundaries of a unit or in a designated parking space, or a heat pump within the boundaries of a unit. An association may impose reasonable restrictions on EVCS installations and heat pumps.
An association may require a unit owner to submit an application for approval prior to the installation of an EVCS. A heat pump may be installed on or in a common element only with the approval of the board.
A unit owner must disclose to any prospective buyers of the unit the existence of the EVCS and the related responsibilities of the unit owner. A unit owner and successive owners are responsible for the costs of installation, maintenance, repair, or replacement of an EVCS or a heat pump.
Nonjudicial Foreclosure Requirements Involving Successors in Interest.
Unlike a mortgage, which requires judicial foreclosure, a deed of trust may be nonjudicially foreclosed. The Deeds of Trust Act establishes detailed notice and process requirements for nonjudicial foreclosure and imposes certain preforeclosure requirements on beneficiaries and trustees.
One of the preforeclosure requirements addresses the circumstances when someone claims to be a successor in interest to the borrower's property rights, but who is not a party to the loan, promissory note, or other obligation secured by the deed of trust. In such circumstances, a trustee is prohibited from recording a notice of sale until the trustee or mortgage servicer completes specified requirements, some of which do not apply to beneficiaries subject to the HPRA, the WCA and the HOAA beneficiaries.
State Law Governing Common Interest Communities.
Effective January 1, 2026, WUCIOA provisions related to meetings, board response and powers during a government declaration of emergency, the method of accepting payment of assessments, siting of electric vehicle charging stations, and approval of heat pumps are made applicable to the HPRA, the WCA, and the HOAA.
It is specified that provisions of the HPRA and the HOAA are controlling if there is a conflict over similar provisions contained in the Washington Business Corporations Act, Washington Nonprofit Corporations Act, Nonprofit Miscellaneous and Mutual Corporations Act, or laws related to limited liability companies and cooperative associations.
Washington Uniform Common Interest Ownership Act.
The list of WUCIOA provisions applicable to certain plat or miscellaneous communities is expanded and applies to a larger number of communities. Specifically, the expanded list of WUCIOA provisions applies if the community contains no more than 50 units, previously 12 units, and its average annual assessment does not exceed $1,000, previously $300.
Various revisions are made to WUCIOA provisions related to meetings, voting by unit owners, reserve accounts, resale certificates, and electric vehicle charging stations and heat pumps.
Meetings of Unit Owners, Board Meetings, and Meeting Notices.
The requirement that a notice of a unit owners' meeting must include any changes to the previously approved budget that result in a change in the assessment obligation is removed.
Notice of a board meeting must be given to unit owners by means of electronic communication at least seven days before the meeting if the meeting addresses an unforeseen event or condition and it is impracticable to provide notice as otherwise required by the WUCIOA.
At each board meeting, the board must provide at least 15 minutes at the beginning of the meeting for unit owners to comment about agenda items before the board votes. The board may place reasonable time restrictions of not less than 90 seconds per owner per unit, except that the time may be reduced and allocated equally if more than 10 unit owners wish to comment.
Provisions that relate to remote unit owners and board meetings and allow the organizational documents to vary the procedures for remote meetings are removed. Instead, notwithstanding the governing documents, any meeting may be held by telephonic, video, or other conferencing process if:
Voting by Unit Owners.
Any ballot provided by the association for election of board members by the unit owners must designate a blank space for unit owners to cast a vote for one or more candidates.
The requirement to conduct votes of unit owners by secret ballot for approval of an amendment to the declaration for reallocation of a common element as a limited common element is removed.
The association is required to open and count secret ballots physically received, or review, announce, and record the results of ballots received by electronic means in meeting minutes. A quorum is not required to be present when the secret ballots physically received are counted or the results of the secret ballots electronically received are reviewed.
The incumbent members of the board and each person named on the ballot may not possess, be given access to, or participate in the opening or counting of the secret ballots.
Reserve Accounts.
The requirement that a reserve account must be an income-earning account controlled by the board is removed. Instead, reserve funds must be:
The board may hold reserve funds in cash or invested in money market funds. If certain conditions are met, reserve funds may also be held in certificates of deposit or United States treasury bills, notes, or bonds.
The board may invest reserve funds in securities when the total value of reserve funds is greater than $250,000 and if new investments would not reduce below 50 percent the reserve funds held in interest-bearing accounts. The owners of the units to which at least 75 percent of the votes in the association are allocated may vote to invest up to 100 percent of any available reserve funds. Investments in securities must be approved as part of the budget ratification process and administered by a qualified third-party fiduciary or by the board in consultation with an independent, qualified investment advisor.
Reserve accounts must be maintained so that reserve funds are not commingled with other funds of the association. Except for investments and transfers between separate reserve accounts held by the same association, every disbursement of reserve funds requires the signature of at least two people who are officers or directors of the association, as well as documentation of the expenses with supporting invoices.
Resale Certificates.
