Washington Legislative Update
In Washington, there were several bills impacting collection of association assessments passed in the recent legislative session and signed by the governor that become effective July 28, 2019.
Bill #SHB 1602 concerning consumer debt applies to the collection of association assessments. This law provides that judgments obtained for unpaid consumer debt (such as association assessments) will accrue interest at 9% per annum. Previously, state law did not include a specific rate for consumer debt, so associations were able to use the interest rate stated in its governing documents to calculate both the pre- and post-judgment interest amounts. Bill #SHB 1602 does not impact the rate of the pre-judgment interest that the Association can assess on delinquent assessments, but this bill sets the post-judgment interest rate at 9% per annum.
Bill #HB 1730 deals with the statute of limitations (i.e. the time period in which a legal claim may be brought). Generally speaking, the statute of limitations to collect Old or New Act Condominium assessments is 3 years and the statute of limitations to collect Homeowner’s Association and WUCIOA community assessments is 6 years. A voluntary payment, no matter if it was made after the statute of limitations expired, restarted calculation of the statute of limitations. Under the provisions of Bill #HB 1730, a payment made after the statute of limitations expires no longer revives or restarts the time period to file the claim.
Washington Superior Court Civil Rule 3 generally allows a plaintiff to serve a defendant with an unfiled summons and complaint. However, Bill #HB 1066 now requires that complaints involving debt collection first be filed with the court prior to service on the defendants. Bill #HB 1066 only impact lawsuits involving debt collection; all other complaints may still be served on the defendant prior to being filed with the court.
If you have any questions regarding these recent changes in Washington law or the impact they have on your association, please do not hesitate to contact us at Barker Martin.