A buyer of a unit may waive receipt of a resale certificate if the resale certificate is unavailable. A resale certificate is unavailable if the seller:
The provisions regarding when a buyer may cancel a contract for purchase of a unit are revised and allow a buyer to cancel a purchase contract within five days after first receiving the resale certificate.
If the resale certificate is first provided to a buyer more than five days before execution of the purchase contract, the buyer does not have the right to cancel the executed contract.
If the resale certificate is first provided to a buyer five days or less before the purchase contract is signed, the buyer may cancel the contract before the property is conveyed to the buyer by delivering a cancellation notice to the seller. The cancellation notice must be delivered to the seller no later than the fifth day after the buyer first received the certificate.
If the resale certificate is first provided to a buyer less than five days before the closing date for the conveyance of the unit, the buyer may extend the closing date by up to five days after receipt of the resale certificate.
Electric Vehicle Charging Stations and Heat Pumps.
The association may not require approval of the installation of an EVCS in an association of single-family homes, site condominiums, or a planned use development where the units are not immediately adjacent unless the EVCS is installed within a common element or is connected to a common electrical power supply. A unit owner is not required to disclose the existence of an EVCS to any prospective buyers of the unit if the installation of the EVCS is not subject to the association approval requirement.
The board may not unreasonably withhold the board's approval of a heat pump installation on or in a common element.
In addition to other costs, a unit owner and each successive owner of an EVCS or a heat pump exclusively serving the owner's unit is responsible for inspection costs.
Miscellaneous Revisions.
The WUCIOA definition of "common expense" is broadened to include expenditures made by an association, financial liabilities of the association, and any allocations to reserves, instead of only those expenses that are allocated to all unit owners in accordance with common expense liability, with the effect that specially allocated expenses are included in the definition of "common expense." The related definition of "specially allocated expense" is modified to include any common expense (rather than any expense) allocated on the basis other than the common expense liability.
The association is required to provide at least one method of accepting payment of assessments from unit owners at no charge or as a common expense.
Nonjudicial Preforeclosure Requirements Involving Successors in Interest.
The preforeclosure requirements that involve successors in interest and from which beneficiaries subject to the HPRA, the WCA, and the HOAA are exempt additionally do not apply to beneficiaries subject to the WUCIOA.
(In support) A bill enacted last year expanded the Washington Uniform Common Interest Ownership Act (WUCIOA) to all legacy communities that are currently governed by three older statutes. During that process, some concerns about the transition came up from various stakeholders, and this bill addresses some of those concerns. While the transition may be a bit bumpy, in a few years it will be better for homeowners to have a single statutory scheme that everyone understands.
The bill contains an agreed-upon definition of small communities that are exempt from large sections of the WUCIOA, and this reflects the unique needs of some of the smaller homeowners' associations.
Another significant issue that came up in last year's bill was the availability of resale certificates, which are used when a home in a common interest community is sold. This bill represents a compromise as to the circumstances under which a buyer could give up the right to a resale certificate. Those are largely situations where the association is just not responsive, and the lack of a resale certificate is going to prevent a sale. All the stakeholders involved in the discussions of this bill are comfortable with this compromise.
This bill helps make sure that all communities have open meetings and get to hear from their homeowners before they discuss the items on their agenda and make decisions. Homeowner advocates proposed a lengthy list of other changes to the various statutes to provide more consumer protection or more flexibility for homeowners, like the ability for large associations to invest reserve accounts differently. The bill contains only the changes that all the stakeholders could agree on, and it does a lot of positive things.
(Opposed) The stakeholder discussions on this bill did not include anyone who actually lives in a homeowners' association or is a board member, and it is important to have that perspective. Minnesota had a similar problem, so they formed a task group that included board members, homeowners, and advocates, and they made 41 recommendations, including having an ombudsman for homeowners' associations.
The repeal of the older statutes is not just a slight inconvenience. There is a lot of cost that goes into that, and it will be a nightmare. The homeowners' associations created prior to the WUCIOA should be allowed to remain subject to the older statutes.
A task force within the Attorney's General Office should be established to study and make recommendations about the impact of the WUCIOA. The office of a homeowners' associations ombudsmen should be established within the Attorney's General Office. The Consumer Protection Act should be amended to provide relief when an association of any size or age engages in conduct that violates the law. The statutes should be rewritten in plain language because they are indecipherable to average homeowners and board members, most of whom are unpaid volunteers with no training.
(Other) Current laws concerning common interest communities have made it very difficult for management companies to do their job. A lot of communication with neighborhoods and communities had to happen after the enactment of last year's bill. This bill does several things that take effect on January 1, 2026, and that is just too quick.
When defining a small community, the assets of the community must be considered. There are some communities that do not meet the definition in the bill because they have more than 50 units, but they have no assets.
It is completely appropriate to have four different statutes governing common interest communities because there are four different types of entities involved, and they all need to have their own set of rules.
(In support) Senator Jamie Pedersen, prime sponsor; Steve Horvath, HOA United; Hilary Bublitz, Wa State Community Associations Institute; and Bill Clarke, WA REALTORS.